Many people dream of beginning their businesses. And businesses crop up every day worldwide. However, the rate at which they collapse is high. According to Investopedia, 30% of the new businesses fail within the first two years. Currently, 50% collapse during the first five years and 66% during the first ten years. One of the reasons new businesses fail is the failure to take a breath to define their current business position.
I dedicate this post to all small success-oriented businesses. You must learn how to work on your business rather than just being in business if you want to survive in your first years. To effectively do this, you need to take a breath to define your current business position.
What Is Your Current Business Position?
As a small business, you should ask yourself this question. By looking at your current business position, you’re reflecting on where you are now in your small business. Know that you’re where you are because of the actions you have taken and the decisions you have made along the way. Where you will get to in future will be a result of the choices and actions you make now. Considering today as your first day of the rest of your business life is crucial because your journey begins from where you’re currently.
Why Is It Important to Evaluate your Current Business Position?
Many times small business people find themselves so busy in their businesses that they rarely take time to reflect on where they have come from, their current business position and the future of their businesses. They keep doing what they have always been doing. And because of that, they continue getting what they have still been getting.
To get out of that scenario, it’s vital, from time to time, to take a step back from your daily workload and assess exactly where you are now before you continue with your business journey. Where you are now may not be a good business position, and if you do nothing to it, the chances of failing to succeed in business are high. And you cannot take your business from one level to another unless you take this vital step back from your daily business tasks.
Be Honest When Assessing your Current Business Position!
Assessing your current business position is a complicated task, indeed. Why? Because you must be disciplined and focus on factual information instead of your personal feelings. You have to focus on facts. These facts may involve some detail to which you have never paid attention. Therefore, you should be careful as you collect this information so as not to rely on guesswork. The information you obtain serves as a foundation upon which you can build your future.
For example, in our laser engraving business, we sat down to reflect on the effectiveness of our marketing strategies. And we focused mainly on the internet marketing strategy for one month. We went into the details of how we get website visitors from whom we get real customers and the following what we discovered.
- 73.9% of our website visitors came from organic searches from Google. These were mainly people who browse the internet using Google Search Engine. We are doing pretty well here because of our continued effort with our article marketing strategy on this blog.
- 23.4% of our website visitors were from direct traffic, visitors who directly enter our company URL (www.golaserengraving.com) into their browser.
- 1.4% of our website visitors were from referral traffic. Other than search engines, these are visitors who find us through another website that points to ours. We are doing poorly in this aspect.
- 1.4% of our website visitors were from social media. And these are visitors who come to our site from social networks like Facebook, Linkedin and Twitter. We are so weak in this area.
What Does the Above Analysis Imply?
Looking at the above data, one can conclude that GoLaserEngraving.com relies mainly on one source of visitors. Analytically, you shouldn’t rely on one source of website traffic because you can collapse if that source stops generating visitors to your business. But that is our current business position as far as our internet marketing strategy is concerned.
What should we do then? What we need to do is to concentrate more on other sources of traffic. And these will include mainly people from social media and referral traffic. We need to lay strategies that will bring to our website traffic from those two sources. And by so doing, we shall create a strong foundation that will make us continue getting a steady traffic flow.
What Should You Focus on to Assess your Current Business Position?
To assess your current business position adequately, you must look at the following areas.
- Your business
- Turnover and profit margins
- Business Strengths
- Your customers
- Attitude towards your business
Now let us look at each area one by one.
Here you look at your business in its entirety. What words best express exactly where you are if you try to describe it now. You can do this through brainstorming as you write down what comes to your mind.
Secondly, make a list of the services and products you offer. Find out what sells well and what doesn’t. Look for answers to either strengthen or improve in your weak areas.
Turnover and Profit Margins
Here you look critically at your turnover on a monthly and annual basis. What is it? Look also at your current end-of-year profit. How is it? Note that it will be hard to get the facts in this aspect if you don’t keep business records. It is why you have to maintain records to assess your current business position in this area.
In this aspect, look at the main advantages that your business has. But also, your strengths are equally important. What are they? What are the primary skills contained in this business?
In this aspect, assess the nature of your customers by knowing
- How many of them do you have?
- From where do they come?
- Which kind of profile do they have.?
- Who are your best and worst customers?
Attitude Towards your Business
Here you find out how you feel about your business, what you find difficult, and what you enjoy and like doing.
When you get back to evaluate your current business position, you gather specific facts, thoughts and feelings to help you. You now have the starting point of where you are now. The information you collect gives you a basis from which you start thinking about the future of your business and where you want to take it. It’s such an essential activity in your business life. What is your experience? Could you share it with us?