ABSTRACT
The first step toward taking control over the direction and success of your business is to understand what actually constitutes your business, by analyzing its components and how they contribute to or detract from the whole. These are both qualitative and quantitative analyses. Only then can one decide intelligently which areas to emphasize and which to de-emphasize or even discontinue. Making such decisions imposes opportunity costs, of course, so that they must be informed and considered judgments, not intuitive ones; sometimes the correct decisions prove to be counterintuitive. The term opportunity cost is used to mean that pursuing one option necessarily means giving up the opportunity to pursue another, since no one has unlimited resources. As a consequence of deciding what your best opportunities are, you will need to assign your best people resources to these projects. The process described in the following paragraphs describes a basic set of tests concerning how your company’s resources are being applied and where you may benefit from redirecting these resources. Only after you have created such an appraisal (and the competitive analysis described later in this chapter) can you undertake to create business plans.
