What is a business diagnosis?

If what we want is to know the current situation of a company and what are the main obstacles that prevent it from continuing to grow, the business diagnosis is one of the most used and effective tools to be able to carry out this type of study. Thanks to this diagnosis we will be able to find the root of the problem, which will allow us to put all the necessary resources to eliminate it and make the corporation maintain, or recover, the right course.

Despite the fact that in many cases this type of diagnosis is left under the supervision of experts on the subject, such as consultancies or professionals outside the company to be evaluated, the truth is that there is also a large percentage of those responsible for their own businesses who they choose to take this responsibility.

Definition of business diagnostics

If we access the dictionary of the Royal Spanish Academy, we will find that the term diagnosis comes from the Greek word “diagnosis” , which translated into Spanish is the same as “knowledge”. Now if we focus on the business world, this term refers to those activities that are carried out in order to know first-hand what the company’s situation is and its main impediments to achieving its objectives.

As in most fields, there are many diagnoses for companies, some focus only on studying production processes and consumers, or even sales processes, among many others. These diagnoses are carried out through specific methodologies that allow knowing all those specific details of the company, which places it as a necessary and recommended tool.

Business diagnostic classes

Within the classes of diagnoses that we find, we could gather and classify the vast majority into two large groups, these allow us to differentiate one from the other based on their characteristics and applications.

  • Comprehensive diagnostics: They are mainly known for the large number of business variables to which it can be applied. To give an example, we could find the Competitiveness diagnosis, a study that allows us to know the opportunities, weaknesses, advantages and threats of a company. And all this based on the evaluation and consideration of numerous variables that the consultant in question has scored and included in the analysis.
  • Specific diagnoses: They are characterized by focusing on those more specific processes, that is, they study different aspects of the market, financial statements or management processes, and any other related to production and consumption.

How is an effective business diagnosis achieved?

Regardless of the approach that we intend to give to the diagnosis, specific or comprehensive, 4 processes must be taken into consideration that, according to some professionals in the sector, will be the ones that will guarantee a good work and study that will allow to obtain very good results:

  1. Evaluation. We will establish a parameter that will allow us to evaluate the current situation or could arouse interest in the company, focusing on those points on which we want to make the diagnosis, consumers, financial section, production process, etc.
  2. Detailed view. It is at this point that the team or person in charge of making this diagnosis focuses especially on collecting all the possible information about the specific system of the company for which they are interested in studying. This process is possible thanks to the taking of images, tables, graphs, interviews and all kinds of resources that allow us to know the current situation first-hand.
  3. Calculations. At this point and with the information collected from the previous phase, it is time to establish the degree of scope based on the parameter that you have wanted to set.
  4. Conclusions. All the information that has been collected is analyzed and studied to evaluate and find out the reasons that prevent reaching those parameters that were established at the time. Knowing the problems, it will be much easier to find the solutions.

Perspectives of a business diagnosis

All this diagnostic work can be carried out from different perspectives, although we will mainly find 4, which we are going to show you below:

  • Financial. It covers the entire accounting and management department of the company, evaluates all its numbers and studies what its current situation is. Know their investments and sources of financing among others.
  • Consumers. From here all the data related to the behavior of the clients and their treatment are evaluated.
  • Internal process. It focuses mainly on the study of the company’s production processes. Determining its quality and effectiveness.
  • Staff and their capabilities. It makes a comparison with the capacities that the active personnel of the company have and those that theoretically they should have to achieve high levels of efficiency.