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How To Identify New Challenges Facing Your Business
It’s impossible to chart a successful course for your business without understanding the challenges out there. A thorough overview of potential hurdles facing your business can inform a viable strategic plan that will see your business avoiding potential pitfalls and taking advantage of opportunities.
The right strategic planning begins with an assessment of your business and the operating environment. Questions can help with exploring, framing, and exposing issues. As such, they offer an effective prompt to help you focus on specific challenges and better understand them by refining your interpretation.
With this in mind, what are some of the key questions you should be asking yourself to identify your top challenges?
Questions to ask when identifying challenges facing your business
Some of the most important questions to ask about your business include the following:
- How is your business likely to fare in the event of a global recession brought on by the outbreak of the coronavirus COVID-19?
- How have your financials been trending? Are you facing flat or reduced growth? For example, cash flow and lack of funding for growth can cripple even profitable businesses. Getting professional help for day-to-day money management, innovative solutions like invoice factoring, and working with alternative lenders could be some of the
- What inefficiencies exist within your operation? For example, can your systems and processes be redesigned or even outsourced for maximum efficiency?
- Are you making progress on your technological roadmap, or is your forward momentum being held up by some factor(s)? Perhaps your organisation lacks the right IT know-how. Do you need to bring in transformation experts?
The COVID-19 pandemic, for example, has brought about an enormous shock for businesses across all industries. Its impacts could last for months or even years, and your business is probably doing its best to address the short-term consequences as well as long-term implications. Loss of customers, crashing cash flow, and damaged supply chains are some of the immediate impacts.
In the near future, the relevant challenges could be restarting your business, restoring revenue, and bringing employees back. Yet new opportunities are arising for business recovery. For example, governments and authorities have been quick to introduce stimulus policies and funding for businesses. These could represent opportunities for your organisation if you’re eligible.
Along with the impact of COVID-19, additional trends to bear in mind as you consider these questions are the long-term ADAPT trends.
A – Asymmetry refers to increasing income disparity and disruption
D – Disruption by technology is another trend to watch
A – Ageing populations
P – Polarisation of the world order, and
T – Trust – and in particular declining trust – in institutions are the other megatrends that could shape both the challenges and opportunities confronting your business.
How to perform a SWOT analysis
A SWOT analysis can be a powerful tool for reviewing your strategic goals. SWOT analyses allow you to assess your business’:
S – Strengths
W – Weaknesses
O – Opportunities
T – Threats
When you’re assessing the new challenges facing your business, SWOT gives you a comprehensive, macro perspective. This can lay the groundwork for informed business planning and strategic realignment. You might think you already understand your business and the operating environment well, but the SWOT-analysis process can inspire new insights and help you look at things in a new way. The best way to approach the SWOT-analysis process is to gather a group of employees from disparate areas of your business so you can tap into diverse perspectives.
Start by identifying your objective – what you want to get out of the analysis. For example, you might want to do a SWOT analysis to decide whether you should bring a new product to the market.
Second, research your business, industry, and current market conditions, including competitor research.
Third, work out your business’s key strengths and weaknesses. Examples include employees, competitiveness, and intellectual property.
Fourth, determine opportunities for your business. These can include technology tools, changing regulations, and new consumer preferences.
Fifth, list possible threats to your business, such as increased raw material prices, growing competition, and disruptive uncertainties.
Lastly, take a look at the lists you have and reorder items in order of priority. This SWOT grid gives you a big picture view of your business at one glance, and you can use it to ask further questions like how you can leverage your strengths and address your challenges. These questions then inform your future strategies for achieving your business goals. The SWOT analysis gives you a good tool to prioritise what you need to do and understand the best areas to start working on.
Prepare your business effectively for the future
Businesses large and small face constant challenges. In an increasingly uncertain operating environment, the payoff from understanding your business challenges and planning accordingly can be the difference between survival or failure.
Going back to the basics – by asking you and your team the right questions about your business – could shift your perspective and yield deeper, actionable insights about your business and its relationship to the external environment. It can help you act nimbly and thrive in the unlikeliest of times.
It’s also worth remembering you should repeat your SWOT analysis at regular intervals to ensure your business plan stays relevant as you scale up and your business context changes.
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Stuart Reynolds is the founder of Fullstack Advisory, an award-winning accounting firm for businesses leading the future. He is a 3rd generation accountant who specialises in tech companies, crypto and entrepreneurs.