Assessing the Deviation

April 13, 2006

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When things don't go well for a business, there's a reason. However, it isn't always easy to figure out the reason (or combination of reasons). It could be that your business plan contains some faulty assumptions or conclusions. Or, it could be that your business is having operational difficulties of some sort. In either event, you have to isolate the cause of the problem before you can correct it. Some problems will be internal to your business, while others will result from external factors beyond your direct control.

The first thing to do is consider whether the problems you're experiencing are a result of internal factors, external factors, or a combination of both. External factors can be very widespread, such as a downturn in the entire local economy, or they can be specific to your business, such as a vendor's failure to deliver on time. Internal factors relate to the specific processes and activities that you use in running your business. An employee may not be performing as you'd like, or operating cost estimates contained in the business plan might have been too low.

In all probability, there won't be just a single root cause for your business's problems. As you look for the source of your problems, don't be surprised if you have to address several issues. The key concern is to identify all of the reasons why your business isn't going the way you'd like. Then you can consider what to do about them.