Doing a Mid-Year Business Review – As Important This Year as Ever!
No one will argue that 2020 has been an experience like none other! Amid these tumultuous times, most businesses are still working to do the best they can, adjust as they need to, and simply keep going. We’ve all been in survival mode. BUT, this isn’t a reason to skip out on your mid-year business check in! All businesses can reap the benefits of a halfway assessment – and the process isn’t as painful as you may be thinking.
by Anne Hussey
When we think of a mid-year review, we think about strategic plans. If you have a strategic plan, good for you (the number of family businesses without a strategic plan is startling)! If you don’t have a written business plan tucked in your drawer that you can pull out and flip through, don’t stop reading! We have a simple, effective way for you to check in on your business status right now, no homework required.
A mid-year assessment may be what your business needs to reach its goals.
So here we are in this slow re-opening phase of the pandemic. It’s midway through 2020 already, and it’s time to pull out of the chaos for just a few moments. Each business needs to stop and look around at what has changed, and assess how it may impact your business strategy moving forward.
Here are some great questions to get you started:
Have customer needs or expectations changed? If so, in what way? More? Less?
Is our product/service still needed in the same way as pre-pandemic? What changes do we need to make? How have the changes we have already made working?
How has our competitive landscape changed? Has a key competitor left the market? Has a new one entered?
Has the size of our market changed?
Do we need to adjust our financial plans or financial expectations?
Business owners always have to be willing to look at the market through a different lens. We must pay attention to what is new, what is different, and what are others (competitors) doing. COVID-19 has changed so many things. For many businesses, vendors and suppliers have changed, the way we get our services and products to our customers has changed, and our financial patterns have most likely changed.
What is really exciting is that a new opportunity might be presenting itself! If you aren’t looking around, you might not see it, and that is why stopping long enough to step back and do a proper review is so important.
Consumers have a whole new way to access products now.
Look at the restaurant and brewery industry. They are experiencing a whole new distribution model now – we have door to door delivery of beer! What was once a thriving tasting room has had to move to offering growlers and bottled options, and customers now order online for curbside pickup or delivery. Flourishing dining rooms have turned into tented parking lot eateries and people eating takeout in the back of their hatchbacks. What they all have in common is that they responded effectively to a sudden shift. They still draw in business, just in a different way. What remains to be seen is whether this is temporary, or if this a version of a new way of doing business for these industries. Time will tell, but businesses that were paying close attention had the upper hand in responding, and remain sin business as a result.
How is your business measuring up?
Your business may not need to serve your customers in the parking lot, but you’ve probably had to change how you make it accessible. Maybe you’ve eliminated the middleman, package your products differently, or perhaps they are consumed by the end user differently. This is a time of thinking creatively, and some changes we may find are sustainable past this immediate crisis.
So much of consumer needs have shifted online. Not just online ordering, but online learning and delivery of services. Again, all expanded because of environmental factors, but it is highly suspected that the delivery of education, training, and even consulting, fitness, and therapies may very well be changed forever in its delivery.
Economic shock can turn into shifting financial models.
While businesses may not be making money the way they did before the coronavirus, that doesn’t mean there isn’t income to be made. With changing costs of goods sold, operating costs, and staffing needs, many businesses are saving money in some aspects of their business. And they may be spending more in others. Taking a close look at how financial models have changed, and profit centers and revenue streams have shifted, is imperative to planning out resources for the second half of the year.
Many businesses do not need as many hands-on staff helping customers right now, but they have needed to invest in their websites and technology to serve customer demand. Other, such as garden centers[AH1] , have had to add staff to be available for personal shopping assistance and fulfilling curbside pickup needs. In many cases, expenses have simply shifted.
SWOT Analysis – An Extremely Useful Tool
A simple but useful framework for analyzing your business’s strengths, weaknesses, opportunities, and threats is a SWOT Analysis. It helps you to build on what you do well, to address what you’re lacking, to minimize risks, and to take the greatest possible advantage of chances for success.
SWOT is familiar to most business owners, and it shouldn’t be reserved for only business school theses or major business planning sessions. At Quad Group, we use it as an integral part of our work with clients. It can be as simple or as complicated as you want to make it, but it is always effective at drawing out information and making owners aware of what is going on with their business and their markets.
It has sustained the test of time because it gets down to the heart of things. How do you take a weakness and turn it into a strength? How do you take a threat and turn it into an opportunity? It demands objectivity to uncover things, things that may be rooted in outdated or flawed beliefs, things that we often ignore or deny.
Analyze your business’s strengths, weaknesses, opportunities, and threats for a simple and effective mid-year assessment.
As a business owner, we can only see how to make changes and adjust accordingly by looking at things differently. The great thing about a SWOT analysis is that it requires us to reframe the way we look at our businesses. So much has changed in recent months. This is the perfect time for a SWOT analysis if you’ve never done one before; The questions posed at the beginning of this article become your what, SWOT becomes your how-to.
The strength of a business comes from internal factors. Strengths are things that you have full control over, and are the things that the company does well.
SWOT analysis questions regarding STRENGTHS include:
- What are your greatest assets?
- What makes you better than your competitors?
- Do you have a strong customer base? Do you have brand loyalty?
- What makes your company unique?
- How skilled are your employees?
- What do other people say you do well?
Just like the strengths of a business, the weaknesses are also an internal factor, things under your control. These are the things that hinder your progress and prevent your business from reaching its optimum level.
SWOT analysis questions about WEAKNESSES include:
- In what areas do you need improvement?
- What areas do your competitors have an advantage over you?
- Are your employees lacking in knowledge or skills?
- Do you have enough capital to invest in the business needs?
- Is your customer base too low?
- Are you making enough profit?
Different than strengths and weaknesses, opportunities are external factors. While you can’t control these factors, you can take advantage of them. Opportunities can come in the form of market shifts, trends, economic factors and, currently, a pandemic. This last factor may surprise you, but, yes, we think the coronavirus has presented just as many opportunities as it has threats!
SWOT analysis questions about OPPORTUNITIES include:
- What external changes are happening that you can capitalize on?
- What are the current trends in the industry?
- Can you take better advantage of the local market?
- What is your market missing?
- Is a competitor failing to satisfy their customer base?
- Do certain risks give you the competitive edge (weather, economic changes, political climate, cyber-security, COVID-19)?
- How does your brand help you get more customers/profit?
Every business, in every industry and market, faces threats from external factors. Like opportunities, threats are also beyond your control. Threats prevent you from making the most out of your resources and your business. While threats are situations that you need to avoid, spending the time to run “what-if” scenarios is a great exercise so you can plan to minimize the effects of a potential threat. We like to think of it as managing risk.
SWOT analysis questions about THREATS include:
- What are the negative aspects in the current market?
- Are there potential competitors who could become major competition in the future?
- What are your current business obstacles?
- Are your human resources satisfied? Do you have strong longevity?
- Do you see a change in the preferences of your customers?
- What are the chances of a natural disaster affecting your production?
- Will political instability hurt your business?
- What are the biggest risks to your business?
- What if one of your significant markets goes away?
Closing Thoughts on Mid-Year Assessments
Employing a SWOT Analysis doesn’t need to take a long time to complete. It will give you a structure for thinking about what your core strengths and the opportunities they provide. It will make you aware of where your greatest weaknesses reside and if they open a door for threats you aren’t prepared to ward off. Bottom line: it really works! That is why it has sustained time. It’s a clean, simple way to get at nuts and bolts of the key business factors that determine your success and sustainability.
If you believe that mid-year check-ups are a “large corporate thing”, think again. Mid-year reviews help business owners see how they are doing and enable them to make adjustments to achieve their goals. An objective assessment makes for a vigorous reality check – and can help you improve your company’s performance over the second half of the year.
The lack of a clear vision for moving a business forward has a negative impact on all aspects of the business.
Completing a SWOT Analysis at this point in your mid-year cycle is a great start to aligning your business vision with tangible business efforts. At Quad Group, we use the SWOT Analysis as part of our strategic planning assistance with clients. It’s really helpful for a family business to utilize outside guidance for this process because it allows everyone in the organization to participate fully in the conversation. Our team brings tremendous diversity in the kinds of industries and the sizes of businesses we have worked with, including our own family businesses. We’d love to put our experience to work for you!
We hope you will contact us so that we may discuss your ideas and how we can help your business.