Whether you’re just starting out or have an established business, spending the time to take a hard look in the mirror is essential. An internal analysis will allow you to identify problems, solutions, and where exactly to allocate your precious resources.
When it comes to conducting an internal analysis there are many routes you can take, but two of the best ways are through either a Gap or SWOT analysis. How do you decide? It depends on your goals. Are they micro or macro?
If your goal is more singularly focused, such as increasing sales of a certain product, a Gap Analysis is the way to go.
The good news is that a Gap Analysis isn’t really all that complicated. There are 4 steps to complete that will allow you to get a plan in place to tackle a specific problem.
Step 1: Your Current State
The first step should tip you off to why this is intended for a specific goal. You might have a number of issues and departments in different states.
For this step, simply identify where you are right now, when it comes to your current goal. So, let’s expand upon our example of increasing sales for a certain product. Your current state might be how many products you sell a week, month, or year.
Step 2: The Ideal State
In the second step, you want to create a goal with something specific in mind. The goal should be measurable and not just something generic like “increase sales”. It should be “increase sales by 50% in 6 months” or “Sell at least 500 units by the end of the year”. There’s no need to come up with solutions quite yet, that comes next.
Also, some guides might tell you to shoot for the stars and dream big. However, setting an achievable goal is a much better route. This allows you to allocate more appropriate resources to the problem and will also give you a better understanding of what went wrong or right, after its all over.
Step 3: Gaps and Solutions
Now that you know where you are and where you want to be, it’s time to figure out what is stopping you from achieving this goal. This is where you can get more specific. You might also choose to implement more than one change to tackle the problem.
Is your product too complicated to understand? Some additional customer education is necessary to increase sales. Are you getting leads but no sales? Your team might need some help with learning how to close. Are customer abandoning full carts? You might want to implement free shipping or eat any additional surprise charges at checkout.
Step 4: Fill The Gaps
With all the other steps complete, the only thing left to do is create a plan to execute. This might sound like the easiest part (after all, you have all the information you need now), however, there are some important things to remember.
Like we mentioned before, your plan should have clear, actionable objectives. No flimsy, vague goals. If you need buy-in from specific people, make sure you create a timeline and clear schedule to present to them. Finally, if you are working within a team, make sure to break down who needs to do what, and prioritize what should be done first.
Looking for a more macro approach? Check out our other blog on creating an external analysis.