Stakeholder Analysis

Stakeholders play an important role in determining the success or failure of a business. As supporters, they are critical to a business having success. When they don’t support the business, they can block the chances that it will thrive. This makes stakeholder analysis one of the keys to launching a successful business.

What is Stakeholder Analysis?
Employees, community leaders and potential customers are all stakeholders. They all have a stake in the outcome of your business, whether they support it or not. Not only do owners and employees want a business to succeed, but so do loyal customers who want the products or need the services. Of course, there are also people who won’t support the business. They can hinder the project, causing delays and leading to profit loss.

By using the views of stakeholders in the planning process for your business, you can minimize the negative opinions and build a stronger support group. Stakeholder analysis is the process of determining who the stakeholders are for your venture, identifying which ones matter the most, analyzing their views and planning for how they will impact your business in the future.

Why is it Important?
Rarely if ever does an individual make the decision to check out a new business without outside input. A recommendation from a friend, a review in the local paper or an enticing advertisement is what gets them through the front door. This is how new customers are made. For a new business that doesn’t have an established group of loyal customers, this is what keeps the power on and the employees paid. Knowing how to get those recommendations and reviews is invaluable, and can be learned through analyzing key stakeholders.

There’s also another side to stakeholder analysis. Stakeholders have a vast amount of knowledge about your community and perhaps even your industry. By building relationships with them, you can use their experience to help make your business the best it can be. Not only are stakeholders more likely to support your business and tell their friends about you, but they can actually help to make your business plan stronger. In this way, stakeholder analysis works with a double-prong approach to building your business.

How Do I Use Stakeholder Analysis?
Before you can use stakeholder analysis to strengthen your proposal, you’ll need to identify who your stakeholders are. You may think first of financial backers, ownership, management and other staff, but you’ll also want to consider future customers. Members of your target audience are also stakeholders, as are others in the community who may need your services.

Determining which stakeholders to focus on can often be the most difficult part of stakeholder analysis. Some, though, do matter more than others. Journalists, politicians, community leaders and trendsetters all have a wider reach than the average customer, so their opinions may carry more weight. Also consider those in the community who provide related services. For example, a mortgage broker would want to build a strong relationship with real estate agents who work in the area.

Finally, it’s time to get to know the most important stakeholders. Unless you can develop a relationship that allows you to understand what they want and why, you will not benefit from stakeholder analysis. Interviewing stakeholders may be time consuming, but the payoff is more than worth it. Assigning a person to manage the relationship with each key stakeholder can make this more manageable, and also make it easier to build strong, lasting relationships.

By identifying and analyzing stakeholders, you can better anticipate both successes and issues that may arise. This will allow you to maximize the successes and minimize damage done by any “learning experiences” you may suffer. By being in touch with the mindset of those who will be impacted – your stakeholders – you can greatly reduce the risks you take when it comes to business management decision.