As it comes to winter and things (supposedly) slow down a little, it’s a good time to analyze and assess your business. Most of you have conducted a SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis of your business. Of course it may have been when you were creating a business plan to start your business. If that has been a while, it’s probably a good idea to do it again (include your employees in the process).
Another analysis that is beneficial to conduct is the PEST analysis. This is a broader view of things that affect your business, such as the Political, Economic, Socio-Cultural and Technological factors that need to be considered. As we all know these factors are changing constantly, though if you want to continue to be successful, it’s important to keep abreast of this information.
For example, on the Political front, the U.S., about a month ago, went through a mid-tem election. Now is a good time to figure out how the changes in local, state and federal government may change policy in your local area or on a national scale. In the beverage industry we need to pay careful attention to how changes in government may change regulations regarding alcoholic beverages.
Next up is the Economy. What is happening with your customers’ discretionary income, it is growing or becoming a smaller portion of their total income? And if you are considering expanding your reach to outside North America what are the economic factors of the countries into which you want to import products?
Socio-Cultural concerns are also important. What is the average age of your best customers and are changing attitudes within these generations likely to change your profitability? It’s also good to consider what social attitudes or taboos could affect the business.
Finally, there is Technology, which we all know is changing at the speed of light (or possibly faster). It may be time to consider what new technologies you should be using to increase business or your abilities to connect more effectively with your customers.
There are a number of other considerations for each of the factors that comprise a PEST. Let me encourage you to take some time to do a quick analysis over the winter – while things are quiet :). Or am I just being a pest?