Assessing Your Small Business: A Key To Sustainable Growth
Feb 09, 2022·
4 min read
Why did you start your business? Did you want to turn your passion or skill into profit? Did you identify a problem in society you wanted to solve? No matter what your answer is, it likely ties back to one thing: growth. Across the African continent, millions of entrepreneurs like you are investing in their dreams by starting businesses, in the hope that these businesses will build a pathway to growth, not just for themselves, but for society. But what does growth look like and how can you create a sustainable pathway towards it for your business?
Conducting a business assessment is a great way to paint a big picture of what growth looks like for your business and how you can achieve it. In simple terms, a business assessment is a thorough health check-up for your business that provides you with concise analysis of your current reality and opportunities for growth. Periodic assessments provide you with a clear direction for your business and enable you to consistently make informed decisions that will benefit your business.
There are several ways to conduct a business assessment, the most popular of which are SWOT (Strength, Weakness, Opportunities, Threats) analyses and GPCT (Goals, Plans, Challenges, Timeline) analyses. In this article, we share how to conduct a simple yet thorough SWOT analysis for your business.
Before conducting your SWOT analysis, it is important for you to set your business goals. As a business owner, having goals is crucial to building a strategy for success. Your goals inform your business plan(s) and this, in turn, enables you to create a specific action plan to take your business to the next level. While setting goals for your business might seem overwhelming at a broad glance, you can navigate it easily by setting annual goals and breaking them down into monthly goals that will ultimately help you achieve your annual targets. It also helps to segment your goals into categories like revenue, reach and any other categories you consider necessary. Remember to set goals that are Specific, Measurable, Achievable, Realistic and Timebound. Your goals should be set 3 to 6 months before you conduct your analysis as they will serve as a key benchmark to measure your performance.
As mentioned earlier, SWOT is an acronym for Strengths, Weaknesses, Opportunities and Threats. A SWOT analysis provides a comprehensive assessment of your business’ current realities.
Strength represent the things you are currently good at. These include your Unique Selling Proposition, the advantages you have over your competitors and any other things you can capitalize on to grow. When it comes to assessing your strengths, be sure not to leave anything out, even the things you may consider to be unimportant like employee punctuality or a good working space. Everything positive counts.
Weaknesses are the things you need to improve on. Do your customers have complaints about particular products or services? What are your personal shortcomings as a business owner and how do they reflect on how you run your business? Are your processes bureaucratic? To assess your weaknesses, you have to be brutally honest with yourself and leave no stone unturned. A key way to differentiate weaknesses from threats is that, while they are not as drastic as threats, weaknesses may be detrimental to your business for a longer timeframe than threats.
Opportunities are the things you can take advantage of to grow presently or in the near future. Are changes in technology, customer needs and trends presenting a unique avenue to diversify your offerings? Do you have opportunities for collaborations? Is there a new audience sector you are positioned to reach? It is important to note that opportunities are not things you would simply like to do but rather things that are within your purview as at the time of your assessment.
Threats are immediate dangers to your business viability that you need to neutralize as quickly as possible. Is there a new competitor that is reducing your market share? Are your suppliers or logistics services becoming increasingly unreliable? Again, these should be things that are within immediate or near-future occurrence. Many times, threats go beyond just your business to your entire industry, so a good way to have an eye out for them is to keep up with relevant industry publications.
To be holistically effective, SWOT analysis must be conducted periodically. Remember that the analysis itself is not a strategy, but merely a reference point you can use to create an action plan for implementation. Click here to access our customisable SWOT analysis template and take one step closer to building the business of your dreams.