How to Size Up Your Business and Determine a Path Forward
How has business been going for you? If business has not been going too well, perhaps it is time to size up your business and determine a path forward. The first step is to have a detailed look at your current situation. To do this, perform a current state and SWOT (Strengths Weaknesses Opportunities Threats) analysis.
The current state analysis is used to identify where your business currently stands. You need to know where you are at before you can take a path to where you would like to go. Consider these areas to determine your current state:
Sales and revenue – have they been increasing or decreasing? What has been causing the movement?
Profits – have they been increasing or decreasing? What has been causing the movement?
General financial condition – is your business in good financial shape? Could your business survive a 50% reduction in revenues over the next three months and survive?
Marketing – do you have a marketing plan in place? Is it working?
Operations – are they efficient? Do you seem to have recurring issues in fulfilling customer orders?
Customers – make a list of all of your customers or customer types. Order these from most to least profitable. Note how this list may be slightly different than ordering by most to least revenue.
Competition – make a list of your most formidable competitors.
Your team – are your team members happy and efficient? Is your turnover rate high or low?
Trends – make a list of demographic, market, regulatory and other trends that affect your business.
Strengths and Weaknesses
In the SWOT analysis, strengths and weakness pertain to the internal operations and assets of your business. These are items that you can somewhat control. The current state items of financial condition, customers, marketing, operations and team members may be included. Other items for consideration may include market reputation, quality of products & services, intellectual property and your tolerance for risk and change.
Opportunities and Threats
These items pertain to issues outside of your business. These are items that you do not have much control. Items like competitor actions, new laws & regulations, market trends, technology changes and demographic trends should be considered.
Putting It All Together
Review the current state and SWOT analysis to identify possible solutions. In general, you are looking to leverage a strength with an opportunity or strengthen a weakness that is magnified by a threat. Some examples:
Perhaps you see a trend in a market sector where your products and services could be used.
Perhaps you have a strong financial condition allowing you to acquire another business.
Perhaps you need to develop a training program for your team members to improve internal operations.
Perhaps you need suppliers with better customer service and shorter lead times.
Perhaps you are so attached to the status quo that personal reflection and adjusting your tolerance for trying new solutions and risk is in order.
Each business is unique. The list of possible solutions could be long. Choose the ones you believe would have the most positive impact relative to the required investment to implement.
Contact us for help in developing your solutions.