#024 Know your business environment well

Knowing your environment well: a question of survival and prosperity

Riddle: Entrepreneurs wear them often, see them very rarely, and always pay too much for keeping them. What are they?

Come on, rack your brains a little. Here is a sentence that you can read while you ask yourself the question, before revealing the answer to you.

Did you find?

After helping dozens, if not hundreds, of entrepreneurs, I've noticed that those who get hit by hurricanes of devastating trouble often wear blinders. They look straight and far ahead, and focus most of their efforts on what appears in their field of vision. They have a more or less accurate general idea of ​​their environment and spend little time renewing their perspectives. One day, the laws change unfavorably, a competitor seduces their market, their technology becomes obsolete, but still costs just as much, etc. They fall headlong into the water without having seen the storm coming.

Did you feel a slight pang in your stomach while reading this? Do you feel your blinders on the side of your head? Consider setting aside a few hours in your schedule this week and thinking about your surroundings.

Know your business environment thanks to the PESTEL Framework

The PESTEL framework is a simple memory aid telling you which elements of your environment to focus your attention on:

• Politics: government decisions that can change the laws or rules of the game in your industry.
• The economy: an overview of the macroeconomic elements (inflation, unemployment rate, growth, exchange rate, etc.) which influence consumption levels.
• Social: elements of the population such as demographics, new socio-cultural behaviors and their evolution, which can lead to new purchasing behaviors.
• Technology: innovation and technological breakthroughs that can weaken the strong position of current leaders.
• Ecology: developments in sustainable development, regulations and standards affecting the environment and ecological obligations.
• Legislation: the evolution of the regulatory and legislative framework which can have impacts on processes, administrative work, access to certain markets, etc.

When you have a good idea of ​​the positive and negative influences on your business that the different factors above can have, it is time to include them in your SWOT analysis.

Know your business environment thanks to SWOT analysis

SWOT analysis is a strategic planning technique that allows you to define your strengths, weaknesses, threats and opportunities.

You can place PESTEL elements directly into opportunities and threats. Now you can turn to your own navel and consider your own strengths and weaknesses.

Focus first on your strengths and opportunities: are there opportunities that allow you to solidly exploit your strengths? This is where there is the most growth potential for you.

Then, know that the danger lies in your weaknesses and threats: what are the threats to which you are most vulnerable?

There you go, you've just taken off your blinders. Not bad is not it?

Business model canvas

After all these thoughts, I suggest you read my blog on the business model canvas and integrate your new perspectives into your canvas.

Quickly, the business model canvas is a visual matrix made up of 9 blocks which describes the main economic aspects of a company, namely:

• Customer segment;
• Customer relations;
• Sources of income;
• Key resources;
• Key activities;
• Key partners;
• Cost structure.

Knowing your business environment well allows you to not only survive major forces, but to anticipate and take advantage of them. This is how by removing your blinders, you move towards a prosperous future.

Source: https://www.manager-go.com/