How do you assess your business and what do you do with that information? Do you update your business plan only when there is a crisis? How do you develop and implement business strategies? If you have advice to share to help other business women struggling to keep their own businesses going please share your tips, advice, anecdotes, and resources.
How to Assess Your Business
The most important rule when assessing your business is to completely separate the business from yourself. A business assessment should look at the strengths and weaknesses of your business - not your own or that of your partners and employees (those assessments should be done independently of a business assessment).
A more personal assessment on how your business decisions will affect you and your family (i.e., whether or not to stay in business or to make personal financial sacrifices to keep your business afloat during hard times) is an assessment that should only be made after you have determined the viability of your business. To begin your business assessment, make a list that includes three columns:
- The Positives: List successes and things that are working well. This column is your "balance" column. An assessment or list that only contains the negatives is not focusing on the big picture.
- Reality Check: List business goals that have not been met, specific challenges, and setbacks. This is your "reality check" column and should not contain personal statements that begin with "I." You are not looking to reinvent yourself, but ways to improve your business.
- The Assessment: In this column, you will try to identify key reasons for challenges and divide each issue from Column 2 into two main areas: Things you can change; and things you cannot change. For example, if you are trying to sell something consumers simply are not buying, you may not be able to change consumer trends, but you can change your product line.
The chart list below is an example of how one business owner assessed the overall state of her business that is taking a loss (your own assessment should be more detailed). Notice the complete absence of pronouns that make this assessment a personal indictment, but uses words that identify the business challenges, not personal challenges.
Identifying challenges without personal blame allows you to see solutions and assess your business idea based on its own merits. For example, in the chart below we see that a lease that was once affordable is now a cash drain. The problem is not necessarily that the business idea and model are bad, but shows that one decision (the lease) has put a strain on the budget.
Business Assessment Checklist
|Positives: Balance List||My Business Reality Check List||The Assessment|
|The business did well for the first three years, growing from a one-person operation to a company employing 15 workers.||The past year the business has taken a loss; sales have declined and expenses exceeded revenues.||Things that led to business losses: product sales are down, direct and indirect expenses of hiring new employees, moving into bigger office space – the rent is too high now. The economy is horrible!
Cannot Change: The economy or consumer spending habits.
Can Change: Number of expenses. Look at downsizing as a strategy for long-term viability; try to renegotiate the lease or sublease until more suitable space can be found; examine product lines and closely study what products are selling better and why.
A business assessment is balanced and offers both positives and negatives. It should be designed to identify problems clearly to address things that you can change, and evaluate the impact of things you cannot.