How to Analyze Your Business to Survive a Changing Economy

Dec 14, 2010

One thing that I have learned during the past 30 years in the trim business is that you can’t survive if you put all your eggs in one basket.

A key to ensuring your business survives a changing economy is to take the time to look at the big picture and assess the health of your business.

From my own personal experience, we built our business by upholstering street rods, customs, muscle cars and antiques. We did meticulous work, put in long hours and built a great customer base, but I started to realize that I was putting all my eggs in one basket.

In order for the business to grow, it was going to take more than just hard work and long hours, it was also going to take a better business plan. We started by creating a SWOT analysis, which evaluates Strengths, Weaknesses, Opportunities and Threats in order to gauge the health of our business.

Breaking down the SWOT, we started with the business’ strengths. When evaluating your strengths, you can review several areas such as the location of the business.

For example, if you’re located on a major highway with great visibility, with a building and property that looks good, customers will want to come to your business. Upon entering, you might have a showroom or a waiting area where the customer feels comfortable.

Another strength could be an experienced staff that does great work and delivers the product that your customer expects on time, every time. Your staff members are diversified in their skill sets and able to do what is expected. Maybe you have a technician who’s excellent at installing convertible tops or highly skilled at cutting and sewing seats.

These examples should provide you with a few ideas and help you put together a good list of items that your business does well.

The next area to focus on is what you feel are your business’ weaknesses or things that can be improved upon. Some areas to review could be your location or the condition of your building.

For example, if your customer enters your building through the shop and it’s cluttered or messy, they might be hesitant about leaving their vehicle there.

You might look at the experience level of your staff; maybe you need a convertible top technician or someone who does a better job at cutting and sewing. This area of SWOT, if looked at honestly, can be a real eye-opener because we rarely take time to look at what we can do to make our businesses better.

The opportunity portion of the SWOT can be the most-beneficial area to evaluate in changing how you operate.

One idea could be the opportunity to network within your community by joining an organization such as your local Rotary or Lions Club and donating some of your time. Working with these organizations will give your community a better understanding of what you do while showing that your business is important to the community.

Another opportunity could be for your staff to attend educational training or to learn other skill sets that could open up other opportunities for your business to grow.

Outsides sales could be another area that many businesses can look toward as an opportunity, as a salesperson can bring in additional business by visiting auto dealerships, and marinas, or even restaurants and dentist offices.

One area that many people might miss is the ability to hire entry-level technicians from schools like WyoTech that train students in their trim and upholstery programs.

Finally, we look at the threats. This can be a portion of the SWOT analysis that can be somewhat confusing, but when looked at closely can provide answers as to why business has started to back slide.

Threats can be other trims shops that have opened in your area or the addition of a new highway that has changed traffic patterns so your business isn’t as easy to get to.

A threat can be that you recently lost an employee to a competitor and some of your clientele has also left because of that staffing change. When evaluating this part of the SWOT, you need to look at things that are sometimes outside of your control but can have an adverse affect to your business’ health.

The SWOT analysis is a great tool to use and can be helpful for many business owners. Surviving during a changing economy can be difficult, so looking at the health of your business is important, and having the tools to help you evaluate your business is critical.