When your business starts to make money, the next challenge would be how to sustain this revenue generating activity. Should you push for expansion and invest in more equipment, hire new people or put up a new branch or installation somewhere? Sometimes, knowing what to do and when to do it spells the difference between a good businessman and a great one.
The core of every plan to move forward is knowing your company's current status. If you have extra cash, you can perhaps hire a management consultant, but if you want to sharpen your business acumen, you can opt to do it yourself. It's really simple and you just have to employ a technique called SWOT analysis. SWOT is an acronym that stands for the following terms:
- Strengths. Strengths of course refer to the things that your company does well or any particular areas wherein your work force, skill set or assets are relatively in solid ground. The entries under this category are bankable enough to be the basis or thrust of your future plans to expand or upscale operations.
- Weaknesses. You really have to be true to yourself when you're thinking of this information. This would give you an idea of your problem areas as well as the things that would need the most improvement. If you're going to do some improvements in your business, you might want to highlight these under this category.
- Opportunity. Here's where the maven in you comes into the picture. You have to scope out certain market conditions at present as well new logistical circumstances that offer your company greater advantage in your market. From these opportunities, you can then plan out your next move.
- Threats. This is where you truly see the big picture. Threats embody the totality of all the things that could be bad for business. It could be anything from the general state of the economy, the rising cost of production due to inflation, competition from other similar companies or unrest within your workforce. Seeing these things before they happen makes you more likely to formulate contingency plans.
Once you have your SWOT analysis down pat, you have to align this with your vision for your company. Your short-term and long-term plan for your company should depend on your deep understanding of the strengths, weaknesses, opportunities and threats related to your business.
Answer these questions if you want to get a better handle on things:
- How do you see your company in five years time? What changes do you wish to see in terms of growth and expansion? How about ten years?
- Do you know your other plans of action regarding expansion? Do you have alternative strategies for addressing the quirks of the market?
- Are you open to building potentially advantageous partnerships and consortiums with other companies to reach your common goal?
Sometimes, knowing what's good for your business is all about knowing yourself and your company as well as figuring how many risks you want to take along the way.