Statistics show that it’s getting tougher for small business to survive.

ASIC says that 78 per cent of growing insolvencies are small businesses that have fewer than 20 employees.

These concerning figures, ASIC points out, are often the result of four factors:

* poor strategic management of business

* inadequate cash flow

* high cash flow use and trading losses

* poor financial control such as lack of records.

In the light of these challenges, Open Universities Australia is offering a new free subject, Diagnosing the Financial Health of your Business, which teaches business owners to assess the strength of their business and identify early warning signs of potential future problems.

Offered through OUA’s Open2Study initiative, the free subject is designed for owners to up-skill and manage their businesses better.

“Online learning provides an opportunity that suits the requirements of small business owners,” said Open2Study executive general manager Jose Herrera Perea.

“These courses offer flexibility and industry leading knowledge to keep business owners up to date on the financial health of their business.”

Diagnosing the Financial Health of your Business requires about two to four hours of study a week, but can vary depending on the student. This includes watching videos, and taking quizzes and assessments.

On passing the course, the student will receive Certificate of Achievement. While the certificate isn't a formal qualification or credit, it can be used to demonstrate an interest in learning about this area to potential employers or educational institutions.

“A profitable business may not necessarily be performing well or taking the right steps to build for its future,” Mr Herrera Perea said.

“Just as a doctor conducts a diagnosis of a patient and recommends a course of treatment, businesses can use simple and yet powerful tools to analyse a business and identify where and how things can be improved.”

Among just some of these health check tools, said Mr Herrera Perea, should be:

* Analysing your finances to make sure that balance sheets, income statements and cash flow statements add up;
* Identifying early warning signs of potential financial difficulties by keeping up to date with your balance sheets and maintaining a realistic budget;
* Assessing risks by reference to financial reports.

Open2Study also offers Strategic Management for small business. Strategic management is one of the most important "hard skills" in business management, managing businesses and projects proactively, with a focus on long-term strategy, rather than reacting to day-to-day hiccups, Mr Herrera Perea said.

* This article was provided by Open Universities Australia as part of a commercial agreement.