What is an operational audit (and why your business needs one to ensure scaling success)

As soon as I mention the words “operational audit” to a potential Visionary client, I often see their eyes glaze over. Audit often conjures images of a boring and detailed process that doesn’t usually appeal to a Visionary entrepreneur.

But I’m here to tell you that in order to scale your business successfully, you NEED one!

In this article, I’ll break down what an operational audit is, the benefits of an operational audit and I’ll explain why my Scaling Success Audit is usually the first step in my Done With You Operations Consultancy.    

What is an operational audit?

According to official definitions an operational audit is a systematic review of effectiveness, efficiency and economy of operation. Operational audit is a future-oriented, systematic, and independent evaluation of organisational activities.”

What this actually means is that an operational audit is a process to evaluate a business’s operating activities. An auditor isn’t trying to determine if processes are correct or compliant, they are trying to find possible improvements in the business processes. It is forward looking rather than retrospective (which is the case with many other types of audits).

The scope and duration of an operational audit can vary widely. So the first step is to always establish the audit’s objectives. The audit can look to answer a specific concern or focus on a specific department / area of the business.

For example, when I’m conducting a Scaling Success Audit, the objective is to identify the strengths and weaknesses in 3 key areas in order to discover what you need to focus on to scale successfully:

  1. Planning - Business Plans & Goals, KPIs, Financial Plans 
  2. Processes & Systems - Are key business processes defined, documented, systemised, communicated and followed? Are the software systems your business needs to effectively and efficiently carry out your key business processes in place and being used regularly?  
  3. People - Team structure to scale successfully, training and onboarding, communication and accountability.   

what is an operational audit

The benefits of an operational audit

The ultimate aim of an operational audit is to optimise efficiency and this is why in order to scale your business successfully, you NEED one. Scaling your business is about growing your revenue without a substantial increase in resources so optimising efficiency is paramount.

The results of the audit are most useful to the management team, who can take these recommendations on board to streamline processes.

There are many benefits to an operational audit so I’ll focus on the top 3:

  1. Influence Positive Change: Gain a greater understanding of how processes, policies, procedures, and other types of operating activities can be improved for maximum effectiveness and efficiency.
  2. Understand Risks: An operational audit identifies operational risks ranging from business interruption, employee omissions or errors, IT system failure, loss of key employees, loss of suppliers, and, at its worst, litigation. 
  3. Inform Senior Management: The results of the audit should appear in a clear report that provides objective analysis and recommendations that can be implemented to help the business scale and grow with optimum efficiency, effectiveness and minimal risk.

There are many reasons to consider an operational audit but it’s also important to remember that when it’s performed by an outside party, it provides a business with an objective overview of its operations. These objective insights often lead to improved sales, quicker delivery processes, and streamlined systems. Ultimately this means slick operations, an increased focus and a team that runs like clockwork.

Scaling Your Business Successfully

For all these reasons, my Scaling Success Audit is usually the first step in my Done With You Operations Consultancy.  As mentioned previously, it covers the 3 key areas to scaling your business successfully: Planning, Processes & Systems and People.

Scaling your business from 6 to 7 figures can feel like a daunting task so discovering the areas to focus on, laid out in a structured 90-day plan, can alleviate overwhelm. Further, my objective insights can uncover truly transformative actions that will help your business scale with sanity and focus.

Scaling Secrets from your
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Scaling Secrets from your
Pragmatic BFF

The Email Newsletter for ambitious and visionary entrepreneurs, who need a down-to-earth best friend. Sign up to get fortnightly, actionable insider advice and tips delivered straight into your inbox. Designed to help you successfully scale with sanity and focus. Always keeping it simple, created to make sure you avoid common scaling mistakes, and it’s FREE.

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