In many ways an entrepreneur is not unlike that of the gymnast. The act of balance is critical to the performance of each individual. The gymnast needs to counteract the forces of weight and motion; while the entrepreneur needs to distribute their time and resources between risk and reward. Without the ability to adequately balance the elements of weight, motion, time, and resources the entrepreneur and the gymnast would be hard-pressed to succeed in their particular endeavors.
The entrepreneur needs to seize opportunities and to minimize risk. To accomplish these tasks the entrepreneur must clearly specify the objective of his/her business venture or project. And identify the internal and external factors that are favorable and unfavorable to achieve that objective.
An effective tool to assess and identify opportunities and risks is a SWOT analysis. SWOT analysis is a strategic planning tool used to evaluate the strengths, weaknesses, opportunities, and threats involved in a business venture or project. If a clear objective has been identified, SWOT analysis can be used to help in the pursuit of the objective.
SWOT is an acronym for Strengths, Weaknesses, Opportunities, and Threats. It’s an assessment technique that paints a vivid picture of how your business stacks up when you consider these four factors. SWOT is a simple, popular way to gather and use information in preparing or amending your business plan. It’s also useful in solving problems, making decisions, and educating staff when change is necessary.
In brief, SWOT means identifying:
- Strengths—internal factors such as expertise, innovation, and resources.
- Weaknesses—internal factors such as a high level of debt, labor shortage, etc.
- Opportunities—external advantages such as a rapidly growing market where demand outstrips supply.
- Threats—potential external risks such as competitors undercutting your pricing, natural disasters, changes in the general business environment.
Businesses review their financial performance at different times of the year: monthly, quarterly, and annually. These reviews typically focus solely on the numbers. Though the financial performance is the barometer of accomplishment in business, performing a little self-examination at this point in time can pay lasting dividends.
As an entrepreneur, the shortest distance between you and your dreams is your ability to set and accomplish objectives in a timely fashion. An action plan can help you stay organized, coordinate your activities, and keep your projects on schedule.
The action plan specifically outlines the steps or tasks that are necessary to achieve objectives. It includes a schedule with deadlines for significant actions, resources necessary to achieve objectives, and methods to measure these objectives. Preparing action plans addresses potential problem areas, considers the cross-functional impact of the actions, and ultimately increases productivity.
Creating a strategic business plan is a great first step. However, if your business plan gathers dust on a shelf, its value is lost. This is where the action plan comes in. It’s the place where the rubber meets the road—the catalyst that transforms your business plan into actionable results.
Your action plan sets priorities and describes the specifics of implementing your business plan. The key components of your action plan are long-term and short-term objectives. Define your long-term objectives and then set short-term objectives—baby steps—that break the larger goal down into easy-to-achieve chunks. Review these mini-goals every three to six months, and keep checking to see if you’re meeting your objectives.
Use your action plan to define how you’ll operate your business on a day-to-day basis. Address issues such as how and when you’ll manage research and development, hire employees, serve customers, market your offering, publicize your company, and work with partners and vendors.
Success sometimes hinges on elegant simplicity. Many times, when companies expand as a result of rapid, unplanned growth rather than a carefully orchestrated plan, complex inefficient operations result. Organizations find themselves with staff, resource, and equipment redundancies, lack of formal systems, duplicated efforts, and no clear line of sight to the strategy driving the business.
There are three key processes in operating a small business—management, strategy and operations—all of which are tightly integrated. The management process provides a framework for hiring, training, and managing people to produce results. The strategic process defines your short-term, as well as, your long-term goals---where you want to take your business (earnings, sales, and revenues) and how you will get there. The operational process provides the roadmap, tools, and resources for getting there.
Effective business processes depend on standardization--- setting standards of how things should be done and formalizing processes for getting things done to meet those standards. With basic systems in place, jobs, tasks, and decisions are easily performed rather than becoming confusing challenges.
One of the most common causes of business failure is the lack of standardized systems. Fly-by-the-seat-of-your-pants management generates chaos and inconsistency. However, if you create basic systems and processes for performing day-to-day tasks that can be easily replicated, then you are well on your way to building a business that produces consistent results.
One of the greatest entrepreneurial success stories is that of McDonald’s, a complex, well-run business system that is operated by ordinary employees who serve over 45 million people every day. Its founder, Ray Kroc, didn’t invent the McDonald's concept, but he did revolutionize the food service industry through automation, attention to detail, exceptional efficiency, and the highest standards of safety and cleanliness.
Your role as entrepreneur can be a lonely one. Although you may be surrounded by a good staff, it would not be uncommon for you, at times, to experience a feeling "isolation." It's normal during these periods of isolation to wish that you had an individual with whom you could brainstorm new ideas and/or strategies.
Too often, you, as the budding business owner, may be reluctant to share problems with your employees because you do not want to cause them undue concern or worry. Or, since you yourself, perhaps, are not necessarily confident in your own solution to a particular problem, you may have a tendency, therefore, not to communicate with your employees openly about the problem. It is also easy to become entrenched in a situation where you may not “see the forest for the trees,” thus making it difficult to think of solutions or innovative ideas.
There are many business challenges you, the entrepreneurial business owner, can handle on your own. However, with the daily distractions of owning and managing your business, putting out fires, and dealing with the crises, many times the challenges seem overwhelming.
As a business owner, one of your responsibilities is stimulating creative thinking among your staff to ensure the continued development of fresh perspectives and strategies for achieving short-and long-term goals. People are your organization’s most important resource. But like any resource, it is only useful if you can tap into it and put it to good use. How much effort do you really put into encouraging your people to come up with ideas and to follow them through to a successful implementation?
You need to make the best use of your people and harness their natural creativity and genius. Your people need to focus the power of their brain and apply the knowledge, expertise, and experience they have to address the challenges the face. .
Unfortunately, this situation just doesn’t happen as often as we would like. It may seem contradictory but, people need a structure or process to follow in order to help them be more creative as well as productive. Such an approach is brainstorming.
Brainstorming sessions are a proven group approach to generate ideas relating to a specific subject matter by allowing the participants to voice their ideas, no matter how strange, weird, far-fetched, or impossible they may seem. This process generates a large number of ideas in a short period of time and allows you to whittle down the ideas that warrant further analysis and possibly implementation.