A company weakness is any resource or process that your business lacks, but needs to succeed. Weaknesses limit your company's ability to reach its full potential. Companies often analyze their weaknesses as part of a strategic planning process known as SWOT which stands for Strengths, Weaknesses, Opportunities and Threats.
The purpose of performing a SWOT analysis on your business is to bring to light the positive forces already at work and to identify areas for improvement. It’s also helpful to understand that some so called weaknesses can be natural and necessary trade-offs of your operational strategies.
Identify Financial Weaknesses
The high cost of doing business and limited cash flow are among common financial weaknesses. In some industries, you need expensive equipment, facilities and materials to operate. If your business doesn’t generate enough monthly cash inflow to overcome your costs, making a profit can be a major uphill climb.
A lack of access to loans or investors is a related financial weakness. If you can’t show a healthy, consistent cash flow, your business is not going to qualify for a loan and potential investors will look elsewhere.
Pinpoint Quality Concerns
Some companies struggle with product quality weaknesses. This can be especially concerning if you want to build your brand on the basis of high quality. Outdated technology is a common cause of quality issues. Obsolete technology can also inhibit innovation and keep you from developing products that stand out from your competitors’.
While investing in new technology is the obvious solution, this can require significant capital. Finding funding sources can be a challenge, but it’s necessary if you’re going to keep your business afloat, relevant and ultimately successful.
Expose Production Inefficiencies
Whether you manufacture or resell goods, production efficiency is critical. A manufacturer counts on efficient production to optimize profits on the sale of its goods. A weakness of low productivity may be improved with more efficient equipment or production processes. And don’t forget workforce morale.
Motivated employees can make all the difference. An under-motivated workforce may require significant changes in your company’s culture. A program of incentives when certain production goals are met won’t hurt either.
Recognize Poor Brand Image
If your brand name is unrecognized or considered weak within your target market, generating sales is going to be tough. A poor brand image can be the result of a poor product or bad customer service. It can also be that you lack a marketing budget or your promotional strategies were poorly conceived.
Social media is a huge factor in brand image: If your company hasn't reviewed its social media strategy in awhile, it's time to do so. Like yesterday.
Exploit Your Weaknesses
The good news is that once you’ve identified your company’s weaknesses, you can set about fixing them. Strengthening your image through improving the quality of your products or services is a good place to start.
If what you have to offer is better than what your competitors have to offer, you’ll see evidence of it in your revenue stream. With a stronger offering and consistent cash flow, you’ll have, or be able to get, the money necessary to buy updated equipment and hire the right people to keep a good thing going.
