1. What you will learn
By the end of this lesson you will be able to run a one-page health check on your business and use it to identify the single constraint currently holding back growth. You will learn the seven checks that fit on one page, how to score each honestly, and how to read the page so that it names one thing rather than producing a list of worries.
2. The idea explained
A health check is a deliberately short diagnostic. Its purpose is not completeness but decision: to move you from a general unease about the business to a specific, evidenced statement about what is limiting it. One page is the right size because a longer document produces a list, and a list produces no action.
Seven checks cover a small business adequately. Demand: are enough people asking? Conversion: do enough of those who ask buy? Margin: does each sale leave enough? Cash: is money available when needed? Capacity: could you serve more if it arrived? Concentration: how exposed are you to losing one customer? And dependence: how much stops when you are away?
Each check gets a number, not an impression, and then a verdict of healthy, watch or constraint. The discipline is that at most one can be marked constraint. If you mark three, you have not diagnosed, you have listed, and you will spread your attention across all three and change none of them.
Reading the page is where judgement enters. The constraint is not the worst-looking number; it is the one where a realistic improvement changes your position most. A business at full capacity with poor conversion should not work on conversion, because better conversion produces customers it cannot serve. A business with excellent margin and no cash should not chase sales, because more sales consume more cash. The question is always: if I fixed this and everything else stayed the same, what would actually change?
Apply it
3. How to apply it in your own business
Set aside two hours and gather what you have: twelve months of sales, your purchase records, your phone and message history, and your bank statements. Perfect data is not required; defensible approximations are.
For demand, count enquiries in a real recent month rather than estimating. For conversion, count how many became customers. For margin, take a typical recent sale and subtract every cost that varied with it. For cash, compute how many months your current balance would cover your fixed costs if sales stopped. For capacity, estimate honestly what share of your available time or equipment is used. For concentration, compute your largest customer's share of revenue and of contribution. For dependence, count the recurring tasks that stop without you.
Then mark each healthy, watch or constraint, and force yourself to exactly one constraint. Write one paragraph justifying it against the two closest runners-up, because the justification is what makes the diagnosis trustworthy three months later when you are tempted to change direction.
Worked example
4. Worked example
Geeta runs a small catering business serving offices and small functions.
Demand: thirty-one enquiries last month, which she counts from her phone. Her capacity is roughly twelve events a month, and she did nine. Verdict: healthy.
Conversion: nine of thirty-one, which is twenty-nine per cent. That looks poor, and she notes why before judging: eleven of the twenty-two she lost were for dates she was already booked or could not staff.
Margin: a typical function bills thirty-two thousand rupees. Ingredients cost fourteen thousand, hired staff six thousand five hundred, transport one thousand two hundred, and disposables eight hundred. So variable costs are twenty-two thousand five hundred and contribution is nine thousand five hundred rupees, which is about thirty per cent. Verdict: watch, since her fixed costs are high relative to this.
Cash: fixed costs are sixty-two thousand rupees a month including her drawings. Her bank balance is about eighty-five thousand, so her runway is under a month and a half. Verdict: watch.
Capacity: nine events out of a realistic twelve, but she notes the constraint within it — she personally cooks every event, and the twelve is set by her own hours, not by equipment. Verdict: constraint.
Concentration: her largest client is about fourteen per cent of revenue. Verdict: healthy.
Dependence: she counts eleven items, including all cooking, all menu pricing and all client meetings. Verdict: this is the same thing as capacity, and she resists marking a second constraint.
Her diagnosis is capacity, arising from her own dependence. Her justification against the runners-up is specific. Conversion looks like the worst number, but eleven of her twenty-two losses were capacity refusals, so fixing conversion without capacity would change almost nothing. Margin is genuinely thin and is her second priority, but raising prices while turning away a third of enquiries would be treating the symptom of a capacity problem as a pricing opportunity.
She quantifies the prize. If she could serve twelve events rather than nine, that is three additional events at nine thousand five hundred rupees of contribution, which is twenty-eight thousand five hundred rupees a month, or about three lakh forty-two thousand a year — against fixed costs of seven lakh forty-four thousand. It would take the business from marginal to genuinely viable.
5. Common mistakes and how to fix them
The commonest mistake is marking three constraints. It feels honest and produces paralysis. Force exactly one and write the justification against the runners-up.
The second is diagnosing the worst-looking number. Geeta's conversion was her ugliest figure and was a symptom. Ask what would actually change if you fixed each candidate.
The third is estimating rather than counting. A guessed enquiry number becomes the foundation of everything downstream. Spend the two hours counting a real month.
The fourth is leaving your own drawings out of fixed costs, which makes the cash check look far healthier than it is and removes the urgency the page should produce.
Key takeaways
6. Board summary
Seven checks fit on one page: demand, conversion, margin, cash, capacity, concentration, dependence. Each check gets a counted number and a verdict, and exactly one may be marked constraint. The constraint is where a realistic improvement changes your position most, not the worst-looking figure. Write the justification against the two closest runners-up, because you will be tempted to change direction later. Quantify the prize in rupees, or you have named a worry rather than a constraint.
Check your understanding
7. Practice and self-check
First, name the seven checks. Demand, conversion, margin, cash, capacity, concentration, dependence.
Second, why may only one be marked constraint? Because marking several spreads attention and changes none of them.
Third, a function bills thirty thousand with variable costs of twenty-one thousand. What is contribution and margin? Nine thousand rupees, which is thirty per cent.
Fourth, fixed costs are fifty-five thousand a month. How many functions break even? Fifty-five thousand divided by nine thousand is about seven.
Fifth, you do six and turn away enquiries for capacity. What is the constraint? Capacity, not demand or conversion.
Sixth, serving three more functions is worth what monthly? Twenty-seven thousand rupees of contribution.
Seventh, why is a poor conversion rate sometimes a symptom? Because enquiries refused for lack of capacity appear in the conversion figure.
Eighth, run your own seven checks this week with counted numbers, mark exactly one constraint, and write the justification.