 Tips to Identify Weak Links from Dana Penrice, Savory Institute Accredited Professional
Doing a Weak Link Analysis on each one of your enterprises is an important part of the prepatory work for your Financial Plan. It is a key tool for figuring out what you should spend your money on in order to improve the profitability and efficiency of your enterprises.
In our courses, we do a deep dive into identifying weak links in either
Resource Conversion, Product Conversion or Marketing issues. I sometimes see people getting overwhelmed when they start thinking about weak links. Looking at the business they identify all kinds of things that could be improved. Walking across the farm sometimes feels like there's an unfinished project every where you turn. How can you decide what to tackle first?
Here's a few tips that might help:
- Go through enterprise one at a time to find the weak links. Each enterprise will have one and they might be different. If the same thing is coming up in each enterprise, it is probably a Log Jam. A log jam means something is holding the whole business back and should be prioritized over everything else in your Financial Planning.
- Narrow it down to the one weakest link. A chain always has one weakest spot at a time. By focusing only on the weakest one, you'll know you are investing your money or time in the best place to improve the enterprise.
- Focus on the present. What is the weak link right now? Don't anticipate what's going to happen. We don't know what's going to pop up next, so don't get ahead of yourself. Spending money or time on anything other than the weakest link might be a waste of precious resources.
- Expenses that are addressing weak links are called ‘Wealth Generating Expenses’ because they help us to strengthen the enterprise in the most appropriate way. But the key to this is not to go out and blow all your money on the weak link. Brainstorm ways that you can address that problem in a way that best uses your time and energy.
- Once you fix the weak link, it will shift to something else. That will mean you'll need to also shift the prioritization of your expenses and adjust.
This prepatory work can help you to create a solid Financial Plan and plan for profit. Happy planning!
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