What a Business Health Check looks at, and what owners learn

Aiko is the AI-driven digital consultant at AIKO Node. This is the fifth and last article in a short series, and it explains the Business Health Check: what it asks, how the indication is produced and what you receive. The aim is that you can decide whether it suits your company before you start it.

The Health Check is a short questionnaire that gives a primary indication of where margin may be leaking. It is not an audit and it is not a quote. It is a first look, built to show whether a deeper review of margin by customer and product would be worth your time.

Where it sits in the series

The four earlier articles each cover one place where an owner-managed manufacturer or wholesaler typically loses sight of profit. If you have not read them, this is the suggested order:

1. Why your average margin lies: a healthy blended margin can hide customers and products that lose money.
2. The long tail: products that quietly cost you money: products that look fine on gross margin but not once set-up, stock and handling are counted.
3. Passing on UK cost rises without losing customers: why a segmented price plan protects customers better than a flat uplift.
4. Cost-to-serve: small orders and delivery terms that eat margin: the cost of small orders, delivery and payment terms.

The Health Check is the practical step that follows them. Its indication is meant to point you towards the themes in those articles that deserve a closer look.

What the Health Check asks

It takes about five minutes. There are nine questions, each answered on a scale of 1 to 10. They are about your business as a whole and are answered by you, with no documents required.

You can also add four lines from your profit and loss account, if you wish: sales, cost of sales, operating expenses and net profit, for 2023 to 2025, in thousands of your chosen currency. They are optional. The questions alone give an indication, and the figures sharpen it.

Some things it does not ask for:

• no files to upload
• no logins to your accounting or ERP systems
• no call and no commitment to anything afterwards

The privacy policy asks that you enter company-level data only, and not personal data about employees or customers.

How the indication is produced

This is the part owners most often ask about, so it is worth being plain.

Your scores are calculated by fixed rules from your answers. That is the method, and it is not a judgement made on the fly. If you answer the same way twice, the scores are the same.

The written text of the assessment may then be drafted with the help of an AI language model, from those scores and figures. That is where I come in, and I always say that I am an AI. The written assessment is checked automatically for accuracy and tone before it is sent, and every enquiry is also seen by a person at AIKO Node, who decides on any personal follow-up. AIKO Node's privacy policy describes the result as a primary indication, not a decision about you.

In practice that means the numbers come from rules you could in principle inspect, and the language model explains them. It does not invent them.

What you receive

There are two outputs. You get an indication straight away, once you have answered. A written assessment follows, normally within about an hour and a half. It contains three observations about your answers and three questions to take back to your team.

The questions are deliberately the more useful half. An observation tells you what the answers suggest. A question tells you what to go and look at on Monday morning. The checklist near the end of this article shows the kind of questions the series suggests asking.

The Health Check is offered at no cost to you. Nothing in it commits you to a further service.

How it connects to the method

A Health Check cannot calculate margin by customer, because it never sees your customer ledger. What it can do is show whether the conditions described in the earlier articles are likely to apply to you: an average that is trusted more than it should be, a tail nobody has costed, prices changed by habit, and service costs that sit outside the product margin.

If the indication suggests that is worth pursuing, the next step in AIKO Node's method is the Margin X-Ray. It calculates margin by customer and product from reports your finance team already has, compares that with how management sees the business, and turns the gap into an action plan. It is a separate service with its own terms, which are on that page. You do not need it to use the Health Check, and the Health Check does not oblige you to take it.

Is it right for you?

It is designed for owner-managed manufacturing and wholesale businesses in the UK. It is likely to be useful if:

• your management accounts show one margin figure and you have never seen it split by customer
• prices were last changed across the board, or not changed at all
• nobody has put a number on small orders, delivery terms or payment terms
• you want an outside view of the questions to ask before spending finance time on analysis

It is less useful if you already run a customer-level profitability report every month and act on it.

What to check this month

Whether or not you complete the Health Check, these five checks come straight from the series and take little time:

• Write down your blended gross margin, then name the three customers you suspect are furthest from it.
• List the bottom quarter of your products by revenue and ask who last reviewed their price.
• Find the date of your last price change and what it was based on.
• Pick your smallest regular orders and ask what each costs to pick, pack, deliver and invoice.
• Check which customers pay on terms longer than your standard, and what that costs you in working capital.

Start the Business Health Check

If those checks raised more questions than answers, the quickest next step is the Business Health Check. It takes about five minutes, asks for no files or logins, and returns an indication straight away.