SWOT Analysis

Are you considering a new product or service? Have you been thinking of expanding into new markets? Are you hoping to grow your business? Whatever your objective may be, a SWOT (Strengths Weaknesses Opportunities Threats) analysis can validate whether your goal is achievable and help you to determine the steps needed to achieve the goal. Discover how to a method and the benefits of making a SWOT analysis in my summer newsletter.

How do your customers regard your company?

As a business owner you view your company through rose-colored glasses and probably do not see the scratches and dents in your organization that might turn off potential or existing customers. Leamon Crooms III, of Gurus of Growth, suggests meeting with your 10 least satisfied customers and listen to them and take notes as they tell you what’s broken, what needs to be fixed, and for what they are willing to pay a premium. This can be a tough (for you) exercise, but if you will act on what you learn you can make vast improvements to your business. Leamon also suggests, that for balance, you also meet with 10 of your most satisfied customers three months later. Why later? So you don’t fall back into old habits. Repeat the interviews yearly and notice patterns of improvement.

Will Limkemann
www.siqualtd.com

Suze Ormond and Business

During the Larry King interview last night with Suze Ormond, a business owner called in asking when she should close her business. It turns out that the business has no debt and pays vendors in cash, but has no reserves.

Suze’s rather incredible advice was that rather than take on any debt to pay operating expenses, she should close the business. If this woman and every other business person watching this show takes Suze’s advice literally there will be thousands, if not millions, of additional unemployed people next week. The caller’s business was in much better shape than most small businesses which have rivers of debt.

What Suze did not explore with the caller was what untapped sources of income were available, or whether there were costs that could be cut. With no current debt, this woman is in an enviable position to make sure costs are at a minimum and that she can laser focus into new market opportunities. How many business owners would love to be in her position?

Suze is right that consumers should cut back on debt. But she did not acknowledge the potential leveraging effect that taking on some debt can have in growing a business.

I would have explored with the caller what untapped potential her business might have. Can she raise prices? Can she upsell existing customers? Can she use low-cost marketing to attract new customers? Can she modify services or products to appeal to a broader market? Are there areas in which she can cut costs? I would then advise her on how she could use the untapped potential to grow the business and improve her cash position. With her enviable cash position she might be able to make significant improvements from cash flow. If not, then it would be prudent to do an analysis to determine whether a loan or line of credit would be a sound business decision.

What is your growth potential, and how do you plan to exploit it? How can you improve your cash-flow?