If you were to study a sample of 100 businesses that recently failed, you’d find that many of them had actually been in business for a number of years. They might even have experienced a string of successes over a long period of time.

But at the end of that process, they failed to adapt and improve. They became stagnant, stale, and eventually irrelevant.

Failure isn’t always preventable, but you can control some of the particulars. One of the best courses you can take is to can keep your company from falling out of touch with reality by conducting regular assessments.

“An assessment refers to an evaluation. It is an estimate of what is going on with a certain process and whether there are new risks or benefits to be considered,” explains PinnacleArt, which works with plant managers to implement powerful reliability solutions that mitigate risk.

An assessment is not an audit, which typically results as the outcome of an inspection and requires a documented pass or fail. In contrast, an assessment entails a simple evaluation that utilizes key performance indicators (KPIs) to yield measurable feedback which your organization may use to improve.

An assessment is like a health checkup for your firm. It uses scientific data points to evaluate how your operation is performing in key areas.

But it also provides subjective insights on how you can improve your results and sustain success. As Uhuru Network states, “A business assessment is not statistics. It will most certainly have stats as a part of it, but we are looking for a total health check … not just pulse and temperature.”

If you apply a proper business assessment, you should get a big-picture view of how your business is doing, with an up-close perspective on key aspects that could be underperforming. This will give you the opportunity to implement proactive solutions, rather than keep reacting to events that limit your options.

There’s no inherently right or wrong way to conduct a business assessment. Numerous strategies, frameworks, and schools of thought are available to you. Here are four of the best ones to consider.

If you attended business school or have any of the classic business texts ready to hand, you’re likely familiar with the SWOT analysis. This framework involves the identification of four key facets of your business: Strengths, Weaknesses, Opportunities, and Threats.

Conducting an annual SWOT analysis should assist you in zeroing in on the positive things that are happening, but also shining a useful light on the challenges your company continues to face. You can use the SWOT as an exploratory method of assessing your company operations as a whole.

Another business assessment model involves taking a spreadsheet and dividing it into three columns:

● Positives. What’s working well in your business? Where are you succeeding? What’s been accomplished since the last assessment?

● Reality Check. This is where you list all your business goals that haven’t been met, challenges you continue to face, and setbacks you’re currently dealing with. Try to be as objective about these as possible. This isn’t a place for justifications and excuses.

● Assessment. The final column devotes space to addressing the challenges identified in column two. It also empowers you to build on the positives collected in column one.  

You oughtn’t to conduct an assessment in isolation. It’s helpful to gather your most respected team members and give them an opportunity to provide feedback.

This is more likely to result in a well-rounded sense of the entire picture. It will expose items you may not have been aware of, but it could also validate some of your observations and opinions.

A completed assessment without any action to follow up is nothing more than an exercise in wasting time. You need to implement steps that will overcome your challenges and take advantage of perceived opportunities.

Here again, including key team members in the process will help to produce meaningful results. As a part of your implementation plan, be sure to set goals and KPIs that enable you to measure the results. Otherwise, you won’t have a clear picture of how you’re doing. 

There are a variety of ways to conduct a business assessment. You can be as superficial or detailed as you like.

You can conduct an assessment every quarter, once a year, or even less often than annually. It will ultimately be your decision when and how you assess your business operations, but it should be often enough to ensure you stay on top of performance.

If it’s not, you will inevitably fall behind and are sure to miss out on opportunities for growth.