When is Business Analysis Performed?

Performing business analysis is important to be done at the first stages of planning the business. To examine the business and operational feasibility of an idea/project it is recommended to perform business analysis - which will show its full potential- for better or worse.

After an introductory meeting you will know:

The analysis assesses a company’s central profit which in practice, checks its potential profitability (including the negative side). It is recommended to perform it as a preliminary stage for executing a business plan which includes a large variety of issues that are not necessarily relevant to the business at its early stages.

Still, the business analysis answers the needs of businesses that already have a business plan, but do not meet the objectives they set in their business plan. This phenomenon is known to many businesses. In fact, approximately 98% of cases show that the plan made and actual performance differ. Therefore, the business analysis report performs a thorough examination of the business plan in its financial, operational and business aspects. In addition, the report’s cost is significantly smaller than the cost of creating a business plan.

For example, a business belonging to the food industry that turned to us recently created its business plan almost 3 years ago yet still cannot reach profits. According to this business’s business plan, it should have invested approximately 100,000NIS in a quarter on advertising, but at the same time had a sales cycle that required a significantly larger investment in advertising – therefore, the business, despite making a considerable investment, did not make sufficient profits. The business analysis report analyzes the business’s expenses in accordance with its revenue cycle. The report is not based on predictions, but on realistic scenarios for the specific business. The Institute of Business Analysis in Israel holds a large number of databases on which we a realistic sales plan is founded based on a specific business’s ability to enter the relevant industry.

Another example is a business in the high-tech industry which we recently encountered. The young minds who manage groundbreaking projects in Israeli high-tech are not necessarily supported financially. This applies for both the company’s financial and business conduct and constructing its business plan. Particularly in an industry that is at a high risk and sensitivity level, the business analysis report helps potential entrepreneurs/investors minimize the high risk level that lies in an investment.
There are unique cases for which the business analysis report cannot be used as a helping tool for a business. For instance, a business that approached the Institute of Business Analysis at a stage in which their product/service is ready but the overall financial conduct of the business does not suit its character and it lacks the ability to obtain additional bank credit. Had the business turned to us at an earlier stage, we would have been able to advise it with an appropriate financial solution.

In conclusion, it is recommended to perform business analysis prior to every business move in which great amounts of money and resources are invested in. The results of the business analysis will allow you to see a true, up to date picture of the business and its potential and act accordingly in order to reduce investment risks and increase the chances of business success.