The Key to Your Successful Business

Last week I wrote about creating your own SWOT analysis when starting your own business. The SWOT (Strengths, Weaknesses, Opportunities, and Threats) is an invaluable tool when starting a new business.

Once you have a good handle of your SWOT, it is a good time to decide what it takes for a company to be successful in your industry.  Think about the major players in your industry. What is it that they all must do to be successful?  Come up with the top 4 or 5 things that a competitor must be particularly good at.

Think about your own business.  What is it that YOU must do to be successful in your business?  Consider what your competitors are good at. You need to be “good” at these as well.  However, for you to be successful, you must be “especially good” at a least a couple. things. These are your Key Success Factors or KSFs. Now, look closely at your KSFs and think about them in conjunction with your Strengths and Weaknesses. Do some of your strengths really help a KSF stand out above the competition?  If so, then you have discovered one of your competitive advantages. <—- this is the actual KEY to your Success in business.

Once you have this, revisit your SWOT. Are there any things that you listed that have no effect on the KSFs? If so, is there a way that you can use a strength, or lessen a weakness, to improve your KSF or competitive advantage? If the answer is no, then take them off your SWOT. They are not a priority.

Determining your competitive advantage is vital to the success of your business.  Your competitive advantage is the reason WHY a customer should choose to go with you. It forms the basis for determining your marketing strategy and growth strategy. It helps to determine your pricing strategies.  And, it will be an integral part of determining your company mission and vision for the future. However, there is one very important note here:  having a low price is NOT a good competitive advantage. Sure it may get you some work in the short term, but the customers that you get by low-balling the competition  may be the same customers that you lose to the next new entrant into your industry.

Give some thought to your KSFs. Next week, I will continue with the discussion and provide further tools to aid in the successful start of your business.