The Business Academy

Business Health Score

Five financial dimensions. One honest score. Know exactly where you stand and what to fix first.

Your score

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Why this tool matters — read before you start ▼

Most business owners don't actually know how healthy their business is. They have a feeling. This tool gives you a number.

We ask every member the same questions: "After paying all expenses, what percentage of your revenue becomes actual profit — and is that sustainable?" And: "If your biggest client left tomorrow, how would it impact your cash flow?" And: "Have you reviewed your pricing and profit margins in the past 12 months?"

Most owners avoid these questions because the answers are uncomfortable. But you cannot fix what you are not measuring. Financial health is not about having a perfect business — it is about knowing which lever to pull next. A score of 42 does not mean your business is failing. It means you now know exactly where to focus.

We score across five dimensions we consistently identify as the foundation of a sustainable, scalable business: net profit margin, cash runway, client concentration risk, gross margin, and financial forecasting. Each one tells a different story. Together they tell the whole one.

Revenue is vanity. Profit is sanity. Cash flow is reality. You need all three working before you invest in growth. This tool tells you which of the three needs attention first.

How to use it: Enter your numbers below — each field explains exactly what to include and why it matters. Your score updates live as you type. The "fix this first" section ranks your three weakest areas by urgency. The benchmarks at the bottom explain what good looks like and why those numbers are the standard.

Your numbers

Monthly revenue ($) Total cash received in the business each month — not invoiced, not projected. If your revenue fluctuates, use a 3-month average. This is the starting point for every metric below. Revenue is not profit. The gap between the two is where most businesses are quietly struggling.

Monthly expenses ($) Every cost that leaves your business bank account each month — fixed costs like rent, salaries, software, and insurance, plus variable costs like materials, delivery, and commissions. Include everything. This number drives your net profit margin, which is the single most important indicator of whether your business model is actually working.

Cash reserves ($) The total cash sitting in your business accounts right now — not personal accounts, not credit lines, not money already earmarked for outstanding tax or supplier invoices. We call this your war chest. It is what keeps the business alive when something goes wrong. We benchmark it against 3 months of expenses because that is the universally accepted minimum safety buffer.

Largest client — % of revenue What percentage of your total monthly revenue comes from your single largest client or revenue source? We ask this because it is the question most owners never want to answer honestly. It is also the first thing banks, investors, and acquirers look at. A high concentration score means a single phone call you did not make can change everything about your business.

Gross margin (%) The percentage of revenue left after paying the direct costs of delivering your product or service — before overheads. Formula: (Revenue minus cost of delivery) divided by revenue, multiplied by 100. We measure this because it tells you how efficiently you convert a sale into working capital. A weak gross margin means you are burning most of your revenue just to deliver — leaving almost nothing to cover overheads, invest, or profit from.

Do you have a 90-day financial forecast? A 90-day forecast is a simple projection of expected revenue, expenses, and cash position for the next three months. We include this because forecasting is how you catch problems before they become crises. Most owners skip it entirely. The ones who do it consistently make better decisions, grow faster, and are almost never surprised by their own cash position.

Your score

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out of 100

Metric breakdown

Fix this first

What does good look like? — benchmarks explained

Net profit margin

Target: 15–25%+ for a healthy SME. This is the percentage of revenue that becomes actual profit after all costs. Under 10% means your overheads are consuming your revenue and you have very little room to absorb any shock. Under 5% means you are essentially working to break even. We see service businesses target 20–35% and product businesses typically run 5–20%. If you do not know your net margin, that itself is the first problem to solve.

Cash runway

Target: 3–6 months of monthly expenses held in reserves. Calculated as reserves divided by monthly expenses. Under 2 months is a danger zone — one bad month or one slow-paying client can cascade into a crisis. 3 months is the minimum buffer we recommend. 6 months means you can invest in growth from a position of strength rather than desperation. This is not an industry benchmark — it is a universal principle of business survival.

Client concentration

Target: no single client above 20% of total revenue. Above 30% is elevated risk. Above 50% means your business is functionally dependent on a decision made by someone else. We teach this because it is one of the first things assessed in any business sale or investment process — and high concentration materially reduces your valuation. Diversification is not just risk management. It is a business value strategy.

Gross margin

Target: 50%+ for service businesses, 30%+ for product businesses. Gross margin is the foundation everything else sits on. If it is too low, no amount of revenue growth fixes your profitability — you will just lose money faster at scale. A strong gross margin gives you the capital to cover overheads, invest in marketing, build a team, and still profit. If it is weak, the fix is almost always pricing first, then delivery efficiency.

Financial forecasting

Target: a rolling 90-day forecast reviewed monthly. This does not need to be complex. A simple spreadsheet projecting revenue, expenses, and cash position three months forward is enough to change how you run the business. We consider forecasting the backbone of financial decision-making. Businesses that do it consistently catch problems before they become crises, plan with confidence, and almost never get surprised by their own numbers.

Disclaimer: This tool is for educational purposes only and is designed to prompt financial awareness and reflection. It does not constitute financial, accounting, or business advice. Scores and benchmarks are general guidelines — your industry, business model, stage, and individual circumstances will affect what is appropriate for you. All calculations are based solely on the inputs you provide and should not be relied upon as accurate representations of your financial position. Please consult a qualified accountant or financial adviser before making financial decisions.

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