How to Identify the Strengths and Weaknesses of Your Business
Every business has areas in which they excel, and areas where they are not quite up to par. And even in the most successful businesses, there are always opportunities for improvement. Identifying the strengths and weaknesses of a business is a good thing for owners and stakeholders to do on a regular basis (at least once a year), so they can look at ways to leverage their strengths; and on the flipside, uncover issues that need to be addressed.
While performing your end of the year or beginning of the New Year business health checkup, here are some important steps to take to identify the strengths and weaknesses of your business:
Perform a Review of Your Work Processes: Work processes are extremely important to the functionality of a business. While you and your employees are the ones who make the business run smoothly and you should recognize people who perform exceptional work, no single person should be irreplaceable (including yourself). When the right processes have been established and put into place, your business is set up for long-term success.
Invest some time into reviewing your processes and workflow. Look at how your employees communicate, work and collaborate together, and how these processes ultimately serve your clients/customers. Which areas are running smoothly? Which areas could use some tweaking or perhaps overhauling?
Examine your Sales and Marketing Strategies: There are two important qualities that help make a business grow and prosper: great customer service and an effective marketing strategy that brings in a steady flow of new business. How is the performance of your sales and marketing strategy? What is your average customer/client acquisition cost? Are you satisfied with the ROI your marketing strategies are generating?
Do a top to bottom review of your sales and marketing processes and identify what is working and what is not. And if you are not sure how to separate the two, consider bringing in some outside help. It is very important that you cut out the dead weight in your marketing budget, so you can dedicate more resources to the strategies that are most effective.
Solicit Honest Feedback from Your Employees: A business may have weaknesses that the employees are well aware of, but the owner has no idea about. On the other hand, there may also be hidden strengths that the owner does not know about, strengths that could be turned into opportunities to increase revenue.
The employees are the ones who have the most first-hand knowledge about how the business is operating, and they are in the best position to know what is working well and what needs to be improved. Ask for feedback from your employees on this topic, and in order to get the most honest answers, you may want to have them submit their feedback anonymously.
Obtain Feedback from Customers/Clients: Customers and clients may not know the inner workings of your business like your employees do, but they know first-hand the end results they are producing. You can search through online reviews to get an idea of what your customers/clients think, but you might also want to solicit their feedback directly in the form of a survey. In order to incentivize their participation in the survey, offer them a gift card or discount on their next purchase.
Listen and Observe what is Happening in Your Business: You might be familiar with the TV program Undercover Boss in which owners disguise themselves and work for a few days as employees to see what’s really going on in their company. Your business might not be big enough for you to go undercover, but you can at least make a more concerted effort to observe what is going on with your operations. Gaining a closeup view will help you better understand what your business is good at and what you need to work on during the coming year.
Considering Selling your Business in the New Year? Contact a Local Business Intermediary: Identifying your strengths and weaknesses will not only help you optimize your operations; it will also put your business in the best possible position if you are looking to sell. If you are thinking of selling your business this year, it is best to speak with an experienced business intermediary to help you prepare. Intermediaries handle the purchase of businesses day in and day out, and they can work closely with you to help ensure a smooth transaction from start to finish.