Small business owners should regularly take the time to conduct a personal and business self-assessment.
As a business owner, performing self-assessments are one of the most important keys to sustaining a thriving business. The corner stone of all businesses is their ability to maximize sales, operations and financial operations. With that being said, self-assessment is critical to understanding and making changes and improvements to those key components.
“I am constantly assessing the world around me in order to ascertain what decisions I need to make. There comes a point when some are just more important than others.”
The statement above, are words spoken by Miles A. Slater, a former President and CEO of Salomon Brothers International Ltd., an Investment Bank. Miles was a strong advocate of personal and business self-assessment. He later on in life became a successful sculptor donating the majority of his works to philanthropic organizations.
Among his works was “Rescue”, an interpretation of the fireman carrying a child from the rubble of the bombed Alfred E. Murrah building in Oklahoma City.
In a New York Times article Miles reflected on the piece: ''The strong bronze arms of the fireman cradle the child and echo the abstract form that cradles the granite rock in ''Unfinished Lives,'' he said. Synchronicity again? ''I didn't do it consciously . But I did want to show that men can nurture. The sculpture says, 'Let me give you my strength,' '' he said. Mr. Slater left the roughness of the original stone at the bases of both pieces of work untouched. ''They are meant to look as if they were coming up out of the debris,'' he said.
Miles’ resignation statement from Salomon Brothers in 1988 supported the following self assessment values:
Self-assessment from a financial point of view in a business occurs monthly.
The process begins after the books are closed on a monthly basis and two questions are asked. The two questions are "how did I do this month and how can I do better?
The first question
The first question is answered by having the accounting processes and controls in place to produce financial statements reflecting monthly and year to date results.
The second question
The second question, “how can I do better,” is where true business self- assessment comes into play. If a company is doing well then the business owner must not take its successes for granted; the process, people and customers that have facilitated the current level of success must be analyzed and questioned.
The reason success must be challenged
The reason success must be challenged is because it could be either partially or completely based off a current set of false pretenses in the marketplace, such as an “economic bubble”. Without the continuous assessment of business success and its relative components, a possible downturn can result in the future. For example, there were many successful retail businesses that were hurt by the internet boom during the late 1990’s and early 2000’s.
Many took their current level of success for granted and did not conduct the proper self- assessment, such as understanding the viability and future pitfalls of their business that would have enabled them to adapt and make changes.
The successful companies that survived this era of robust technological disruption incorporated changes that helped them adapt and evolve into the internet age, thereby avoiding a financial downturn.
Next- The process of self- assessment for a business must also incorporate mistakes and failures.
About the author
Alexander J. Hart of Cuban American decent is principal and founder of Hart Vida Raffo. With over 25 years of experience, Alex specializes in the areas of tax strategy and planning, business process improvement, and capital consulting. Whether advising on capital and financing strategy or consulting for privately-held professional services firms, Alex has the expertise and practical know-how to help any company optimize their business processes and make tactical financial decisions. He began his career at IBM in sales operations and accounting. He was a Controller for the N.Y. Post, has been a CFO for a medical device company, and has written a tax column called “Ask the Tax Guys” for Micro-Cap Review. Alex is a professional member of A.L.T.A. (Affiliated Lawyers of the Americas), a member of the National Association of Tax Preparers, and is a contributing author and mentor at Latin Business Today. Alex graduated from St. John’s University with a B.A. in Spanish and his M.B.A. in Finance. He obtained his accounting degree from Pace University.Website