What Are Business Wellness Checkups?

business wellness check

Businesses are like human bodies — they need regular checkups so that their owners will know exactly whether they’re performing well or not.

Employers can get caught up in the daily demands of marketing their products and services, ramping up sales, establishing good customer relationship, and ensuring employee engagement that they forget to step back and see how their resources are being managed and if they are financially sustainable.

In fact, several startups were short-lived because an aspect of their financial health was ignored or overlooked. 

An analysis of a survey conducted among business founders by market intelligence firm CB Insights revealed that the top reason (42%) why startups fail was because the market had no need for their products or services. Meanwhile, they found that 29% failed because they ran out of cash.

The poll uncovered other causes of business failures:

  • 23% folded up because the organization didn’t have the right team to run the business
  • 19% lost to competition
  • 17% failed due to the lack of a business model or poor product offering
  • 14% collapsed as a result of poor marketing or ignoring customers

Benefits of Conducting Business Wellness Checkups

A business wellness checkup is an assessment that seeks to give you a picture of the current state of your business and hindrances to progress. It also determines specific actions to address any obstacles and map out your future direction. 

Assessments aren’t meant to find “cures” to your business’ woes or crises, the way you would go to a doctor only when you get sick.

As your business grows larger and you have staff and managers to handle the day-to-day affairs of your enterprise, you need to start developing a long-term strategy for your company. It involves welcoming proactive change.

Unlike reactive change, which is adjusting your reality in the face of opportunity or threat, proactive change is conscientiously moving from a current reality to a better future state. How can business wellness checkups do this?

  • A business assessment helps you identify your company’s strengths and weaknesses. It enables you to diagnose problems that can affect business sustenance, cash flow, growth, or profitability.
  • An assessment promotes the strategic use of your time because you can focus on issues that keep your business stuck, rectify missing links in operation, or start venturing into new growth opportunities.
  • It makes you examine external factors that may be affecting your ability to compete. It also helps you think of resources and other ways to gain a market advantage through skills, assets, finances, relationships, technical competence, and facilities.
  • Knowing the root of and addressing problems, especially debt and business flow issues, will save your company from further business risks.

Holistic Business Health Assessment

One way to assess the health of your business is by looking into each of the six core areas of business: 

1. Processes 

Processes include intake process or lead generation, which refers to identifying and cultivating potential clients, financial planning, risk management, investment planning and management, client service, and client planning and review.

2. Organization 

When we examine the company, we assess: 

  • Employers — their strengths, weaknesses, and how they can improve their skills to better manage the business
  • Employees — job descriptions and output, their strengths and weaknesses, absenteeism, employee turnover
  • Management team — what individual members contribute to the team, if their strengths and weaknesses result in strong team collaboration, if there are career development opportunities you can provide to complement their existing skills

3. Knowledge and technology

Are you using technology to help things work easier and faster? Do you have any of the following: customer relationship management tools, financial planning tools, investment planning and management tools?

4. Financials

Organizations must keep financial records up-to-date and plot future cash flow. Some important questions to ask are: 

  • Do you regularly forecast cash flow, upcoming sales, and profits? Are your forecasts accurate and reasonable? 
  • Do you notice a decline in sales this year compared to last year or previous years? What could have possibly caused the sales decline? 
  • Are overhead costs exceeding your profits? 
  • What is the current position of any lines of credit or loans? 
  • Will your financing be able to accommodate the growth and changing needs of your business?

5. Competition

Assessments help determine who your competitors are and what their strong points are. You can use benchmarking tools to see how you measure up to them. You can also assess the kind of customers you have compared to that of your competitors.

6. Market or Clientele

Examining your market involves knowing the customer demographics and what sections of your clientele are least and most profitable, exploring new markets, and knowing how to acquire more clients and how to improve your relations with them.

Business Financial Health: Checking Key Performance Indicators

AccountingDepartment.com co-founder Dennis Najjar lists five kinds of financial data that you can regularly monitor to evaluate the health of your business:


Business owners normally make sure that their incomes flow at a steady pace. 

When assessing revenue as a key performance indicator, you compare this month’s revenue from last month’s revenue and determine what caused it to rise or fall. 

Part of the wellness checkup can also be identifying what can be done to maintain the trend or boost low revenues — say, through a new marketing campaign or strategy. 

Direct Expenses

Direct expenses include supplies and materials for manufacturing, products, marketing, and other purchases that are used to earn profits. 

When performing a wellness checkup, look over your spending trends. Do you spend a lot at the same time that other bills are due? Instead of this practice, you can spread out your direct expenses over the course of the month instead of the end of the month, for example. 

Do you find yourself often losing receipts? Companies are now making use of automated expense management tools so that even if the piece of paper is lost, there is already a record of it that goes into a system. 


There are indirect costs or fixed expenses in operating a business such as rent, staff payroll, and marketing expenses — they come under the umbrella of overhead costs. 

The expenses can be stable or they can fluctuate with market rates, like when you employ additional personnel during holiday seasons. 

Gross Profit Margin

Gross profit margin is the percentage of every dollar you earn after deducting the value of direct expenses. 

As a key performance indicator, you want this margin to have an upward trend. However, there are times the margin declines due to price increases from your suppliers. Watch out for this trend, and adjust the price of your products accordingly to rebound from the downward trend.

Net profit margin

Net profit margin refers to the percentage of the revenue after all expenses are subtracted from sales. If you find this margin going down, you may have to examine your overhead costs to keep your business healthier.

You can include business wellness checkups to your quarterly plans and carry out solutions in manageable steps. Focus on one thing at a time every quarter, and take note of your progress before working on the next best piece of business development.

If you need more objectivity in assessing the current status of your business, engage an adviser to assist you.