Business Planning Considerations: Know Your Capabilities
To rank the importance of each capability to your company’s success, use this form for your business plan. Be frank, circling Excellent in each area where you know that your business excels, and giving lower ratings where you think your business falls short.
Here’s a little background about what went into their thinking. R&D may not seem important to the success of a catering firm, but the Soup’s On expansion strategy called for a website where customers could view the current selection of dishes, create personalized menus, place orders, and schedule catered events.
To support this Internet strategy, the owners knew that they needed to beef up their web presence, so they gave R&D a ranking of medium importance. They gave operational ability a ranking of high importance after deciding that their ability to accurately fill orders and prepare meals was fundamental to their success.
They also gave a high ranking to distribution and delivery, which they defined as their ability to transport food to events and to supervise setup, serving, and cleanup.
Match your capabilities to the task at hand
After you rank and assess your company’s capabilities, use your findings to complete the Strengths and Weaknesses Grid. This form shows you, at a glance, how your business strengths and weaknesses align with the capabilities most necessary to your success.
But then red flags really begin to flutter. The caterers ranked the areas of management and financial condition as highly important but gave their business only fair grades in those areas. Yikes. Plus, they found more trouble in the area of marketing.
Their plan called for expansion into new geographic areas, but current sales come almost entirely from repeat business and word of mouth. In all honesty, they had to rate their marketing capability as poor. They also decided that they were no better at R&D. No one on staff had expertise to match the aspirations of their Internet strategy.
Thanks to their findings, the caterers called a timeout to boost capabilities in key areas before proceeding with their expansion plans.
As you study your strengths and weaknesses grid, keep the following thoughts in mind:
Capabilities listed in the top left of the grid are essential capabilities and areas where you possess strong expertise — a great combination.
Capabilities at the bottom left of the grid are essential to your success, but your company is weak in these areas and, therefore, vulnerable until you beef up strengths.
Capabilities in the middle row of the grid are of medium importance to your success. The capabilities listed in the right-hand column are of minor importance. Any poor rating is cause for concern, but when your business is weak in an area of minor importance, the deficiency is of lesser concern — at least for now.
Capitalize on strengths and overcome weaknesses
After you know where your business stands on key capabilities — and which capabilities matter most to your business success — you’re in position to build on strengths and work on weaknesses.
As you write your business plan, don’t be afraid to shine a spotlight on important company strengths. After all, these strengths provide evidence that you have what it takes to succeed in your field. At the same time, acknowledge deficiencies by detailing your strategy for turning those company weaknesses around.
One more word of advice: Because your company’s strengths and weaknesses are likely to change over time, return to the grid on a regular basis to take a fresh look at where you stand.