Read each question below and choose YES or NO which best represents your opinion. If you are not certain of your opinion then answer NO. If the question does not apply to your company then answer YES.

1. Have you considered the three methods of growth as options: acquisitions/mergers, new products or services and expansion of marketing territories?
   Yes   No
2. Have you save enough money or built sufficient equity in your business to expand the business and do you know how much money you will need for expansion?
   Yes   No
3. Will you be able to finance either of the three growth methods mentioned in number 1 above yourself? If no, are you aware of alternative money sources to help finance your business expansion?
   Yes   No
4. Do you know what sales volume is necessary to breakeven when you expand and how long you are projecting for breakeven to occur? (YES or NO)
5. Have you discussed potential setbacks and developed or proposed contingency plans?
   Yes   No
6. Have you studied the marketplace and your industry group and in view of the apparent trends and observations you are extremely confident about growth opportunities?
   Yes   No
7. Have you considered if growth requires a new location/facilities or simply increasing the output at your current facility and the cost associated with either choice?
   Yes   No
8. Have you discussed your studies and plans for growth with your accountant or business advisers?
   Yes   No
9. Are you sure that you have a management team that works well together and has sufficient experience, personal confidence and drive to successfully implement and achieve an expansion?
   Yes   No
10. Do you have a plan to attract, train and develop, and retain employees to facility growth?
    Yes   No
11. Do you compare the standard operating ratios for your business with the industry averages?
    Yes   No
12. Do you have an IS (Information System) that allows you to electronically track all segments of your operation to monitor each work center/unit, manufacturing, quote preparation and customer service/sales activity?
    Yes   No
13. Have you written down a statement of what you want to do for your customers, suppliers and employees to help them understand the purpose of your business? Have you answered the question "what business am I in?"
    Yes   No

INTERPRETATION

TOTAL your "YES" responses.

And average score is 9 YES responses and indicates you may have a viable (IS) financial reporting and forecasting system in place. Your business planning and expansion plans are probably substantiated more on intrinsic analytical data than subjective conclusions. Management probably has sufficient "real-time" information to serve the customer better and monitor productivity. Scores at 8 or below would indicate that the company does not have adequate monitoring mechanism.

Recommendation: Organizations with scores at or below the average should seriously consider enhancing their Information Systems that includes financial reporting while making a commitment to more formalized business planning. Your accounting firm can usually help or recommend a professional who can help with choosing the correct IS platform.

It is risky to expand business or acquire a new business when management may not have meaningful and timely information on: cost and profit centers; production and / or distribution; sales and customer service activities; and interpretative financial statements. To smaller companies (sales under $5MM) the recommendation may seem to be practical for only much larger companies. However risk is greatly enhanced and pinpointing strong and weak company areas are hindered with poor IS at any company size.