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Running a business is an extremely tedious task. Almost always, there’s a problem or two that needs your immediate attention, and addressing these problems head-on to find their solutions is a part of the process. Luckily, there’s a tool that can help you with that: a business problem statement.
A business problem statement can help analyze the problem and come up with new and creative ways to solve it.
Essentially, it enables you to approach the problem in a more systematic, measurable, and objective way.
In this article, we will see what is a business problem statement and how you can write one yourself.
It defines the problem that a company is facing. Also, it involves an intricate analysis of the problem, details relevant to the situation, and a solution that can solve the problem. This is a simple yet effective way to present a problem and its solution concisely.
In other words, it is a communication tool that helps you visualize and minimize the gap between what’s ideal vs. what’s real. Or to put it in business lingo, the expected performance, and the real performance.
A business problem statement is a compact communication tool that helps you convey what you want to change.
Before writing a business problem statement, it is crucial to conduct a complete analysis of the problem and everything related. You should have the knowledge to describe your problem and also suggest a solution to it.
To make things easy for you, we have explained the four key aspects to help you write your business problem statement. They include:
Defining the problem is the primary aspect of a business problem statement. Summarize your problem in simple and layman terms. It is highly recommended to avoid industrial lingo and buzzwords. Write a 3-5 sentences long summary, avoid writing more than it.
Adding statistics and results from surveys, industry trends, customer demographics, staffing reports, etc., helps the reader understand the problem distinctly. These references should describe your problem and its effects on various attributes of your business.
Avoid adding too many numbers in your problem statement, and include only the absolute necessary statistics. It’s best to include not more than three significant facts.
Your business problem statement should conclude with a solution to the problem that was previously described. The solution should describe how the current state can be improved.
Avoid including elaborate actions and steps in a problem statement. These can be further explained when you write a project plan.
When you start writing your business problem statement, or any formal document, it is important to be aware of the reader. Write your problem statement keeping in mind the reader’s knowledge about the situation, requirements, and expectations.
Although intuitive knowledge does have its place, it is wiser to first consider and mention the facts you have learned based on your research and propose solutions accordingly.
A popular method that is used while writing a problem statement is the 5W2H (What, Why, Where, Who, When, How, How much) method. These are the questions that need to be asked and answered while writing a business problem statement.
Let’s understand them in detail.
A problem statement consists of four main components. They are:
Below is a common template used for writing a problem statement. It includes the four key components mentioned in the above framework.
Here are a few problem statement examples to help you understand how to write your business problem statement:
The problem of a manual auditing process affects the finance department and the staff as the process creates a lot of hassle because of the searching and verifying physical documents.
The impact of this is a lengthy auditing process where many mishaps and misplacements of documents happen. A successful solution would be to create an online database with search filters that would make it easy to find and verify documents.
The problem of an inefficient manual assembly process affects the productivity of the company, and the workers have to manually install some parts, which consumes more time.
This impacts the production goals and incremental loss for this year. An efficient solution would be to install conveyor belts to optimize the manufacturing process.
Writing a problem statement can be tricky. However, building one can help you define the problems to your business partners and find solutions faster.
It helps you present a concise yet informative description of the problem and its potential solutions. Use the above template to create a problem state for your business and eliminate the need to scour through complex documents.
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