Here at The Piranha Group, we get asked a lot to perform Opportunity Analyses for SMBs considering a new possibility. And…we see a lot of confusion as to what exactly this is and what it includes. Here are the top four simple, yet important, things to help explain what Opportunity Analysis is for a SMB, and the benefits it can bring with its completion:
- What exactly is Opportunity Analysis? At the most basic level, opportunity analysis is the process used to assess the attractiveness of a business opportunity. Opportunities needing assessment can range from the addition of the new product or line, the change/addition of a physical location, or the start of new business, amongst others.
- Attractiveness isn’t just always financial. Yes, that is a large portion of why we get contacted to take businesses through this process, but levels of attractiveness can also include opportunities such as those to improve sustainability or promote community goodwill. Usually those have an inherent financial benefit which needs to be taken into account when performing an assessment, in addition to the other aforementioned benefits. The metrics used to look at the attractiveness should link to the variables that a business would weigh when making a business decision.
- While making better decisions and optimizing the financials for a SMB is the primary outcome of having such an analysis completed, there are several secondary ones. Increasing the potential for growth of a company (more opportunities lead to increased growth potential), brand building, and taking advantage of available economies of scale are all additional benefits of regular evaluation of present and future opportunities. Additionally, avoiding an opportunity which could cause a loss of brand reputation is a valuable secondary outcome.
- How in-depth the analysis is should correlate to the risk involved with the decision. However, every analysis should take into account the elements of competition, demand, the ability to reach the intended target market, in addition to any applicable market research or internal data.
Remember, opportunities are everywhere for SMBs. The wise business is aware of them all, and makes certain that they do the appropriate evaluation in efforts to pursue the best of them.
Ready to take the next step and have us perform an opportunity analysis for your next business possibility? Click on Get Swimming with Us above, and let us know.
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