The weaknesses of a business are those characteristics that place it at a disadvantage relative to others. Areas in which competitors excel over your service offerings will be viewed as weaknesses by your target market and will most likely be exploited by the competition. Markets in which you are not equipped to perform well should be avoided. If top quality service cannot be provided it’s best not to provide service at all. When identifying areas of weakness the customer can be the best source of information. The characteristics that they perceive as negatives can be the most significant barriers to success. Following are methods for identifying areas of weakness:
- Define Areas in which Improvement is Needed – Weaknesses are areas in which your competitors have an advantage. From another perspective weaknesses can be recognized as characteristics that customers view as negatives.
- List Markets or Sales you should Avoid – In any business there are markets in which you cannot compete. There can also be specific customer attributes in your defined target market in which you cannot perform well. Competing in these areas can be more of a detriment than a benefit as success may not be possible to achieve.
- Identify Areas your Target Market will Perceive as Weaknesses – The perspective of the customer is the most important factor in determining areas of weakness. Analyzing lost sales is a good source of information on areas of weakness. Prospects and customers who decide not to do business with a company and are willing to provide reasons for the decision are excellent sources of identifying areas of weakness.
- Itemize Factors that Cause Loss of Sales – Customers that decide not to buy and are willing to divulge the reasons why can be an excellent source of identifying weaknesses. Asking customers why they chose to do business with a competitor over you will provide information on areas in which improvement is needed. A sample of 25 or more lost sales will give you an idea of the most prevalent reasons for business loss.