When you started your business, you probably devised a marketing plan as part of your overall…
When you started your business, you probably devised a marketing plan as part of your overall business plan. This would have defined the market in which you intended to sell and targeted the nature and geographical distribution of your customers.
From that strategy you would have been able to produce a marketing plan to help you meet your objectives. When you’re reviewing your business’ performance, you’ll need to assess your customer base and market positioning as a key part of the process. You should update your marketing plan at least as often as your business plan.
Revisiting your markets
A business review offers you the opportunity to stand back from the activity outlined in your plan and look again at factors such as:
- changes in your market
- new and emerging services
- changes in your customers’ needs
- external factors such as the economy, imports and new technology
- changes in competitive activity
Asking your customers for feedback on your business’ performance will help to identify where improvements can be made to your products or services, your staffing levels or your business procedures.
At the same time, it is important to remember that while reviews of this kind can be very effective – they can give your business the flexibility it needs to beat off stiff competition at short notice – it is important to think through the implications of any changes. In the new phase of your business you’ll need to plan your finances and resourcing carefully at all times.
USE YOUR REVIEW TO REDEFINE YOUR BUSINESS GOALS
To remain successful it’s vital that you regularly set time aside to ask the following key strategic questions:
- Where is the business now?
- Where is it going?
- How is it going to get there?
Often businesses are able to work out where they want to go but don’t draw up a roadmap of how to get there. If this happens, a business will lack the direction needed to turn even carefully laid plans into reality.
At the end of any review process, therefore, it’s vital that work plans are prepared to put the new ideas into place and that a timetable is set. Regularly reviewing how the new plan is working and allowing for any teething problems or necessary adjustments is important too. Today’s business environment is exceptionally dynamic and it is likely that you will need regular reviews, updates and revisions to your business plan in order to maintain business success.
Continuous improvement
In addition, a simple planning cycle can greatly enhance your ability to make changes in your business routine if necessary. Good planning helps you anticipate problems and adapt to change more easily.
Expert input
You may find at this stage in your business’ development that you need external skills to help you with the changes you have to make. In this case you might consider:
- employing skilled consultants in areas where you cannot afford to develop inhouse skills
- appointing an experienced non-executive director who can provide a regular, impartial assessment of what you are doing
- using a management consultant to help you identify how you can strengthen or change your management structure to grow the business
MODELS FOR YOUR STRATEGIC ANALYSIS
There are a number of useful business-analysis models that may help you think more strategically about your business.
The SWOT analysis (strengths, weaknesses, opportunities, threats) is one of the most popular. This involves looking at the strengths and weaknesses of your business’ capabilities, and any opportunities and threats to your business. Once you’ve identified all of these, you can assess how to capitalise on your strengths, minimise the effects of your weaknesses, make the most of any opportunities and reduce the impact of any threats.
Opportunities and threats in the external environment
It’s important to remember that opportunities can also be threats – for example, new markets could be dominated by competitors, undermining your position. Equally, threats can also be opportunities -for example, a competitor growing quickly and opening a new market for your product or service could mean that your market expands too.
A SWOT analysis can provide a clear basis for examining your business performance and prospects. It can be used as part of a regular review process or in preparation for raising finance or bringing in consultants for a review.
Once you have collected information on your organisation’s internal strengths and weaknesses, and external opportunities and threats, enter this data into a simple table.
| Positive | Negative | |
|---|---|---|
| Internal | Strengths | Weaknesses |
| External | Opportunities | Threats |
Other tools include:
STEEPLE analysis – a technique for understanding the various external influences on a business – Social, Technological, Economic, Environmental, Political, Legal and Ethical.
Scenario planning – a technique that builds various plausible views of possible futures for a business.
Critical success factor analysis – a technique to identify the areas in which a business must succeed in order to achieve its objectives.
The Five Forces – the theory that there are five defined factors that influence the development of markets and businesses – potential entrants, existing competitors, buyers, suppliers and alternative products/services. Using this model you build a strategy to keep ahead of these influences.
BREAKING DOWN YOUR STRATEGIC REVIEW
As owner-manager of your business or as a member of its management team, you should stand back once in a while and review your business’ performance.
The areas you need to look at are:
- Your market performance and direction – how well you are performing through your sales results, which markets to aim for next and how to improve your performance.
- Your products and services – how long your existing products will meet your customers’ needs and any plans for renewal.
- Operational matters – your premises, your methods, technologies used, your processes, IT and quality. Are there any internal issues that are holding your business back?
- Financial matters – how your business is financed, levels of retained profit, the sales income generated and your cash flow.
- Your organisation and your people – your structures, people planning issues, training and development.
Next steps
The five steps above will give you a clear indication of any issues that you need to address quickly in order to maintain your business in its early stages.
If you feel all of the areas above are strong, you can start to plan for the next phase and build a cohesive strategy to develop your business. However, if there are areas that need attention, deal with them now so that you can move forward. There are a variety of growth options for every business – it’s important that you settle on the right one for you.
Also, once you’ve isolated your best route for developing your business, you can boost your chances of success by planning it carefully and monitoring your progress against an updated business plan.
Original document, Review your business performance, © Crown copyright 2009
Source: Business Link UK (now GOV.UK/Business)
Adapted for Québec by Info entrepreneurs
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