Each of these has some typical strengths and weaknesses, which if not acknowledged, could cause a founder to be hindered when trying to scale. Similarly, as you grow you will see your strengths and weaknesses in the market become apparent. It is essential to understand and mitigate, rather than ignore, these strengths and weaknesses so that you select the right path for growth.

In this article, I outline the most common strengths and weaknesses of early-stage businesses to showcase the importance of regular analysis in your business in order to grow. 

Company type strengths and weaknesses

The first type is what I call an expert-run company: a company that is driven by someone from the business. For example, a trained chef has accumulated some money and decides to open a restaurant, or an IT developer starts a tech company. In this case, the company is likely to be strong in delivering the product. The food in the restaurant will be good; the code in the tech company will be well-written. That is the main strength of this type of company.

The big weakness is often in the numbers – does the company have a CFO or somebody who can properly assess and present its figures? The answer is probably no. The founder/CEO may also be acting as CFO, even though they aren’t good at numbers; or their cousin, who has a diploma in accounting, is doing the books – again, not very well, but they are free/cheap.

Another possible weakness could be sales. It is unlikely that great chefs and great coders will also be great salespeople. The company may also have operational weaknesses; rather than being a well-oiled machine, it may be generating a lot of waste in its day-to-day running.

The second type is companies built by salespeople. Think Apple and X (formerly known as Twitter). Steve Jobs was an extraordinary salesperson, as is Elon Musk. This isn’t to deny their technical skills, but above all these are people with an aptitude for sales.

These companies are usually super-efficient with strong growth, but the products they sell might not be that good (though not in the case of Apple or X, of course). Typically, tech companies started by salespeople have weaknesses in product development as well as with their numbers.

Finally, some companies are created by numbers people. These are rare because numbers people aren’t usually entrepreneurs.

These three company types mirror the three ‘legs’ of a company: operations, sales and numbers. As you can see, for most companies at an early stage, their big weakness is the numbers. This is something I notice in virtually 100% of my clients. At best, they have semi-decent numbers; at worst, they have no idea what is going on in their company. You would be surprised by how often that is the case.

Market strengths and weaknesses

When assessing your strengths and weaknesses, the first things to focus on are operations, sales and numbers. However, you must also assess your strengths and weaknesses in the market. Are you selling a ‘me too’ product? In other words, are you selling something that lots of other companies are selling, but just a little bit better or just a little bit cheaper?

Often, companies consider their great strength to be that their prices are cheaper than the competition. For me, this is not a strength at all because, as soon as the company starts to grow, the price advantage disappears. Take, for example, a painting business. The painter who started it is amazing and can paint twice as fast as any other painter, so he can be cheaper. That is his big strength. However, the minute he hires a second painter, who is slower than him, his advantage begins to evaporate. Or think of a solicitor who starts off working from home. She doesn’t have to pay for a fancy office or a secretary, so she can be cheaper than her competitors. However, as soon as her business grows, these advantages disappear. If your main strength is that you are cheaper, unless this is because of something that is (permanently) unique to your process, it is usually not a good competitive advantage to rely on.

Your strength might be that your product is better than your competitors, but the same principle applies. One of my clients is an amazing electrician. He is much better than most other electricians are, so he can charge more. However, will that advantage grow with his business? No, because he will have to take on other electricians, who might not be as good as he is.

Your company might have a USP: it does something that nobody else can do, either because it was the first to do it and has some kind of protection over the product or process, or because it has a (secret) technological advantage. This, unlike price and quality, is a genuine strength, so if you don’t have a USP, you might want to create one. For example, going back to my electrician, we realised that he had no USP. However, part of his job was installing solar panels, so I put him in contact with an Australian company that makes software for solar panels that would give him a USP in the British market.

Strengths and weaknesses form part of a traditional SWOT analysis, and you might also like to assess your company’s opportunities and threats. Don’t, however, make a long list of SWOTs. As John Argenti memorably put it, ‘You’re hunting strategic elephants, a rare species.’ The idea of ‘elephant hunting’ in regard to a SWOT analysis is that you isolate the two or three most important items in each category, which are your ‘elephants’ – the things you should focus your attention on.