As you head into the last months of 2011 it is important that as a business owner you begin to take stock of the business in order to begin your process of preparing for next year. Many people know that a successful strategy puts a lot of different factors into consideration and uses these factors to make adjustments. Every successful entrepreneur will tell you that there are four things that play a part in the development of any successful business strategy, while looking at the 4 major areas of the business (Management/Operations, Marketing/Sales, Financial and Leadership (Personal/Personnel):
1) Strengths – You must always consider the various strengths that your business has. These strengths should be present within both you and the business. Knowing your strengths enables you to use them in order to achieve the desired goal. It is clear that every business has strengths which it could use to gain advantages over the competition. These strengths could range from having more resources to having more experience. Your strategy must utilize the strengths to the maximum to insure greater success.
2) Weaknesses – Just as every business has strengths, every business also has its weaknesses. As you plan your strategies, you need to take these weaknesses into account in order to overcome them. Be realistic regarding weaknesses in order to truly be effective. These are factors that are under your control, but for a variety of reasons, are in need of improvement to effectively accomplish your objectives. Being aware of the weaknesses, you will be able to address specific ways of overcoming them.
3) Opportunities – In any business environment smart business owners have always taken advantage of every available opportunity for advancement. What opportunities exist in your market, or in the environment, from which you hope to benefit? These opportunities reflect the potential you can realize through implementing your strategies. Opportunities may be the result of market growth, lifestyle changes, resolution of problems associated with current situations, positive market perceptions about your business, or the ability to offer greater value that will create a demand for your services. If it is relevant, place timeframes around the opportunities. Do they represent ongoing opportunity, or are they a window of opportunity? How critical is your timing?
Be alert to the fact that these opportunities are often shrouded and you need to keep a keen eye and a good sense to take advantage of them. In taking advantage of opportunities, however, you must not lose sight of your main goals through which you can measure success.
4) Threats – Since the market contains opportunities for the business, it should also be mentioned that it does contain threats. As a business owner you should be aware of any potential threat that could place the business itself, at risk.
These are also external – you have no control over them, but you may benefit by having contingency plans to address them if they should occur.
A threat is a challenge created by an unfavorable trend or development that may lead to deteriorating revenues or profits. Competition – existing or potential – is always a threat. Other threats may include intolerable price increases by suppliers, governmental regulation, economic downturns, devastating social media or press coverage, a shift in consumer behavior that reduces your sales, or the introduction of technology that may make your products, equipment, or services obsolete. Get your worst fears on the table. Some of these threats may be speculative in nature, but you need to recognize them to add value to your incoming year’s strategy.
Having a clear handle on the strengths, weaknesses, opportunities and threats in your business will position you to develop the strategies you need to meet the challenges of the 2012 marketplace. Next time we will look at how to develop and execute your strategies.