Gap analysis – an important tool for business owners

As a business owner, you should consistently be asking yourself two questions: Where is my business now? And where do I want it to be in the future?

The first question can be answered by applying a number of processes to tally your business’ expenditure (this is usually your accountant’s job). The second question may, however, be a little more difficult to assess as it requires sound management and execution techniques.

As an owner carrying out this task, you should attempt to measure your business’ potential performance against its actual performance. A gap analysis aims to assist this process through helping you to identify different ways for allocating resources in order to maximise efficiencies as well as highlight areas for improvement.

A gap analysis is not only aimed at helping your franchise reach its potential, it is also designed to help you stay in touch with your business – something that no franchisee can afford to neglect. It is similar to the practice of benchmarking, whereby a business measures its performance against industry leaders.

However, unlike benchmarking, which typically examines quality, time and cost, a gap analysis aims to examine time, money and human resources. It is a holistic approach to breaking down business practices, functioning to provide not only internal statistics, but figures relating to the crucial supply/demand gap.

When to administer a gap analysis depends heavily on your ability to fully commit yourself and your team to the task (earlier in the year can have its advantages, though). Choose a time that’s right for your team that doesn’t distract from important work; after all, any changes affected through the evaluation will have to undergo a transitional process.

Posted by George Tarbey on 01/02/2013 at 12:00 AM | Categories:

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