Examining your Business: Creating Scenarios and Evaluating Capabilities

In answering the question “When is the right time to examine your business?” the best answer to that question would not be measured by unit of time. There is not fixed duration to this answer, nor is there a one type fits all reply. Preparedness is ultimately the best answer to this question, yet preparedness is defined differently by different business ventures. Instead of solely basing preparedness on time, the following steps listed below can guide the aspiring entrepreneur in business examination.

1. The Big Idea

In the advertising industry, large and successful advertising campaigns are not conceived without a big idea. The same principle applies in business, because all the succeeding moves a business man will make must be rooted to this big idea. The big idea includes the objectives of your company and who the market will be. The conception of the big idea does not need to include the nitty-gritty yet. Big ideas include visions like “I want to my business to grow nationwide.” If you are a conservative entrepreneur, you might want to keep it regional. Your vision can be expanded or modified from time to time, but it has to be created before anything else.

2. Marketplace Analysis

When the vision has been created, the analysis of various factors in the marketplace must be conducted. It is often in this step when the question “When is the right time to examine your business?” gets significant answers. One analysis can focus on the “business climate”. Back in 2009, the global financial crisis affected many enterprises. The crisis was bad news for high-end retailers but profitable for credit and receiving companies. Business examination is crucial in this part because the business climate aspect of business planning is an external factor, where prevention and mitigation are certainly better than addressing problems only when they come up.

3. Marketing, Operations and Financials

Step 3 is where business examination should make the aspiring entrepreneur grounded. It boils down to the question of managing reality and expectations, and of identifying strengths and weaknesses. If you intend to setup a retail store for your high-end beauty products in a business district, do you have the manpower and financial capability to pay for it? Rent can consume a lot of financial resources. Perhaps a kiosk will do, or participation in trade fairs can attract a stable clientele. The latter may potentially provide a sure stream of income, which can help in saving up for a permanent store and financial resource to pay for manpower. This is the part where creating scenarios will help in merging reality and expectations.

4. Exit Strategy/Fallback

In examining the capability to sustain a business, a business person must measure contingency abilities. Every business is a gamble, and pitfalls may be predictable and unpredictable. Since the creation of a business plan is also a risk mitigating process, a wise business person must be able to allocate contingency funds and resources just in case internal and external factors prevent the business from attaining its objectives. At the very least, you have resources to be able to pick yourself up when you fall.