In What Areas Do Your Company's Strengths, Weaknesses, Opportunities & Threats (SWOTs) Lie?9/29/2017 A clear understanding of strengths, weaknesses, opportunities or threats (SWOTs) is essential to capitalize on new directions or new opportunities when they present themselves. It will also signify your company’s ability to compete in whatever environment it exists. Not even Fortune 500 companies function perfectly at all times. And as a small business owner, you are not expected to be any different.
Using the key results areas prepared by each manager or key person, identify each SWOT. You will want to discuss the impact on the following in each item listed as they relate to:
Excerpted from, "The Start of Something BIG: Your Ultimate Guide to Writing a Dynamic Business Plan."
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KRAs are defined as highly-selected areas of a manager’s or key person’s job where results must be achieved to be most successful. These areas include, but are not limited to, operations, marketing, human resources, capital resources and profitability. This activity is intended to assist each manager in directing his individual resources that will contribute to the overall success of the company.
Perform an analysis of the key areas of your company to determine where success needs to be achieved and whether success is being achieved by responding, in detail, to the following:
Excerpted from, "The Start of Something BIG: Your Ultimate Guide to Writing a Dynamic Business Plan." Pricing objectives and policies must be established and guided by your company objectives. Your objectives and policies should explain:
The simplest pricing method is often based on cost plus a desired mark-up. This is a pricing model that most accountants prefer. The mark-up is expressed as a percentage of the selling price added to the cost. Sometimes mark-ups are a determined standard set by middlemen in a channel by industry. Whatever pricing method you use, carefully consider what the market will bear. Be sure not to underprice your product/service because that is definitely the formula for going out of business. A good profit margin is somewhere between 40% and 50%. It’s not necessary to compete on price if you’re offering more value for the going rate. Once you’ve established prices for each product/service, you will need to perform a breakeven analysis. This analysis will provide you with sales objectives expressed in dollars or units of production at which your business will break even. This is the point at which your business is neither making a profit nor losing money. The breakeven point can be calculated for a one-product/service company or a multi-product/service company. This critical information gives you a definite target you can plan to reach. Excepted from, "The Start of Something BIG: Your Ultimate Guide to Writing a Dynamic Business Plan." Changes in every industry occur frequently. In the technology space, for example, changes seem to occur every second. Make learning your industry and keeping abreast of the changes a priority by either working in a similar business, hiring, consulting or partnering with an expert.
When researching your industry, seek to learn the following: 1. History and background of the industry (i.e., when and where did industry begin). 2. How has the industry changed or grown in the past three years? 3. Describe the environment the company functions within (e.g., technology, economic, political, legal, social, cultural). 4. What factors contributed to those changes (e.g., economics, technology, market conditions, government, competition, etc.)? 5. What are the current industry trends. 6. How large is the market currently? 7. Is the market in a growth or decline mode? 8. What profit margin is the standard for your industry? Excerpted from, "The Start of Something BIG: Your Ultimate Guide to Writing a Dynamic Business Plan." Government agencies and private corporations have supplier development initiatives to assist their suppliers in growing and developing their businesses. The benefits are two-fold. Once an agency or corporation establishes a relationship with a supplier, the supplier essentially becomes an integral part of the agency’s or corporation’s operation. The development that takes place is designed to provide the agency or corporation with the reliability and cooperation from the supplier that enables the two entities to maintain a long-term, productive and profitable relationship.
Corporations institute supplier development initiatives to assist current and potential suppliers in identifying and developing business opportunities with their companies. This development process helps in the growth and expansion of a supplier, and is implemented in one of three ways:
The most notable supplier development initiative in the private sector is supplier diversity. Either by government or corporate mandate, corporations institute supplier diversity initiatives to promote the integration and retention of certified minority, women and service disabled veteran business enterprises (S/D/M/W/V/DVBEs) in corporate-wide contracting and procurement. These firms are provided a vehicle to expand their present capacity, and for less experienced ones, the training and assistance needed to grow. Supplier diversity initiatives have served to increase the competitive advantage of corporations in the marketplace. It’s believed that diverse firms provide innovative business solutions, improve bidding advantages, as well as promote an increased diverse customer base. Corporations actively seek to integrate their supply chain to reflect the markets they serve through the development and implementation of a supplier diversity program. If you are certified as a woman, minority, disabled veteran or small business enterprise, you are eligible to participate in a corporate supplier diversity program. Visit the web site of the corporation you’re interested in developing a business relationship. Search for the supplier diversity, corporate sourcing, purchasing, emerging business office (or the like) for more information. Excerpted from, "The Start of Something BIG: Your Ultimate Guide to Writing a Dynamic Business Plan." Mentor-Protégé programs are designed to enhance the capabilities and improve the abilities of small businesses to successfully compete for and receive public and private contracts. The benefits of participating in a mentor-protégé program may include, but is not limited, to:
Program eligibility and criteria vary by organization. But in most instances, participants receive management and technical contract assistance, financial aid and subcontract support. Requirements of mentors and protégés include: Mentor
Protégé
As with any other business relationship, a mentor-protégé relationship begins with a written agreement. The agreement is intended to specify the responsibility of the mentor and protégé, as well as, provide a mechanism for monitoring the overall relationship. The most critical aspect of forming a mentor-protégé relationship is that roles are specifically understood by both parties and the relationship does not turn in to one where the protégé becomes an “employee” of the mentor. The agreement must include:
Federal government agencies such as the Small Business Administration, Department of Defense, Department of Transportation and Department of Treasury all have mentor-protégé programs. Even your local SCORE office can arrange a mentor your business. Excerpted from, "The Start of Something BIG: Your Ultimate Guide to Writing a Dynamic Business Plan." Whether your customer exists in the public sector, private sector, not-for-profit, internationally or some combination thereof, the key to success is building strong business relationships. Once you’ve targeted your prospective customer you must learn as much about them as you can. The more you know, the better you will be able to determine which of your products or services best meet their specific needs, provides them with solutions, while at the same time, making a profit.
Some of the most helpful sources of information about any company are their annual report, website, news articles, television news and commercials, printed ads (including outdoor), etc. However, companies such as Hoover’s and the Library of Congress Business Reference Services provide information on companies. From these sources, and others, you will need to ascertain:
What every organization or corporation seeks in building a partnership with any supplier is to develop a long-term, mutually-beneficial relationship that would give them a competitive advantage. Potential suppliers and partners must be capable of providing quality products and services that bring value to include:
Excerpted from, "The Start of Something BIG: Your Ultimate Guide to Writing a Dynamic Business Plan." Successful borrowing is more than just seeking financing. In fact, borrowing money is much like a science and requires a significant amount of planning. Those who lack experience and knowledge of what financing entails will ultimately find themselves in a situation much worse than they would have by not obtaining financing at all.
The ability to secure financing when you need it is as critical to the operation of your business as a good location, the right equipment, reliable sources of materials and supplies and an adequate labor force. When seeking financing to start a business, acquire a business or expand your current operation, you will need to decide:
In order to realistically answer these questions, you will need to make an assessment of your current business situation. This is done by writing a business plan or reviewing every aspect of your current one. Both the financial and marketing sections of your business plan can provide you with projections and assumptions that will support your funding needs. Excerpted from, "The Start of Something BIG: Your Ultimate Guide to Writing a Dynamic Business Plan." A strategic alliance is defined as a partnership between two or more companies. This form of business has become a more viable, cost effective and efficient way to meet internal growth objectives. More and more companies are relying on strategic alliances as opposed to mergers or acquisitions. The purpose of forming an alliance includes, but is not limited, to:
While this form of business growth has been proven successful in many instances, implementation doesn’t come without difficulties. Research and planning are key critical elements that can mitigate problems that may arise. But to achieve success, you must begin by:
Excerpted from, "The Start of Something BIG: Your Ultimate Guide to Writing a Dynamic Business Plan." Before moving into any market, the first step is to research it thoroughly. An infinite amount of market information exists on every kind of business, industry, product, service, etc. to assist you in the development, growth or expansion of your business and help you compete. Demographic and geographic information can aid you in locating your customer, understanding buying habits and identifying your competitors. These resources include:
Excerpted from, "The Start of Something BIG: Your Ultimate Guide to Writing a Dynamic Business Plan." |
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Kimberly L. Johnson is an author and business development professional specializing in business start-up and business development. Archives
May 2018
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