A business analysis is a written review of how a whole business runs, built from its own records. It shows where the time and money go, what to fix first, and what to leave alone.
What a business analysis covers
A full one looks at the whole business, not one department:
- Money. Which work is profitable, what was done and never billed, and how long you wait to be paid.
- Customers. Who stays, who drifted away, and what the ones who left had in common.
- Marketing. Where new customers come from, what each source costs, and what each customer is worth.
- Response. Missed calls, slow replies and quotes nobody followed up.
- Time. Hours paid against hours that earned money, the owner's included.
- Software and records. Every tool you pay for, what it duplicates, and where two of them disagree.
- Risk. What breaks if the owner is away for a month.
Who normally gets one
Large companies commission them before they change software, prices or marketing. They have analysts on staff, or they hire a consulting firm. A small business has almost never had one, because the work took a team of people to do.
How it differs from other documents
| Document | What it answers |
|---|---|
| Business analysis | How is the whole business running, and what should change first? |
| Bookkeeping and financial statements | What was earned, spent and owed? |
| Business plan | What do we intend to do, usually for a lender or investor? |
| Business valuation | What is the business worth to a buyer? |
| Software assessment | Which software should we use? |
How to judge one
Open it and look for a number that came out of your own business. If every figure is an industry average, nobody read your records.
A good one marks each figure as counted from your records or estimated, and states the assumption behind each estimate. It also states every option with its cost, including doing nothing.
What one costs, and how long it takes
Consulting firms charge for this work, and the price depends on the size of the business. Sannidhi writes the first Business Analysis free, and the owner keeps it whether or not they work with us afterward. It takes about one week from the first conversation.