# Question Yes No
Business Performance
1
Is Sales Revenue "falling off?" Is Actual lower than Budget, lower than Prior Year? Is this happening despite increased expenditures on Marketing and Sales?
2
Does your Customer Service data indicate a growing number of problems or an increased "dissatisfaction" level?
3
Are you having a tough (or tougher) time collecting your Receivables? Are customers "stretching out" their payments to you? Do some simply "not pay"?
4
Does your Quality Metric data indicate a considerable opportunity to improve?
5
Are Product Margins "getting squeezed?" Are Margin Rates lower than Budget, lower than Prior Year? Do you know whether the cause is: + Lower Selling Prices, or + Higher Costs, or + A worsening Product Mix, or + A combination of the above
6
Are Operating Expenses up sharply over Prior Periods, over Budget? Do you know why, what RESULTS you are getting for the increased expenditures?
7
Despite what the Budget says or what Prior Year was, is the business Profitable or losing money?
8
Are Inventories growing, particularly more so than Sales Revenue? Do you struggle to understand why or what's in the Inventories? Is a lot of the Inventory Aged or Obsolete?
9
Is Cash always "tight," with the business "living hand to mouth?" Are your suppliers constantly calling, demanding payment? Are you on C.O.D. or "payment in advance" status with some suppliers?
10
Is Employee Turnover a continuing issue? Are you constantly (re)hiring and (re)training? Is employee morale "less than high?"
11
Regardless of "what or where," do "unexpected bad things" keep happening in the business? Is "surprise" unfortunately all too commonplace?
Business Practices
1
Does a detailed monthly Financial Plan, a Budget, including Revenue, Cost of Sales, Gross Margin, Operating Expense, Profit and Cash Flow exist? Was it formulated from the "bottom up?" Are any Key Assumptions clearly documented? Do Key Personnel know, understand and "own" the Plan?
2
Does an effective Cash Management Mechanism exist? Does it illustrate the details of expected inflows and outflows, looking forward, for a number of weeks? Is it refreshed frequently, kept current?
3
Does a Monthly Forecast process exist, incorporating current, up to date Assumptions? As you go through the month, do you have a clear understanding as to where the business stands versus the Forecast?
4
Does a screen of Key Metrics exist? Do the Metrics accurately report important aspects such as Volume, Liquidity, Costs, Quality, Delivery, Customer Service? Are they updated and reported at least weekly?
5
Does an effective "Management Process" exist? Does a "Whole Brain" Management Team meet at least weekly? Is the agenda based on a review of Key Metrics and Financial Results? Does the process adequately answer: + How are we doing? + What's important? Where should we focus? + Where is Corrective Action needed
6
Is a comprehensive Monthly Financial Results Package published, within one week of the end of the month? At a minimum, does the package include: + P&L, Current Month and Year to Date, compared to Forecast, Budget and Prior Year Actual+ Balance Sheet, compared to Prior Period Actuals + Cash Flow, Current Month and Year to Date, versus Prior Year Actual + Details of Revenue, Margins, Operating Expenses and Headcount + (If applicable) Inventory Composition and Turnover + (If applicable) Receivables and Payables Agings + and, MOST IMPORTANTLY, crisp, clear Analytical Commentary, highlighting issues and opportunities.
7
Is there clear understanding and alignment across the Management Team on "The Plan," the Key Initiatives, each member's Role and Key Responsibilities, and expected Key Results?
8
Do effective Human Resource programs exist? Do all Employees have accurate and up to date Job Descriptions that clearly describe Key Responsibilities and Expected Results? Is an effective Employee Appraisal/Evaluation process in place, one that provides Employees with timely, meaningful feedback? Is the Organization Structure documented and clearly understood by all? Do Compensation programs exist which motivate and reward positive contribution and added value?
