Here are four assessment methods to help evaluate the health of your business.
As your business grows and evolves, so does its goals and needs. With the year coming to a close, a business audit is a great way to analyze the health of your business and target where there may be room for improvement.
Michael Mirau, founder and CEO of ProActive Leadership Group, breaks down four assessment methods to help evaluate your business.
SWOT: Strengths, Weaknesses, Opportunities, and Threats
This method continues to be the industry standard because it is easy for business owners to understand. Simply put, a SWOT analysis breaks down a business’ strengths, weaknesses, opportunities, and threats. However, this method is not ideal for analyzing trends, such as changing consumer behaviors or business behaviors technology, says Mirau.
SOAR: Strengths, Opportunities, Aspirations, and Results
This analysis, Mirau says, takes a more positive, aspirational approach to examining the state of one’s business. The SOAR method—which outlines strengths, opportunities, aspirations, and results—not only pushes companies to think through the results they’re seeking, but also “drives those creative juices” that business owners need to spot new ways of doing things, he says. However, it doesn’t take into account threats that could harm a company’s wellbeing—or as Mirau calls them, “snakes in the grass.”
“You’ve got to be realistic about the things that can jump up and bite you and totally disable your ability to accomplish what you want,” Mirau says.
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SCORE: Strengths, Challenges, Options, Responses, and Effectiveness
Similar to SOAR, this method also allows business owners to measure whether they’re achieving the results that they want. Through examining possible responses, SCORE also identifies areas where companies can take action to address one’s strengths, challenges, and opportunities, he adds.
Unlike the previous two forms of analysis, a SCORE analysis considers customer feedback, which Mirau says business owners need to take into account.
NOISE: Needs, Opportunities, Improvements, Strengths, and Exceptions
While Mirau admits that this isn’t a widely adopted business analysis technique, NOISE is a good business exercise for assessing a company’s marketing goals, understanding customers’ needs, and finding opportunities to serve them, Mirau says.
Like a SWOT analysis, NOISE is a straightforward form of analysis. It begins with one thing: needs. By identifying the needs of your business, or what you don’t have at the moment, you are able to identify opportunities and ways to improve your business.
Meanwhile, strengths and exceptions allow you to look at your business in terms of what is already working, rather than what isn’t.
Which Method Is Best for Your Business?
To identify which method is best for your needs, start by outlining your goals and asking what you need or want to discover for your business. That will dictate the methodology you’re using, says Mirau.
Regardless of what method you choose, Mirau advises small businesses to check on the overall health of their business every 90 days and examine their finances on a monthly basis. Doing so allows small business owners to determine how much progress they’ve made toward their goals and work through hiccups such as losing a key employee or dealing with supplier difficulties.
“You plan every year what you want to get accomplished, but you can’t wait a year to make adjustments or changes,” Mirau says.
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