Weaknesses in business are the tender spots in your enterprise that can cause inefficiencies, losses and sometimes even the failure of a company. But much like a person, a company, with its flaws and strengths, can work to become better. Striving towards a higher goal can ultimately result in prolonged success.
A weakness can be defined as a lack of vigour in your enterprise that prevents you from reaching company objectives. These internal shortfalls can take various forms. Some weaknesses are more severe than others. If you are fortunate, your business can survive despite these, but for other enterprises, it can be debilitating.
As an entrepreneur, you need to catch the weaknesses and address them as soon as possible. This you can do by using analysis tools, but first, let’s take a look at the different types of weaknesses that can exist in your business.
Types of Weakness in Business
The types of weaknesses in your business can relate to the business model, culture, management strategy, communication channels or be department-specific. Here are a few common weaknesses to consider:
- An unscalable, flawed or unsustainable business model
- Lack of training, knowledge, key capabilities, Hiring the right talent or losing them
- Failure to monitor and measure processes and risk
- Failure to innovate, change
- Failure engage customers and build industry relationships
- Inconsistencies in product quality, design and availability
- Improper cash flow, financial planning and management
- Low brand awareness and recognition, or negative brand image and reputational damage
- Low customer and employee satisfaction
- Low performance of employees, executive management or partners
- Not addressing problems or issues timeously
- Slow processes with too much internal red tape and bottlenecks
- Project cost and schedule overruns
- Misalignment of goals and policies within the business
Tools to Analyse Weakness in Business
Identifying the weaknesses in your business isn’t a guessing game. There are tools that can help you identify what is lacking so you can start strategising a resolution.
SWOT Analysis
A SWOT analysis is one of the most common ways to assess your business’s weaknesses. SWOT stands for Strengths, Weaknesses, Opportunities and Threats.
During this analysis, you will need to objectively evaluate the internal and external environments of your business. This will give you an idea of what is working well and what is preventing your enterprise from moving forward.
To identify weaknesses in your SWOT analysis, yo will focus on internal challenges such as customer retention rates, inefficient processes, outdated technology, or poor management practices.
Benchmarking
Benchmarking is a tool that juxtaposes a business’s performance against competitors. From this comparison, you can identify the standards that your enterprise needs to achieve. Using this standard, the enterprise can be assessed to see what the shortcomings are as well as strengths.
By using a benchmarking method, realistic goals can be developed to rectify any weaknesses.
Surveys
Surveys can be digital or in-person questionnaires directed to employees, customers, and business partners. This qualitative approach extracts information from stakeholders that will indicate the strengths and weaknesses of your operation.
Impact of Weakness in Business
Weaknesses in your business can have detrimental effects on your enterprise if you don’t address them early on. It can hinder growth, decrease profits, and even damage your company’s reputation.
For instance, employees who don’t deliver quality customer service to your clients can cause you to lose customers. Due to the loss of clients, your business might see reduced profits and it can develop a reputation for providing bad services, ultimately preventing the company from scaling and growing. However, if your thorough analysis finds that your big weakness is the interaction between employees and customers, you can start to identify the problem. A business owner might even find that the true reason behind this is not horrible customer service, but instead employees who didn’t receive training.
This example shows that studying your business’s weaknesses can indicate what any underlying issues might be, allowing you to address the true cause.
Armed with the correct tools and information, business owners and entrepreneurs can identify and address the weaknesses in their businesses. The sooner these issues are dealt with, the quicker a business can grow and reach the success it works so hard to obtain.
