It’s always worth taking some time out to consider factors that can affect your business – perhaps as part of a SWOT analysis. Identifying threats or opportunities as early as possible helps us to plan – to take advantage of opportunities, or to mitigate threats.
As we start to come out of the pandemic and return to normal business operations we need to be mindful of the things we can and we cannot control in our businesses and our daily lives.
It’s maybe not a comfortable place to be at times – knowing that there are so many things we have no control over – but it’s better to recognise that and plan for it. Also – whilst I am here – this is not about making excuses – far from it! “I can’t control it so I just have to live with it” – it is just that – putting in place contingencies to mitigate adverse events. We have been experiencing many more storms in recent weeks in the UK and whilst our bsuiness may not be directly affected (although you are likely to have been hit by power cuts) it can affect transport, or our customers or a number of different factors.
So let’s have a look at all the factors that can impact our businesses – even outside a pandemic there are so many things to consider!
This was inspired by an article I read – and it divides it into Micro (things relevant only to your business or sector) and Macro – the global picture!
We need to be mindful of these when we are planning – and have contingencies in place. Nothing will ever be as “big” as covid (when I first wrote about this we didn’t have the potential threat of WW3!) – but the reality is that our business could fail on something small – the proverbial “straw that breaks the camel’s back”.
The original article was written from the point of view of marketing but it really pertains to everything we do in our business and should be considered part of our strategy for everything from pricing to new product development.
Lets look at some factors individually.
Micro Environment Factors
- Suppliers: We all have suppliers – not just those who manufacture “things” – it may be your accountant, or your web designer or your VA. Their behaviour – especially rising prices – can seriously affect your business. Their customer service can be crucial to your success. The message here is that, as far as possible, you should try to build good relationships with suppliers – and remember that “cheapest” is not synonymous with “best”!
- Reseller / MLM / franchises: Are you a reseller of someone else’s products – or does someone else sell your products or services? The way they interact with customers can affect your reputation and vice versa – make sure that this relationship works for you.
- Customers: Of course – your customers are at the heart of everything you do – if their behaviour changes or the relationship degrades then your business will suffer. Keep customers happy should be in your mind at all times (that does NOT mean that the customer is automatically always right)!
- The competition: keeping a close eye on other companies who sell similar products to the same or similar customer base – what are they up to? Make sure you are aware of who your competitors are, and how they are interacting with the market.
Macro Environment Factors
- Demographic forces: what is happening to the population that makes up your customer base? Is their composition (age, gender, ethnicity) changing over time – is their behaviour changing?
- Economic factors: The general economic environment affects everything – our customers (and prospective customers), suppliers, workforce – all of this has been challenging in recent years.
- Natural/physical forces: we live in times when the world is being affected by climate change, so that storms (see above) may become more frequent – and we as businesses can choose how we respond to the threats.
- Technological factors: Are you an early or late adopter of technology – you always need to be mindful of the latest tech and how you can use it – but also consider how your customers use of tech might affect your business.
- Political and legal forces: Sometimes hard to predict – there are geopolitical forces which affect us all but you always have to think about changes in policy and legislation nearer to home.
- Social and cultural forces: what do your customers care about? If they are likely to vote with their feet because you don’t have a vegan option, or your packaging isn’t seen as “green” then you will lose sales. Make sure you are abreast of current trends – and don’t forget to tell people if you now have an organic product! (You’d be surprised how many businesses think their customers will just “know”)!
- They didn’t think about a global pandemic!
which affected every single one of the above!
Which of these is more important to you and YOUR business? What threats can you identify? How can you plan for them? Which gives you opportunities – is your business ready to grasp them?
Mitigation and Disaster Planning is the next step – which we can look at in a few weeks time.
Get in touch with me if you’d like to chat.