It can be staggering to think that as many as eight in 10 small businesses will not succeed within their first 18 months of operation. When people start businesses, the last thing they want to think about is failure and financial ruin. The beginning can be an exciting time when you instinctively want to focus on the potential success rather than the potential collapse. You’ve got enough startup capital, a solid marketing strategy, and a talented team ready to make your dream come true. So what could go wrong?
Don’t just acknowledge the potential problem. Attack it.
A common reason that businesses don’t succeed within the first 18 months of existence is bad planning. Addressing potential failure is a strategy that can both prevent your project from ending quickly and be a model for greater successes in the future. So what does it take to be successful in planning? Your business plan makes sense, so what could you be missing?
Acknowledging the possible ways that the project could fail is not enough. Adopting simple business analysis methods can be the X factor that your small business needs to succeed. What makes the business analysis method so successful is how you think about them rather than the methods themselves. For example, instead of thinking about planning as a single event, consider it to be an ongoing process that requires just as much attention as every other facet of your business.
One of the best ways a small business can position itself for success is to constantly assess its needs. This includes adopting simple tools, such as SWOT analysis, summative evaluation, and formative evaluation. These tools prompt you and your team to ask yourselves if what you’re doing makes sense and if it’s beneficial. Answering those questions could save your business time, money, and labor.
A SWOT Analysis, or SWOT matrix, is used to evaluate the Strengths, Weaknesses, Opportunities and Threats of your business. It’s a simple tool you can use to evaluate anything from your business goals to the core of your processes with your clients.
The summative method of evaluation can provide an analysis of whether not a project has met its goal, how to improve on that goal, and unintended consequences. This is typically performed at the end of a project so the focus can be on the outcome rather than the methods.
The formative method is much more open and is intended to help understand, improve, and clarify the need for the project from beginning to end. This is typically performed during project development so the focus can be on the methods and the process itself.
While this may seem somewhat arbitrary, this process can manage your professional liability as well as expose areas that require improvement -- especially from a customer perspective. But do you really need to document every part of every workflow that you have? According to Julia Book, veteran business analyst for the University of Kansas Medical Center, absolutely.
"You don’t ‘have’ to do anything you don’t want to, the problem is that you will probably wish you had later," Book said. "This could be for any number of reasons, but one of the first that pops to mind is understanding what works and what doesn’t. Going through this exercise will force you and your team to acknowledge the choices you have and the choices you are making in that workflow, which then highlights all of your options to do things differently if this flow doesn’t work. If you don’t do this, you may not see other options later and instead feel as if there is no other way for the workflow to proceed, when in reality you are not in that box you think you are in. Workflows are designed to be iterated on and made more efficient with a somewhat regular frequency."
Changing the way you think about business planning can give you the advantage over your competition. Your peace of mind and your dream depends on it.