Expanding your business is always an exciting venture. Before you move forward with plans for a new product, market or location, it is helpful to perform a gap analysis. With a gap analysis, you can better strategize around where your business currently is and where you would like it to be. Beyond helping you decide if you should expand, there are many benefits of a gap analysis.
What Is a Gap Analysis?
A gap analysis provides an in-depth look at your company so you can determine what you need to make growth happen. Gap analysis is used to examine both expected and current business practices.
A gap analysis answers the questions of where your company is now, where you would like it to be and how to get there. In essence, how do you bridge the gap between your current and future company?
You can use a gap analysis for such things as:
- Improving sales
- Getting certifications
- Implementing new business segments
- Entering new markets
- Launching new products
- Improving your customer service
Types of Gap Analysis
There are many types of gap analysis. For instance, a service design analysis inspects the management concepts of service and how they need to change. A service quality analysis is more concerned with the apparent quality of service. Meanwhile, the service delivery analysis focuses on the difference between standards for service and the actual service delivered.
All types of gap analyses explore different aspects of the same problem. The importance of performance gap analysis is that it helps you create viable solutions that take your business to the next level.
You can opt to do a gap analysis internally, using your own employees. You can also hire an external company to help you perform a gap analysis. Opting for the latter may help you take a step back from the minutiae of your company and get the input of a fresh pair of eyes.
Elements of a Gap Analysis
There are four essential elements of a gap analysis:
- Determine the current state of your business, whether financial or otherwise.
- Determine what you want your business to look like within a specified timeframe.
- Identify what the gap is between the current state of your business and what you want it to be.
- Devise a strategic plan to close that gap, including a budget and timeframe.
To get the most benefits of a gap analysis, you should do it for particular business segments rather than your entire company. That way you can better focus and track your efforts, highlighting the importance of your performance gap analysis.
Benefits of Gap Analysis
Gap analysis, when used correctly, can be applied to a wide variety of situations where a business wants to improve. It is especially important for business leaders who want to make plans months and years into the future.
There are many advantages of a gap analysis, for your company now and in the future. Advantages of a gap analysis include:
- An in-depth look at how your company currently operates.
- A chance to assess if things are working as efficiently as possible at your company.
- Forcing you to strategize around what you want your company to look like and how to get there.
- Making better use of company resources and finances.
- Allowing teams to quickly diagnose problems and create ways to solve those problems through integral changes in business practices.
The importance of performance gap analysis can vary by company or industry, but it is a worthwhile way to provide an in-depth look at your business to help it grow. The advantages of a gap analysis can be years of increased success for your company.
Leslie Bloom has worked in upper-level management positions in both publishing and the mental health field. In addition to years of business and management experience, she has more than 20 years of experience writing for a variety of online and print publications, including Metro Magazine. She holds degrees in both journalism and law.