Running a business is tough whether it's a conglomerate with international reach or a closely held sole proprietorship. Issues in the business world can be external, coming from the big-picture environment, or they can come from your particular industry or set of circumstances. The better you understand both the greater landscape and your company's specific strengths and weaknesses, the better you'll be positioned to plan thoughtfully and overcome obstacles.
External Problems in the Business World
- Rapid evolution. As technologies advance at unprecedented speed, systems and processes that make perfect sense in the present can quickly grow obsolete. This level of ongoing change creates a level of uncertainty that makes it extremely tricky to plan. To deal with this constantly changing environment, develop concrete strategies but also stay flexible about the details so you can adapt as needed.
- Globalization. Even if you make a product that you source and market it in a very limited geographic area, you may be competing with companies and alternatives from all over the world. These alternatives may be produced in areas where labor and materials are considerably less expensive than in your locale. If you're serving a local clientele, develop strong relationships as well as brand loyalty and systems that keep your company competitive. If you're competing globally, look far and wide for the best or the cheapest resources.
- Regulation. Whether you run a food business or a real estate company, you must comply with rules and regulations relevant to your industry as well as general guidelines for accounting and tax liabilities. These regulations can become problems if you're inclined to cut corners or if you have difficulty adapting as the regulatory landscape changes.
- Overstimulation. The internet age is a busy time, with information coming at the typical consumer at a rapid rate. It is difficult to cut through the noise and present a clear message that your audience can easily grasp. This widespread overstimulation also makes it difficult to run a business, to understand what is truly important and to tune out messages that are unnecessary and irrelevant.
Internal Problems in the Business World
- Management. Your business will only be as good as the people who run it. Issues in business management may include lack of training, lack of leeway to make strategic decisions and choosing the wrong personalities for management positions.
- Ethics. A business that is run with integrity will build a loyal clientele and will be more likely to retain quality employees as long as your business model is sound enough to pay your staff fairly. A business with unsound ethical practices will have a questionable reputation and possibly ongoing legal issues. Ethical problems in business include unfair billing practices, failure to stand behind your products and services and dishonest bookkeeping.
- Personnel. Unless your business is small enough that you can do everything yourself, you'll need to hire and retain qualified staff. Personnel problems include difficulty finding and keeping people who will represent your company well.
Performing a SWOT Analysis
Although business ownership and management can be challenging, problems are often opportunities in disguise. A SWOT analysis is a powerful tool for evaluating the internal and external difficulties (Strengths, Weaknesses, Opportunities and Threats) facing your company and reflecting on them in light of the strengths and opportunities that will help you overcome them.
To perform a SWOT analysis, first list your company's strengths and weaknesses or the internal variables that may affect your odds of success. Next, list the opportunities and threats in your business landscape or the external factors that may cause problems or windfalls. Use this matrix to plan for the future so you can anticipate difficulties and make the most of favorable possibilities.