25 Questions Every Business Owner Should Be Able to Answer

When I begin a new engagement, one of the first things I do is work through a diagnostic framework with the leadership team. It covers governance, finance, operations, compliance, and culture. It is systematic. It is thorough. And it is consistently revealing — not because it asks exotic questions, but because it asks basic ones that most businesses have never formally answered.

A business that can answer all twenty-five questions confidently, with evidence, is in good shape. Most businesses cannot. The gaps those questions expose are almost always where the real work is.

Governance & Strategy

— Is the strategic plan written, and is it reviewed and updated annually?

— Are accountability, responsibility, and authority well defined and aligned within the organizational structure?

— Do investors receive meaningful and regular updates on the performance of the organization?

Finance

— Does the company have reliable and meaningful financial statements?

— Are financial statements prepared timely each month, compared to budget, with variances explained by management?

— Is a fiscal year budget prepared, with actual results compared to budget and variances researched monthly?

— Is a cash flow forecast prepared each month?

— Are sales and revenue targets established, with performance measured on an ongoing basis?

— Are capital expenditures adequate to support the business, and are such expenditures cost-justified?

— Are payroll, state, federal, and sales taxes current?

— Is revenue recognized according to generally accepted accounting principles?

— Are financial statements reviewed or audited annually by an independent accountant?

Operations

— Is the marketing plan researched and prepared annually, with quarterly reviews and adjustments?

— Are competitor profiles documented, with competitive activity reviewed at least quarterly?

— Are suppliers on favorable terms, with supplier relationships documented and reviewed for concentration risk?

— Are accounts receivable and accounts payable current?

Compliance & Risk

— Are business licenses current in all locations?

— Is insurance adequate for the business and its associated risks, with annual evaluation for under- or over-coverage?

— Is any threatened or pending litigation documented?

— Are all patents, trademarks, or copyrights appropriately registered?

People & Culture

— Is the employee handbook current and effective, with all employees having signed confidentiality and non-disclosure agreements?

— Are safety and training procedures documented and followed?

— Is customer satisfaction measured, with results shared and used to set goals?

— Is employee satisfaction measured, with results used to improve the organization and culture?

What to do with the answers

Run through this list honestly. For each question, ask: can we answer this with evidence, not assumption? If the answer is no — or if the honest answer is “we’re not sure” — that is a gap worth addressing.

These twenty-five indicators are the foundation of our Operational & Financial Stability Assessment. We use them at the outset of every engagement to establish a clear baseline. If you would like to work through them with your own team, reach out. The first conversation is free.

Scott Stone, CPA, MPA — Founder, Sightline Resources