Identifying business problems is a big part of how you handle the issue of your company not making as much money as it realistically could be. Being able to quickly identify problems within your business is even more important when your company is losing money.
In many instances, a problem with a business may not be readily apparent from the start. It isn’t uncommon for a problem to go unnoticed until it’s been around long enough to cause some damage. At that point, you and your staff could find yourselves scrambling to deal with the issue, so that you minimize the impact.
Even if you manage to catch it quickly, your revenue and market share could suffer just as easily as your reputation with your customers and clients.
So how do you go about Identifying Business Problems so that you can deal with them as early as possible?
It’s Important to Ask Yourself Questions
You can’t come up with an answer unless you have a question first. When you’re looking for a way to identify a problem, it helps to ask yourself questions so that you can come up with potential solutions.
Let’s say that you have a customer who wants to return something that they purchased from your company. When they do attempt to return it, either you or one of your employees messes up the process, making it take longer than it should.
Why did it happen this way?
Was the employee in question properly trained in the return process?
Did they carefully listen to the customer’s concerns?
These are just a few of the questions that can arise in a situation like this. Without the right answers, you could not only jeopardize your relationship with this particular customer, but others who come later.
Identifying business problems by being able to answer these questions in a way that will only improve the area that’s being questioned is critical to solving a small issue before it has the chance to grow.
If you don’t work to appease the customer in the above example, for instance, who’s to say how many ears word of the customer’s negative experience could reach?
Without addressing the customer’s problem to their complete satisfaction, you could open yourself up to scrutiny from many others in the future.
Know What the Root Cause Is
Part of identifying business problems and dealing with them should ideally involve the goings-on beneath the surface.
Everything happens for a reason in business, good or bad.
Has more than one person returned the same product? There might be a problem with its design or construction.
Do you feel as though you’re not getting enough business? You may need to increase your marketing efforts by doing some advertising.
Has an employee’s performance dropped recently? There may be an issue in his or her personal life that’s causing it.
Beneath every problem is a deeper issue that has to be dealt with for the problem to be completely eliminated, rather than simply swept to the side.
If you leave the underlying cause of a problem in place, you run the risk of the immediate issue coming back time and again.
Get Some Insight
Identifying business problems isn’t something that you should always try yourself.
It could be that a problem exists right under your nose, but you’re not in any kind of position to notice it. That’s why it helps to get outside opinions. Talk to co-workers, customers, and entrepreneurs in the same industry, and anyone else who might be able to find issues that you could be missing.
By consulting with people who are constantly exposed to parts of your business that you may not deal with every single day, you could potentially uncover issues that might have otherwise been allowed to persist.
That’s why it pays to practice a degree of transparency and open dialogue in business. Not only will you have other sets of eyes and ears that will notice things that you could overlook, but you’ll be establishing bonds of trust that could take your business places for years to come.
Don’t Waste Time
When it comes to identifying business problems, the worst thing you can do is let it sit. Problems have a tendency to snowball if you let them, so you need to be proactive.
By having even a small role in every aspect of your business, you will have some idea of how things are run. That will expose you to the idiosyncrasies of that part of the business and show you what you can do about issues as they arrive.
As you become more familiar with your company’s different aspects, you’ll become better at identifying business problems and keeping them from growing to the point where dealing with them will take more time than it realistically should.
Remember, running a business successfully does not need to be complicated. Keep it simple!
For more information on business analysis, business planning, and ways to grow your small business profitably, please check out our website www.portalcfo.com.
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Manny Skevofilax is a consultant and speaker that assists his clients with successfully navigating the challenges of growing their businesses profitably. Since 2003, Manny helps businesses to enhance their financial results by using his experience in strategic planning, financial statement analysis, operations, and team-building. His consulting firm, PORTAL CFO Consulting, Inc., has attracted clients from diverse industries in the United States and abroad.
Manny can be reached at 410-808-3441 or via email at email@example.com.