By Stephen Rhodes
Measure twice and cut once. My Dad use to say that. And while his advice often came right after some woodworking blunder, we can all appreciate it for its common sense. It’s sound advice for a small business launch too.
Lots of businesses are launched in a flurry to capitalize on some seemingly instant opportunity. Few of these are around for the duration.
A good business strategy is well thought out.
So what do we need to measure?
Start with a simple SWOT exercise. Strengths, Weaknesses, Opportunities and Threats.
Understand what your strengths and weaknesses are. What opportunities exist in the marketplace and what are the threats to success?
And then do the same analysis of your competition. Unless you have a completely unique product or service, it’s likely someone already owns the business you plan to take away. Understanding their strengths and weaknesses is important if you hope to position your company as something better.
Are the opportunities real? Opening a real estate business in the boom year of 1989 might have seemed like a good idea. By the spring of 1990, it wasn’t so attractive. Timing is important. Timing is everything, especially so today.
How competitive is the marketplace and how can you differentiate your business from the others? It’s so important that you stake out your turf succeed. Be the best at something.
What threat exists for your fledgling business once it is launched? What reaction will there be from your competitors? Realize that your competitors are likely to react to your entry into the marketplace and consider what they might do – lower prices for example – and how you might respond. If you are entering a mature marketplace, your competitor(s) has been around for a while and you are not likely the first to pose a threat. The response will be swift and aggressive.
There are many examples of giant killers in the marketplace, people who have successfully taken business away from a market leader. I would venture none did it without careful analysis.
Most of us wouldn’t make a major purchase without looking at all the options. Starting a business is a major investment. All the options need to be weighed and carefully analyzed.
You want your business to have a focus, a point of differentiation. You need to know your strengths and weakness and those of your competitor. Make sure the opportunity is real. Consider, what are the threats to success?
Measure. And then measure again.