Identifying Weak Areas of Your Business

No business is perfect, and the best companies strive continuously to improve the products and services which they offer to their customers. A failure to deal with weaknesses in your business model will eventually lead to stagnation and even crisis, and yet many business owners have no idea where to start the improvement journey.

Any identification of weaknesses should be undertaken as part of a holistic process, which also identifies your strengths and the state of the surrounding environment. The most obvious tool to use when doing this is the SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis. Detailed instructions on how best to undertake a SWOT analysis can be found on many Internet sites, but the basics are simple. You must brainstorm all the internal and external factors which seem to be holding you back, as well as those which are helping you towards your goals. Most weaknesses will fall into the areas of finance (insufficient cashflow, outdated assets etc) or management (poor office organisation, insufficiently skilled staff being hired etc). Do not focus on one to the exclusion of the other, as there is clearly no point in fixing your cashflow if your staff cannot handle the extra work, and vice versa!

When conducting a SWOT analysis for a company, it is most helpful to view a ‘weakness’ as an aspect of your business in which your competitors have an advantage over you. Viewing the analysis in terms of how you measure up to your competitors will focus your thinking and give you a benchmark to aim for. While there are some internal elements for which such a comparison may be difficult, many of the external aspects can easily be benchmarked in this way. All you need do is send a few ‘secret shoppers’ to order from your competitors, and make sure that they order from you, too. Ask them for a comprehensive report on every stage of their interactions. It will soon become obvious if your competitor has an advantage over you in a particular area, or if you need to maintain a particular strength which makes you a market leader.

As you undertake your SWOT analysis, you may also want to situate your understanding within the wider environment. To do this, a PEST analysis is helpful. Again, instructions as to how to use this tool are available elsewhere, but it essentially consists of an overview of your market. You must analyse political/legal changes, economic factors, social factors and technological factors, leading to a broad understanding of the environment in which your business is operating. Such an overview will enable you to take a long-term view of your business. It may be, for example, that what seems like a weakness (an unpopular style of clothing being sold) may turn out to be a long-term strength (a major designer focusing on that style in their new advertising campaign). Whatever the case, if you regularly probe your business for areas of weakness, you will be streets ahead of the competition.

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