How Can You Handle Uncertainty in Your Business?

Situation:

As business owners we have many decisions to make on a daily basis. Then we have decisions to make that will have short range and long range impact on our business, employees, families, and profitability. Then, we have external factors in our business that we have no control over that directly impact our ability to accomplish our chosen profession. These are the unknowns, or uncertainties, that we spend the most time worrying about. How can we spend our time thinking about what we can control and planning on keeping the uncertainties to a minimum?

Analysis:

1. We should know our competition and the strengths.
2. We should know our service or product better than our competition.
3. We should know the contracts we currently use for our business supplies or services.
4. We should be following our cash flow on a daily basis.
5. We should have a business plan that measures how we are doing in our business.

Solution:

In order to keep surprises to a minimum we should keep as many variables in the known category as possible. We should have long range contracts for supplies or services we need to accomplish our business. This will enable us to control our expenses and will give the business owner an opportunity to evaluate where cuts need to be made if necessary. I would suggest the business owner do a SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats). Strengths and weaknesses are internal to your business while opportunities and threats are external to you business.

Examples of strengths could be product knowledge, in depth marketing campaign, or financial backing. Weaknesses could be education, lack of documented processes, or reliability of marketing data. Opportunities could be technology developments or global influences. Threats could be changing tax laws, changing health care requirements, or market demand. Completing a SWOT analysis will bring all of these factors into the light of day and allow the business owner to plan better for tomorrow.

Click here and download a SWOT analysis template from our sample documents page and start working on your business today!

Comments

  1. I printed the form, now let’s hope we have more numbers in the strength column as opposed to the weakness side! Thanks for the tip!