Steps to Success
Is your business stagnating? How can you tell? The easy answer is to look at your bottom line -- an important indicator but one that may not tell the whole story. Maybe you have recently hired new employees, made capital improvements or invested in new equipment. It takes time for these investments to pay dividends.
Maybe your bottom line looks good because you control costs effectively -- even though your sales have not been growing. Some common reasons why your business could be stagnating are:
- no vision, business plan or strategic plan
- weak or ineffective management or key staff members
- lack of or inadequate systems or processes
- inadequate capital
A time-tested approach to determining why your business isn't performing up to your expectations and what to do about it is the SWOT Analysis. In this exercise you examine the key internal and external characteristics of your business that are either contributing to or hindering your success. Once you have a clear picture of these factors and how they affect your business you can create a plan that takes advantage of your strengths, improves on weak areas, seizes opportunities, and manages threats based on the priority you have assigned to these areas.
Do you need to introduce new products or services or improve on your existing offerings? Do you need additional expertise in the form of new employees or advisors? Are increased costs or aggressive pricing from competitors threatening your profitability? Should you update your image or brand?
You can find numerous resources to help you organize your efforts and outline a strategic plan but at a minimum it should include the following:
- Mission and values statements
- Review of previous strategic plan and results (if available)
- Current SWOT analysis
- Goals, strategies and tactics
A good example of this structure is the recent strategic plan for the University of Illinois. (Look under The Plan.) It includes three sections -- Mission & Vision; Distinction & Principles; and Goals, Initiatives & Metrics. It clearly spells out how the goals in the plan will be achieved and measured.
It's also important to note that you should review your strategic plan and revise it on a regular schedule.
These videos from the SBA Learning Center offer additional information to help you refresh your business.