How do I know if my existing plan will work?

Conducting a thorough stress test on a closely-held business will determine strategic planning deficiencies and enable the success of the business. A stress test for a cardiac patient consists of monitoring the patient on a treadmill to see how well the heart reacts when placed under the stress of sustained exercise. A stress test for a structure involves placing it under a higher than the expected load to see if it is as strong as engineering predicts. Financial regulators place banks under stress tests by using sophisticated software models that allow the testing of certain stresses alone and in combination with other events to see if banks have sufficient capital.

Stress testing procedures consist of the initial inquiry, the application of the stress situation or situations, and an analysis of the performance under stress. It is not necessary to construct a complicated piece of equipment or a sophisticated computer model to accomplish a stress test on a closely-held business.

Please click to access a PDF describing the process of accomplishing a stress test on a business.