Although being up to your elbows in the daily work of running your business can seem like the only way to succeed, every now and again it’s worth taking a step back to take stock.
Whether it’s mid-year, end-of-season sales time, end of financial year or just a quiet period, it’s always worth conducting a review of your business. The real question is – how should you go about it?
The ‘why’ is easy: to identify the strengths and weaknesses of your business plan as it stands. Plans rarely go entirely as expected, and you need to be prepared to adjust accordingly. Recognize your successes and see if there’s potential to expand on those strategies and admit what isn’t working. Once your analysis is complete, you should be able to see the best way forward.
As to the ‘how’: identifying these wins and losses can be simple or complex depending on the nature of your business, but it usually comes down to picking out which product or service is performing best and understanding why. If you’re not sure why, conduct a customer and market analysis to find out why your clients both want and need it.
Consider using your financial management software and CRM’s built-in tools to collate and summarize your business data. Microsoft Excel is widely used as a data-mapping tool, and Microsoft Visio plays a key role in business process mapping and ERD (entity relationship diagram) creation.
By using these tools to collect, visualize and understand your business processes and data in combination with your financial data, you should clearly be able to understand how you’re tracking against your business plan. If your skills lie elsewhere and interpreting this data is too daunting, it’s worth bringing in a consultant to help. They will also help you develop a strategy for how to move forward or give you detailed financial analysis.
There are numerous techniques that can help you with the strategy process. Some of the best-known and most frequently used methodologies are:
- SWOT analysis – laying out your Strengths, Weaknesses, Opportunities, and Threats in a grid to give you a macro perspective.
- STEEPLE analysis – understanding the various external influences on a business: Social, Technological, Economic, Environmental, Political, Legal, and Ethical.
- Scenario planning – creating possible situations to test whether you have the capacity to overcome them.
Analysis is only half the battle. Once you know what your challenges and opportunities are, you need a plan to deal with them and goals to measure your progress against. Perhaps the most famous goal-setting methodology is the SMART system, which ensures your plans are:
With a measurable, realistic set of goals, your plans are much more likely to become reality, and you can be sure that everyone on the team is on the same page and working towards the same goals.
Although it requires a certain amount of self-awareness to remember to step back and see the larger picture, the rewards make the challenge worthwhile. Good luck!