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Business Problem Statement Explained with Examples

Free Problem Statement Templates

Ayush Jalan

January 2, 2024

Business Problem Statement_ Explained with Examples

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.

You may know how necessary it is to write a business plan for your company. What you may not know of, however, are the tools and techniques that can help you solve your business problems .

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.

Table of Contents

What is a business problem statement?
How to write a business problem statement?
How to Develop a Business Problem Statement?
Business problem statement framework
Business problem statement templates
Business problem statement example

In this article, we will see what is a business problem statement and how you can write one yourself.

What Is a Business Problem Statement?

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.

How to Write a Business Problem Statement?

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:

1. Define the problem

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.

2. Provide the problem analysis

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.

3. Propose a solution

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.

4. Consider the audience

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.

How to Develop a Business Problem Statement

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.

What: What is the problem that needs to be solved? Include the root cause of the problem. Mention other micro problems that are connected with the macro ones.
Why: Why is it a problem? Describe the reasons why it is a problem. Include supporting facts and statistics to highlight the trouble.
Where: Where is the problem observed? Mention the location and the specifics of it. Include the products or services in which the problem is seen.
Who: Who is impacted by this problem? Define and mention the customers, the staff, departments, and businesses affected by the problem.
When: When was the problem first observed? Talk about the timeline. Explain how the intensity of the problem has changed from the time it was first observed.
How: How is the problem observed? Mention the indications of the problem. Talk about the observations you made while conducting problem analysis.
How much: How often is the problem observed? If you have identified a trend during your research, mention it. Comment on the error rate and the frequency and magnitude of the problem.

Business Problem Statement Framework

A problem statement consists of four main components. They are:

The problem: The problem statement begins with mentioning and explaining the current state.
Who it affects: Mention the people who are affected by the problem.
How it impacts: Explain the impacts of the problem.
The solution: Your problem statement ends with a proposed solution.

Business Problem Statement Templates

Below is a common template used for writing a problem statement. It includes the four key components mentioned in the above framework.

Template 1:

Template 2:.

Business Problem Statement Examples

Here are a few problem statement examples to help you understand how to write your business problem statement:

Example 1: A problem statement by a software company

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.

Example 2: A problem statement by a manufacturing company

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.

Solve Problems Faster with a Business Problem Statement

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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About the Author

Ayush is a writer with an academic background in business and marketing. Being a tech-enthusiast, he likes to keep a sharp eye on the latest tech gadgets and innovations. When he's not working, you can find him writing poetry, gaming, playing the ukulele, catching up with friends, and indulging in creative philosophies.

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50 Business Problem Statement Examples [+Tips To Write]

Editorial Team

Whether you are a budding entrepreneur or a seasoned one, you need to have insights into what a problem statement for a business is, its examples, how to write it, and any other information about it.

When workplace staff members and departmental teams express initiative in solving problems, they demonstrate competence in handling complex and unanticipated challenges at work. Businesses rely on individuals and teams that can effectively analyze challenges and propose working solutions.

In this article, we offer tips on how to generate problem statements, with 50 comprehensive business examples you can use for reference.

What’s The Meaning Of A Problem Statement?

A problem statement summarizes a challenge that needs timely intervention to help improve a situation. It summarizes the problem in business, why it is a problem and how to address it. Businesses thrive when they can solve potential and existing customers’ issues.

Pointers On How To Write A Problem Statement

A problem statement must be accurate and precise. There are vital components to consider when crafting a problem statement that can positively impact a project’s outcome. These include:

1. A Description Of How Things Should Work

First, provide some context that will make it easier to understand the problem by explaining how this process is supposed to function and work. Mention the problem while keeping the end-user in mind.

2. An Overview Of What The Problem Is And Explaining Its Impact

A practical problem statement should address a problem stating what it is, why it is a problem, and the benefits of solving it. It reveals who the problem affects and why it needs fixing. You could indicate any attempts you have undertaken to fix the problem and why those attempts did not work. Explain in detail your understanding of the problem at hand. Usually, fixing a problem in a business setup will help improve efficiency in the workflow processes, save time, minimize the wastage of resources, and impact the cost.

3. An Explanation Of The Cost Implications

When you explain the problem to critical stakeholders, mention the cost implications of not addressing the issue. Entrepreneurs understand the money language better, so framing the problem and projected solution regarding financial consequences is easier. Try to be specific by pinpointing exact figures of how much the business will lose if the issue remains unresolved and how much the business will save by implementing a workable solution. The problem of wasting resources or preventing the company from maximizing profits should reflect in the problem statement.

4. Evidence To Support Your Theory

After stating the financial implications, you need to support your claims with evidence if the stakeholders are to take you seriously. You must conduct comprehensive research, cite your sources, and give practical examples. You must have relevant data to present if the need arises.

5. Suggestions For The Solutions

A problem statement should propose a detailed solution to the problem. At this juncture, you need to have a firm grasp of where the challenges are arising from and offer practical approaches to mitigate them. You must outline your objectives by suggesting an ingenious strategy for addressing challenges.

6. Benefits Of Your Suggested Solutions

After pinpointing the problem:

Explain the ramifications of not fixing these setbacks and propose appropriate solutions.
Demonstrate this by focusing on efficiency and the financial impact the solution will have helps convince stakeholders of the viability of the problem statement.
Comprehensively outline how the solution will impact finances by increasing revenue streams, reducing expenses, improving productivity, saving time, and increasing profit margins.

7. A Summary Of The Problem And The Expected Solution

In conclusion, you must summarize the problem, explain why it needs fixing, and provide an overview of why your solution is the best.

50 Business Problem Statement Examples

1. social media channel.

While Mark Zuckerberg was studying, Harvard had its version of Facebook. Though it was possible to search other students’ profiles on the university wall, it was not possible to interact and perform any social interaction by liking, commenting, or networking.

Problem: The logistics of trying to connect, network, and interact with like-minded friends without physically having to travel.

“Human beings are social beings. They would love to interact and network with people in faraway places without physically traveling. People love to socialize but hate having to spend to do it.”

Solution: Facebook allows its audience to search and network with like-minded individuals.

2. Manufacturing

Problem: An inefficient manual assembly process that consumes plenty of time affects productivity as employees have to spend hours manually installing machine parts. The long delays negatively impact production goals as you could spend that time developing products is spent fixing faulty machines.

Solution: Automating assembly processes and installing conveyor belts to optimize manufacturing workflows.

Problem Statement: Rigorous labor-intensive processing due to manual paperwork management.

3. Streaming Entertainment Service Company

Netflix, Hulu, and other streaming services came to solve the problem of people having to go to video stores to rent movies. They did this by trying to eliminate video stores and delivering movies to customers allowing them to keep those movies for as long as they needed. For this, their problem statement would be similar to this one:

“Clients detest going to a video store. They don’t like traveling back and forth and they hate paying late fees even more.” An interpretation of the problem statement is:

Problem: Going to the store entails fighting through traffic and waiting in queues for your turn to get the movies you want.

Solution: The streaming service allows customers to enjoy numerous movies streamed directly to their mailbox. In this short statement, you have given an investor a simplified view of the problem and its solution. Grand problem statements focus on issues so the audience can identify with that problem and appreciate the solution the business is trying to come up with.

4. Software Company

Problem: Manual auditing delays processes in the finance department due to the cumbersome process of verifying and counterchecking financial statements, searching for documents for reference, and manually collaborating with different teams is negatively affecting productivity. The lengthy auditing process leads to many errors where documents get misplaced or lost, and it takes a lot of time to locate and retrieve them.

Solution: An online database with search filters that simplifies the process of searching for documents.

5. Busy Office

Process: Forms for different functions like annual, sick or emergency leave need to be filled by employees for review and management approval. Human resource teams must scrutinize the forms, verify, scan, and upload them to the system. After that, the papers move to the finance department for manual re-entry, and payroll preparation begins.

Problem: Overdependence on the manual system leads to irregularities, delays, omissions, and mistakes in service delivery to employees and vendors. This promotes a poor organizational response to arising issues and wastes precious time trying to identify and correct errors.

Solution: Automating repetitive processes to help teams concentrate on the core business.

6. Engineering

Problem: Manual transportation of machine parts from one assembly line to the next, leading to inefficiencies making it impossible to meet the yearly production goals despite hiring additional staff.

Solution: To minimize manual transportation of machine parts and increase reliance on mechanical robot arms and conveyor belts that appear between assembly lines. Such a move will prevent employees from walking back and forth across the assembly lines.

Problem Statement: Employee Efficiency to Improve Productivity

7. Healthcare Center

A medical facility operates 24/7 as patients need care round the clock.

Problem: There’s an insufficiency of medical personnel, especially on the night shift, which presents challenges during emergencies. Unfortunately, patients must wait hours for medical assistance, leading to inefficiencies.

Solution: The hospital must always have a medic on call to handle each department to prevent patients from being stranded during emergencies. Hiring part-time staff for the night shift will help alleviate the problem.

8. Cosmetics

Problem Statement: Customer dissatisfaction with skin care products for Caucasian skin

Problem: Customers complain about the harshness of the sunblock cream.

Impact: Mistrust and suspicion about the quality of the products.

Solution: Product recall as it needs more analysis and tests.

9. Ecommerce Business

Problem Statement : Sales Quote Output

The quote generation display is critical as sales teams must swiftly generate quotes for customers to make their payments on time.

Problem : The quote generation display in the sales app is faulty, with sales teams complaining that the screen is prone to errors and consumes plenty of time to make it function. These issues have led to lost productivity in the sales department.

Solution : The department needs app improvements by replacing or upgrading existing software.

10. Business Startup

Problem Statement : Inefficient customer data security

Problem : storing customer data in separate data stores with questionable encryption security practices presents operational risks and substantial reputational challenges.

Solution : Enlist the services of an IT expert to help improve the process of storing customer data.

11. Consultancy Firm

Problem Statement: Sales Software Outage

Problem: Collapsing of the manual and automatic communication software for an extended period causes a communication breakdown. One section of the app experienced an outage that the mechanical system failed to pick up. Technicians tried the manual option but experienced error notifications a couple of times. The manual and automatic processes could not redirect calls to the API in a timely process leading to miscommunication and a loss in productivity. The setback arose during core business hours which had a massive negative impact on sales.

Solution : The outage could have been managed if the problem had been detected with API calls being redirected to a different location.

12. SaaS Company

Problem : Users of our software have challenges using it as they have to manually transfer information into the CRM after sending proposals. They need the CRM to track emails, phone calls, and other conversations that involve customer interactions. Without CRM integration, the software causes a frustrating experience for software users.

Solution : Send segmented surveys to determine the most effective CRMs to integrate and customize these integrations to improve user experience.

Problem Statement : Saas platform with an AI assistant for recruiters.

13. Recruitment Firms

Hiring teams experience numerous repetitive hiring tasks, including vetting applications, scheduling or rescheduling interviews, handling cancellations, responding to concerns, and shortlisting applicants at various application stages.

Problem: Plenty of tedious, monotonous manual work takes away the joy of meeting and assessing applicants that perfectly fit job descriptions.

Solution : Utilizing artificial intelligence technology or software applications that automate these processes.

14. Employee Management

Problem: Our organization needs a more secure way of onboarding and offboarding employees because the current system is cumbersome. Hiring managers have to depend on security teams to perform the same tasks.

Solution: automating repetitive onboarding and offboarding processes.

15. Learning Institutions

Problem Statement: Motivation for resolving tech issues Our school needs a work-from-home policy that allows staff to operate remotely.

Problem: Our inexperience is causing us anxiety as we may lose competent staff to our more organized competitors.

Solution: provide our teams with adequate tools and devices to protect the security of our data when staff operate remotely. We must provide secure access to cloud computing software and communication channels like Zoom or Microsoft Teams. Learning to use collaboration software will be a mandatory skill for staff.

16. Real Estate

Problem: Despite our real estate company’s decision to benchmark for free trial sign-ups that have remained steady, our paid subscriptions declined in the last few weeks. This means our business isn’t experiencing a traffic setback but a conversion challenge caused by a rise in mortgage interest rates, widespread economic challenges, pricing, and workflow processes.

Solution: Restructure the free trial to offer less value because users gain too much from the free plan, which prevents them from signing up for a paid plan. Currently, users must sign up for a paid plan to access leads of real estate deals. We should also upgrade our software to include additional features that will retain investors on our platform.

17. Software Application

Problem: Users of our newspaper app avoid sharing content through the app and instead export the content from the app. This poses a challenge in our marketing strategy because potential customers need to be made aware that the content shared originates from our app leading to lower conversion rates. It also poses a challenge for app users as exporting range is time-consuming and could decrease app usage.

18. Sales Strategies

Problem: Sales reps conduct manual planning using Excel spreadsheets and typed printout lists. They need more time which leads to difficulty in meeting targets. It also causes challenges in knowing which targets to visit, which affects sales and the inability to meet set goals.

19. Customer Care

Problem: customers call the contact center seeking updates on their applications. Due to the vast volume, many applicants wait long hours to speak to an agent because the call center is understaffed. Employees are ill-equipped and lack adequate access to applicants’ track records, further compounding the backlog. The outcome leads to a frustrating experience for both applicants and staff.

Problem Statement: Using project management software for collaboration improves efficiency and productivity.

20. Problem: Communication breakdown caused by overreliance on an inefficient manual system.

Solution: Introducing technology by integrating a reliable project management system.

21. Problem Statement: Stay-at-home-mums need an avenue to feel connected to a support group as they spend long periods alone.

Solution: An app or social media channel where these mums can interact and network while attending to their babies.

22. Digital Transformation

Problem Statement: Customers need a solution to help them create websites without overreliance on IT experts.

Problem: People detest contacting IT specialists as the process is cumbersome.

Solution: Apps that offer guidance to web users in creating simple websites.

23. Agricultural Firm

Problem Statement: Preserving perishables to minimize wastage.

Problem: Though Jack& Jill Farms provides products to many supermarkets across the country, they consistently experience a loss due to their limited storage capacity and the fact that most of their products are highly perishable.

Solution: Maintain an efficient supply chain to guarantee a ready market once the product leaves the farms. The firm must invest in modern storage facilities to improve preservation and shipping.

24. Waste Management

Problem Statement : Conduct a study on the proper waste management system.

Problem: Manufacturing firms in my area are releasing industrial chemicals into the river leading to environmental degradation.

Solution: Present a research proposal to the city authorities requesting permission to conduct a proper waste management system analysis and devise a viable solution.

25. Virtual Assistant

Problem: Challenges onboarding new clients, which lead to prolonged periods of idleness and a struggle to meet basic needs

Solution: Integrating new technology in marketing and creating awareness for the business.

Conclusion

Every successful company starts by creating a solution to a need, an important reason your business needs to have a problem statement. The better you articulate the problem, the more treasured your solution will be. Most companies make the mistake of not giving the problem as much importance as the solution. Instead, many entrepreneurs concentrate on the solution and completely forget to explain why the problem is essential. Before your business markets a solution to a problem, make sure your clientele is aware of the problem your business is solving, which is made clear through your problem statement. Comprehensively articulating a problem statement help in improving the effectiveness of your business.

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Effective Problem Statement Examples in Business

Learn about problem statements and why they are so important for your business.

Every great company started by solving an important problem. The more effectively you articulate a problem, the more valuable your solution will be. This is why your business plan needs to have a problem statement.

A common mistake businesses make is that they do not give the problem as much importance as the solution. Instead, most business owners get excited about the solution — but in doing so, they tend to forget to explain why the problem is important.

A well-articulated problem gives your solution more value. It makes your entire plan 10x more effective.

This article takes a look at what a problem statement is. It also includes problem statement examples, how to write an effective problem statement for your business, and more.

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What is a problem statement .

Ultimately, most business owners want their company’s products or services to solve a problem for their core customers.

That means your problem statement is the heart of your concept. It is the very thing that gets people interested in you and your business. Eventually, it becomes the focal point.

Put simply, a problem statement defines a problem and identifies what a solution would look like. But to build a good case for the problem is to not just state the problem. You should also build an engaging story around that problem — one that people can relate to.

Purpose of a problem statement

Problem statements are important to businesses, individuals, and other entities because they help keep the entire team focused on solutions. Problem statements are also important for these reasons:

First, they allows you to identify and explain the problem in a concise but detailed way. This gives the reader a comprehensive view of what's going on. You can identify who the problem impacts, what the impacts are, where the problem occurs, and why and when it needs to be fixed.
They clarify what the expected outcomes are. When you establish what the desired situation looks like, it helps give an overarching idea about the entire project. The proposed solution, scope, and goals of the solution are all made clear through the problem statement.
They act as a guide, helping you navigate your business and can help your team remain focused. You'll find that you'll come back to your problem statement from time to time to ensure the solution has been implemented and that it does indeed solve the initial problem.

A great problem statement will help to ensure that all objectives of your business are being met.

Examples of problem statements in business

There are tons of successful examples of problem statements from various companies. Let's take Netflix for example. They solved the problem of having to go to the video store to rent movies.

Netflix originally eliminated the need to go to the video store by delivering movies in an envelope to your mailbox. This allowed people to keep the movies for as long as they'd like.

At that time, the use case for Netflix was something like this:

"Going to the video store is a pain. People don't like traveling back and forth just to rent a movie and they hate paying late fees even more."

A simple interpretation of Netflix's problem statement would be:

Problem: "Going to the video store requires fighting traffic, wandering the aisles,, and waiting in long lines just to get a single movie."

Solution: "Netflix allows anyone to enjoy thousands of titles streamed directly to their home or delivered to their mailbox."

As you can see in just two sentences, you have given a potential investor an easy problem/solution statement. This example of what Netflix's problem statement would have looked like is simple, yet it gets straight to the point.

A good problem statement will solely focus on the problem. This allows the audience to build a powerful case for the problem and accept the solution you are trying to provide.

Another example problem statement is from Facebook . Harvard had its very own version of Facebook when Mark Zuckerberg was a student. Zuckerberg's frustration was that "he could only search and look at people's information on the university's version of Facebook and not perform any sort of social interactions like liking, commenting, etc."

This was when he came up with the idea to create a new platform. He hoped to create something new that allowed users to search for people according to their interests. Users would also be able to create an online network of friends and study groups.

Facebook’s problem statement would have probably said something like:

“A lack of social interaction among a group of people who share common interests/attributes is a waste of time. People cannot create strong connections without interacting with each other.”

A simple interpretation of Facebook’s problem statement would be:

Problem: Connecting with others and being able to comment or like their posts, etc., can have an adverse effect on making strong connections with like-minded people.

Solution: Facebook allows you to connect, create strong connections and interact with people with similar interests.

Key elements of a good problem statement

There are certain key elements to a good problem statement. These include:

Ideal situation

Your problem statement should outline what the ideal situation would be if there wasn't a problem that needed your attention. This is where you will identify the goals and the scope of the project. This section needs to give a clear understanding of what the ideal scenario will be once the issue is resolved and what your business can do to solve the issue.

Moving on, your problem statement should concisely describe what the current reality is for your business. Here, you will identify the problem, state why it's a problem, and identify who the problem is affecting. Moreover, this section will also describe when and where the problem was identified. All in all, this section is basically a scenario analysis.

Consequences

At this stage, your problem statement needs to identify the consequences of the problem. It should outline how people affected by the problem are being impacted and quantify how much the problem is impacting them. Some common consequences may include the loss of time, money, resources, competitive advantage, productivity, and efficiency.

This section of your problem statement may include a few possible solutions to the problem. It is important to not identify a specific solution. The purpose of this section is to guide the business team on how to research, investigate and resolve the problem.

How to write a problem statement

When writing a great problem statement, there are a few things to keep in mind. Here are some tips to follow when writing a problem statement for your business:

Describe the ideal situation you aim to achieve

To get started, try to provide some context that will make it easier to understand the problem. Begin by explaining how the particular process should work. Before mentioning the problem, try to describe how the process would function if the current problem didn't exist. Be sure to keep the end-user in mind.

Let's say you have an idea of how to increase efficiency in a process to maximize the best use of resources. You can start describing a theoretical situation whereby the system is far more efficient and work towards your proposal from there. Just keep in mind who, what, where, and why so that you can stay on point.

Choose the biggest problem to solve

Oftentimes, you may find that your products or services can solve multiple problems. However, when defining your problem statement, focus on the biggest problem you can solve.

If you are going to be pitching to investors, keep in mind that they won't be able to remember all of the problems. They're most likely to remember your products/services that can solve their biggest problem.

Consider audience's needs

Be sure to review reports and talk to your employees to fully understand the scope of the problem. Their problem-solving skills can come in handy.

Take into consideration the needs and experiences of your audience when writing problem statements. People will relate to you and your problem statement if they have experienced something similar.

Furthermore, the vision for your product or service should be the same as well. The more your target audience relates to your story, the better they'll understand and connect with it.

Provide facts about the problem

Most business problem statements are backed by surveys or statistics. Your business's problem statement can include references to internal or external reports, staffing reports, statistics, customer demographics, national trends, etc. Of course, what you include depends on the problem you're solving.

Try to avoid adding excess numbers and irrelevant information. Ensure that you only include key statistics and solid data that highlight the severity of the problem.

Explain the benefits of your proposed solution

At this point in your problem statement, you've described the ideal situation where the problem doesn't exist. You've also pointed out the problem, explained what the consequences are if they're not fixed, and proposed solutions.

It is now time to explain the benefits of your solution. Focus on the efficiency and the financial impact of your solutions. Talk about the financial costs your solution will decrease and how your solution can free up revenue streams. You can also address the intangible benefits of your solution like increased client satisfaction.

If you need help solving business problems of your own, or you want to step up your marketing efforts, contact the team at Scorpion. We have helped thousands of home services , legal , franchise , and other small business professionals grow their businesses.

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Mastering the Art of Business Problem Statements: A Comprehensive Guide with Examples

Why is the business problem statement is important.

The business problem statement provides the impetus for a business initiative in practical business related terms. It is a description of an issue currently existing and the context for how it will be addressed.

In a business setting, anyone who is involved in problem-solving or decision-making should be involved in developing a business problem statement. This could include managers, executives, analysts, project managers, or subject matter experts.

Typically, the responsibility for developing a problem statement falls on the person or team that is leading the effort to address the problem. This may be a project manager, a cross-functional team, or an individual responsible for a specific area of the business – including the Business Analyst!

In some cases, it may be appropriate to involve external consultants or experts in developing a problem statement. This can bring fresh perspectives and specialised knowledge to the problem-solving process.

Ultimately, the goal is to involve all relevant stakeholders in developing a problem statement to ensure that the problem is fully understood and the proposed solutions are feasible and effective.

Developing a business problem statement is important for several reasons:

Clarify the problem: Developing a problem statement helps you to clarify and define the problem you are trying to solve. This can help you to focus your efforts on the key issues and avoid wasting time and resources on non-essential tasks.
Identify the root causes: A well-crafted problem statement can help you to identify the root causes of the problem. This is important because it allows you to develop effective solutions that address the underlying issues rather than just treating the symptoms.
Communicate with stakeholders: A problem statement provides a clear and concise summary of the problem and its impact. This can help you to communicate effectively with stakeholders and get their buy-in for your proposed solutions.
Measure progress: A problem statement provides a baseline for measuring progress. By defining the problem and its impact, you can track your progress over time and determine whether your solutions are effective.
Prioritise resources: A problem statement can help you to prioritise your resources and focus on the most critical problems. This is especially important in situations where resources are limited, and you need to make strategic decisions about where to allocate your time and money.

Developing a business problem statement is essential for effective problem-solving. It helps to clarify the problem, identify the root causes, communicate with stakeholders, measure progress, and prioritise resources.

When to Develop Problem Statements

You can develop a problem statement whenever you need to identify and analyse a problem, and develop solutions to address it. Some specific situations where this can occur include:

Project initiation: When starting a new project, a problem statement template can be used to define the scope and objectives of the project, and identify potential risks and issues that may impact the project’s success.
Process improvement: When looking to improve a business process, product, or service, a problem statement template can be used to identify and analyse the root causes of the problem, and develop solutions to address them.
Research projects: When developing a research project, a problem statement template can be used to formulate research questions, and identify the gaps and limitations in existing literature or data.
Policy development: When developing policies and programs to address social, economic, or environmental issues, a problem statement template can be used to identify and analyse the policy issue, and develop evidence-based solutions.
Strategic planning: When developing a strategic plan for an organisation, a problem statement template can be used to identify and analyse the challenges and opportunities facing the organisation, and develop a roadmap for achieving its goals.

Overall, you can use a problem statement template whenever you need to identify and analyse a problem, and develop solutions to address it. Categorisation will help you develop a structured, consistent, and efficient approach to problem-solving.

Categorisation of Business Problem Statements

There are several ways to categorise business problem statements, and the specific categories may vary depending on the organisation or industry. Here are some common ways to categorise business problem statements:

Functional area: Categorise the problem statement based on the functional area of the business that is affected. For example, problems related to marketing, finance, operations, human resources, or information technology.
Customer impact: Categorise the problem statement based on the impact on customers or clients. For example, problems related to customer satisfaction, retention, acquisition, or loyalty.
Business process: Categorise the problem statement based on the business process that is affected. For example, problems related to supply chain management, product development, sales, or customer service.
Strategic priority: Categorise the problem statement based on the strategic priority of the organisation. For example, problems related to growth, innovation, cost reduction, or risk management.
Industry or market: Categorise the problem statement based on the industry or market in which the business operates. For example, problems related to competition, changing customer needs, or regulatory compliance.
Business architecture. Categorise the problem statement based on capabilities to help you understand business capability maturity, the impacts on change, and opportunities for improvement. See below for categories.

By categorising business problem statements, you can better understand the scope and nature of the problems and develop targeted solutions that address the root causes of the problems. This can help to improve the efficiency and effectiveness of your problem-solving efforts.

Business Architecture Categories

Problem statements can be described in a single statement followed by a real example to emphasise the issue. When developing an understanding of the problems to be resolved think across the seven broad areas shown below and ask questions accordingly. Examples are given for each category using the architectural approach with the capability subsets of: strategy; service/products, people; processes; applications; information, and infrastructure.

1. Strategy

Poor alignment with business objectives.
Initiatives are currently not aligned to an overall vision.
Siloed implementation of projects.

2. Service / Products

Impediment to service delivery due to untimely retrieval of information.
Slow responsiveness in engaging sales leads due to untimely retrieval of information.
High level of product returns due to errors made on sales orders.
Inadequate training of staff and/or lack of capacity for staff to support areas of the business experiencing bottlenecks.
Poorly defined roles and responsibilities creates confusion and poor responsiveness to operational demands.
Poor service delivery due to staff capacity and training issues.

4. Processes

Myriad of duplicated business processes and applications.
Intensive manual processing due to physical handling of paperwork, mail outs and manual coordination of events.
Double data entry and manual maintenance of data in spread sheets or personal databases.

5. Applications

Poorly developed functionality due to inadequate definition of business and functional requirements.
Out of date functionality caused by a constantly evolving business climate.
Little or no application support due to proprietary or redundant software.

6. Information

Unstructured information and content stored on various devices making search and retrieval very difficult.
No metadata attached to information making search and retrieval difficult.
Disparate methods of coding the same types of datasets in disparate repositories.

7. Infrastructure

Not a lot known about all systems making the strategic coordination of maintenance difficult.
Multiple applications are supported on multiple systems creating unnecessary maintenance overheads by supporting duplicate systems.

When you have understood problems, describe the risks associated with each to fully emphasise the potential impacts on the business (e.g. costs, inefficiencies, and lost opportunities).

A Problem Statement Example in Business

Below is an example describing a problem statement, description and associated risk for a highly manual business process that can easily be resolved with technology.

Problem Statement: Intensive manual processing due to physical handling of paperwork. Description : Annual leave forms are typically filled out by the Employee, printed, sent to the Manager/Delegate for approval, sent to Human Resources for verification and data entry, scanned and uploaded to the EDRMS, and then sent to Payroll for (re) data entry. Risk : This highly manual scenario leads to ‘bottlenecks’ in service delivery and promotes the risk of poor organisational response to business and lost time that should be spent carrying out core business.

Tools for Developing Problem Statements

To develop the problem statement and associated risks of a project, engage with managers and subject matter experts within the relevant business areas. Ask them questions specific to your categorisation approach to bring out the details of where the problems lie. This approach can be implemented in the project’s initial set up and analysis phases irrespective of the methodology (i.e., Agile or Waterfall) being utilised. It is useful for developing project mandates and business cases.

There are several tools you can use to write a business problem statement, including:

Brainstorming: Gather a group of stakeholders or team members and brainstorm all of the potential problems facing the business. Narrow down the list to the most pressing issues and identify the root cause of each problem.
SWOT analysis: Conduct a SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats) to identify the internal and external factors impacting the business. Use this analysis to pinpoint the key problem areas.
Fishbone diagram: Use a fishbone diagram (also known as an Ishikawa diagram) to identify the potential causes of a problem. This tool can help you visualise the different factors contributing to the problem and narrow down the root cause.
5 Whys: Ask “why” five times to get to the root cause of a problem. This technique can help you dig deeper into the underlying issues and identify the root cause of a problem. The Five Whys is an excellent technique to support your questioning approach.
Problem Statement Template: Use a template to guide you through the process of writing a problem statement. A good problem statement template will prompt you to identify the problem, the impact it’s having on the business, the root cause, and potential solutions.
Consult an expert: If you’re struggling to identify the problem or need help framing it in a concise and clear manner, consider consulting an expert in business analysis or strategy. They can provide valuable insights and guidance.

Specific Steps in Developing Problem Statements

Here are some steps to help you develop a problem statement:

Identify the problem: Start by identifying the problem you want to solve. The problem should be specific, measurable, and relevant to your goals or objectives.
Understand the context: Gather information about the problem and its impact. This could include data, research studies, reports, or input from stakeholders.
Define the problem: Clearly define the problem by breaking it down into its key components. Use one of the tools mentioned above to get a comprehensive understanding of the problem.
Analyse the problem: Analyse the problem by identifying the root causes, the impact on stakeholders, and the potential consequences of not addressing the problem.
Create a problem statement: Use the information gathered in the previous steps to create a problem statement that summarises the problem, its impact, and its root causes. The problem statement should be concise, clear, and focused on the key issues.
Refine the problem statement: Review and refine the problem statement to ensure that it accurately and clearly describes the problem and its impact. Refine the language, structure and categorisation as needed.
Validate the problem statement: Validate the problem statement by testing it with stakeholders and subject matter experts. Get feedback on the clarity, accuracy, and relevance of the problem statement.

By following these steps, you can develop a problem statement that provides a clear and concise overview of the problem and its impact. This will help you to focus your efforts on developing effective solutions that address the root causes of the problem.

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PROBLEM STATEMENT

Learn everything you need to know to develop a Problem Statement by an Ex-McKinsey consultant . Includes best practices , examples, and a free problem statement template at the bottom.

“A problem well stated is a problem half solved.”

– Charles Kettering, Early 1900s American Inventor

I remember my first day on my first project at McKinsey, the partner got the team in a room for us to spend a few hours “defining the problem statement.” At first, I thought to myself, “man, what a dumb idea…this client is paying us millions of dollars, and we don’t even know what we are trying to solve?” But, as we started to debate the context of the client, the issues they faced, and the reasons why they brought us on, I started to appreciate defining the problem statement and the ability for the right problem statement to frame and focus problem solving .

What is a problem statement?

A problem statement is a clear description of the problem you are trying to solve and is typically most effectively stated as a question. Problem statements are subtly critical in effective problem solving. They have an uncanny ability in focusing the efforts of brainstorming , teamwork, and projects .

To understand this better, let’s go through some examples of how you can position a brainstorming session on various topics.

Beyond brainstorming, problem statements should be used at the beginning of any project to frame and focus on the problem. A good problem statement defines the “who” the problem involves, and defines the scope of the problem. Since problem statements guide much of the problem solving of a project, it is important not to be too narrow or broad with the problem statement.

How do you create an effective problem statement?

As stated before, every McKinsey project starts with the development of a problem statement. Once we landed on a strong problem statement, then we had to align the client with the problem statement. The easiest way for a project and team to get off track is if the team and the client are trying to solve different problems. A good problem statement aligns the expectations of the client with the team’s activities and output.

Here are the best practices when creating an effective problem statement:

Use the 5 Ws and one H

One of the most useful tools when developing a problem statement is the 5 Ws and one H, which is simply utilizing who, what, why, where, when, and how questions to frame the problem statement. Simply thinking through these questions as they relate to the problem can help you create a strong problem statement.

Ask the most crucial question, “What are we trying to solve?”

We’ve all been in those brainstorming sessions, meetings or on those projects, where you’re just scratching your head, as the conversation or directions are more like an Olympic ping-pong match going from one topic to the next. The most effective question that I’ve used in over a thousand meetings and conversations is simply “what are we trying to solve?” It cuts through the clutter, confusion, and misalignment, and quickly centers the focus and energy of everyone.

Frame the problem statement as a goal

Some of the best problem statements are simply goals formatted as questions. If you need to increase sales by 10%, a good problem statement is, “Within the next 12 months, what are the most effective options for the team to increase sales by 10%?”

Force the prioritization

Often, the most effective problem statements force the prioritization of issues and opportunities. Using phrases such as “the most important for the customer” or “the best way” will force prioritization.

DOWNLOAD THE PROBLEM STATEMENT POWERPOINT WORKSHEET

To get you going on defining a strong problem statement, download the free and editable Problem Statement PowerPoint Worksheet.

Correctly defining a problem statement at the beginning of a project or initiative will dramatically improve the success of the project or initiative. Problem statements help guide problem solving, analysis , hypotheses , and solutions.

Developing a problem statement is an iterative brainstorming process. Get the major stakeholders in a room for a few hours and start the process by having everyone write down what they think the problem is on index cards. Collect the index cards and post them on a whiteboard. You can either discuss each one or have the group pick the top 3 and then discuss them. You can use the Problem Statement Worksheet to further define the problem by answering the 5 Ws and 1 H. The key is to find the right problem statement all stakeholders feel strongly about, in that, if the problem statement were solved, the problem would be solved.

NEXT SECTION: HYPOTHESES

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Problem Statement Templates and Examples for Businesses

For a startup, your problem statement serves as a clear and concise declaration of the core issue your venture aims to resolve. It outlines the existing gap between the current state and the desired state, essentially answering the questions:

What's wrong?
Why does it matter?
How will my startup fix it?

Being able to articulate a compelling problem statement is critical for both internal clarity and external communication. It guides your internal product development and strategy, and externally, it serves as your north star for investor pitches, grant applications and customer acquisition efforts.

In this guide, we'll outline some best practices for writing crisp, effective problem statements, and using a few disruptive companies as examples, we'll share problem statement examples.

What is a problem statement?

A problem statement (also referred to as a "framing statement") is no more than 100-150 words outlining the problem to be solved and your proposed solution.

It helps stakeholders immediately grasp the significance of your startup's mission and the opportunity it represents. To be effective, the problem statement should be specific enough to provide clear direction, quantifiable to offer measurable indicators of success or failure and solution-focused to clearly show how you intend to resolve the problem.

Tips for writing effective problem statements

To write an effective problem statement, we should consider four key aspects:

Contextualizing the problem
Focusing on its impact
Using quantifiable metrics

Let’s explore each of these four key workplace aspects, which are the key elements of key workplace aspects, in more detail.

1. Contextualize the problem

Before diving into the problem itself, it's crucial to set the stage by contextualizing the issue within a broader landscape. This involves identifying the industry or market you're operating in, the target audience affected by the problem and any trends or external factors that contribute to its existence. Providing this context gives stakeholders a comprehensive understanding of why this particular issue is worth solving and why now is the right time to tackle it.

For example, if your startup is in the healthcare tech sector aiming to streamline electronic medical records, you might start by outlining the inefficiencies in current systems, the rising cost of healthcare and the increasing need for rapid, secure data exchange due to global health concerns.

Contextualizing the problem doesn't mean delving into minutiae; rather, it aims to offer enough information to understand the problem's relevance and urgency. This foundational context serves as the backdrop against which the rest of the problem statement will be assessed, making it a vital first step in crafting an effective statement.

2. Focus on the impact

After setting the context, the next step is to zero in on the impact of the problem. This is where you answer the question, "Why does this matter?" Emphasize the repercussions of not solving the problem, painting a vivid picture of the negative outcomes that could ensue. This could range from financial loss and operational inefficiencies to a diminished user experience or even societal consequences.

For instance, if your startup is developing a cybersecurity solution, you could highlight the increasing number of data breaches and their potential cost to businesses — both in terms of financial penalties and reputational damage. You might cite specific statistics or high-profile cases to underscore the gravity of the issue.

Focusing on the impact serves a dual purpose. Internally, it helps align the team on the priority of the issue, underscoring the importance of finding a solution. Externally, it adds weight to your problem statement, making it more compelling for investors, partners and customers. It essentially builds the "case for change," providing a compelling reason to act now.

3. Be solution focused

While the problem statement itself should remain solution-neutral to encourage a variety of approaches, the overall document or presentation can benefit from a section that shifts the focus towards potential solutions. After you've successfully conveyed the importance and impact of the problem, it's time to transition into how your startup aims to solve it. Here, you can outline the unique value proposition, core features, or technological advantages that your solution offers.

For example, if your startup is in the renewable energy sector tackling inefficient energy storage, this section could detail how your innovative battery technology offers higher capacity with a lower environmental footprint. You might even provide data or results from initial tests to substantiate your claims.

Being solution-focused at this stage achieves two key objectives. First, it shows that you're not just pointing out problems but are actively engaged in solving them, thereby demonstrating your startup's proactive approach and potential for success. Second, it provides a natural segue into discussions about funding, partnerships, or market entry strategies, enabling stakeholders to visualize the path forward.

Problem statement templates and examples

A simple problem statement template you can follow is two simple passages: Problem to be solved and proposed solution. Let's look at a few examples that would apply to some well-known companies.

Note that these aren't problem statements officially used by these companies, but rather our attempts at distilling them.

Problem to be Solved:

Traditional cable television and rental services offer limited flexibility, leading to a subpar consumer experience. Users are tied to predetermined schedules, limited choices and cumbersome rental procedures. The industry is ripe for disruption, as evidenced by declining cable subscriptions and the increasing adoption of internet-enabled devices for content consumption.

Proposed Solution:

Netflix aims to revolutionize the way people consume entertainment by offering an on-demand streaming service with an extensive library of films, TV shows and original content. Accessible across multiple devices, Netflix provides a personalized, user-friendly experience free from commercials. Leveraging data analytics for content recommendations, we seek to create an engaging platform that not only satisfies current entertainment needs but also anticipates and adapts to evolving consumer preferences.

Traditional taxi services suffer from inefficiencies, including limited availability, inconsistent pricing and lack of transparency, leading to a poor user experience. These problems are exacerbated during peak hours and in areas with low taxi density. The absence of a convenient, reliable and cost-effective mode of on-demand transportation represents a significant gap in the market.

Uber seeks to disrupt the transportation industry by introducing a ride-sharing platform that connects drivers and riders in real-time via a mobile application. The platform will offer transparent pricing, instant ride availability and user reviews to ensure quality. By utilizing GPS and data analytics, Uber aims to optimize route planning and reduce waiting times. This solution promises a seamless, reliable and efficient transportation experience for both drivers and riders.

Traditional grocery shopping is time-consuming and often inconvenient, especially for busy professionals, elderly individuals, or those with limited mobility. The existing solutions like scheduled delivery services lack real-time availability and offer a narrow range of products. The inconvenience amplifies during peak times and weather-related events, revealing a clear need for a more efficient, flexible solution.

Instacart aims to transform the grocery shopping experience by offering an on-demand delivery service through a user-friendly mobile app. Partnering with local grocery stores, Instacart will provide a wide range of products at competitive prices. Users can shop virtually and have their orders delivered to their doorsteps within a specified time window. By leveraging real-time inventory data and employing trained shoppers, Instacart seeks to offer a convenient, reliable and personalized grocery shopping experience.

The automotive industry has long relied on fossil fuels, contributing significantly to environmental degradation and climate change. Traditional cars emit greenhouse gases and the existing electric vehicles (EVs) on the market suffer from limited range, lengthy charging times and lack of performance. These barriers have hindered the mass adoption of sustainable transportation solutions.

Tesla aims to accelerate the world's transition to sustainable energy by producing electric vehicles that offer both high performance and long-range capabilities. Through cutting-edge battery technology, efficient powertrains and an expanding network of fast-charging stations, Tesla seeks to remove the existing barriers to EV adoption. Additionally, Tesla's vehicles come equipped with advanced safety features and autonomous driving capabilities, providing not just a green alternative but also a more intelligent, safer mode of transportation.

Need help defining your problem statement? Meet Archie, our AI solution architect

For startups who need a little help getting their framing statements fine-tuned, we introduce Archie, our AI solution architect. Archie uses GPT-4 and our own proprietary calibration to evaluate your startup ideas, offering recommendations for:

Product models
Problem statements
User design
Monetization mechanics

By leveraging AI and machine learning algorithms, Archie can assess your business concept and measure its potential, taking into account the originality of the idea and the venture’s ability to receive backing.

Archie's suggestions can spark inspiration to help get your business idea off the ground. By using Archie’s expertise, you can ensure that your problem statement is clear, concise and effective, setting the stage for a successful venture.

Want to give it a try? Visit Archie, 8base's AI solutions architect .

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How to Write a Problem Statement [Startup Edition]

At the core of every business or startup is a big problem they are trying to solve. Founders are putting forth their expertise and skills to build a solution to help solve this big problem.

In the early days of building a business, many investors and stakeholders will ask to see a business plan to address how you are attacking a market and solving a problem. When going out to raise capital (from angels, VCs, etc.) making sure that investors clearly understand the problem you are solving is crucial. One of the key aspects of a business plan is the problem statement. Learn more about business problem statements and how to craft one for your business below:

What is the Purpose of a Problem Statement?

As we mentioned above a problem statement is part of a business plan. It should be an overarching thing you are trying to solve that guides most decisions you are making as a business — product development, go-to-market strategies, customer support, etc.

A business problem statement defines exactly what problem you are helping your customers solve. It should be fairly simple but can be the backbone of your decision-making and business strategy.

Note: While you might not necessarily be sharing a “problem statement” with investors during a fundraise, it oftentimes can be useful when crafting your pitch deck. Learn more about crafting your first pitch in our post, “ Tips for Creating an Investor Pitch Deck ”

Best Practices for Writing a Problem Statement

A problem statement is fairly short and straightforward, there are best practices that you’ll want to keep in mind. An erratic or longwinded problem statement can lead to more confusion and questions, in turn leading to more work for you as a founder. Check out our best practices and tips for writing your problem statement below:

1. Clearly Define The Problem

First and foremost, you need to make sure that the problem you are solving is incredibly clear and well-defined. If you are wishy-washy with the problem, that will show a lack of conviction in the eyes of an investor or stakeholder that might be evaluating your business plan.

For example, let’s say we are a software company called Adventure App that is helping campers find lesser-known camping spots. Our problem could be, “ Finding a camping spot requires existing knowledge of a location and deciphering of local rules, boundaries, and signage that can be intimidating to new campers .”

2. Assess Who The Problem Impacts

Naturally, a problem statement solves the big problem you are helping your customers accomplish. However, a problem statement can have an impact on different stakeholders and aspects of your business. A few questions you might want to ask yourself when understanding who your problem statement impacts:

How are your customers impacted by the problem?
How are your employees impacted by this problem?
How is your overall business impacted by this problem?

Using our Adventure App example above, if we are helping customers find more camping spots, our employees are likely impacted because they enjoy the outdoors and camping themselves and have empathy for the customers.

Related Reading: How to Build A Startup Culture That Everybody Wants

3. Provide Possible Solutions

Finally, a well-written problem statement should offer a solution and detail why it will help solve the problem. There might not necessarily be a single solution but an approach as to how you and your team will execute on the solution. Continuing on with our Adventure App example, our solution might be “ Creating easy-to-use software and tools that anyone can access from the outdoors to enhance their experience. ”

3 Ways To Enhance Your Problem Statement

Once you have your first iteration of a problem statement down on paper, it is time to start dialing in the statement and make sure it is something that is easily understood by investors and stakeholders, even if you are not in the room to explain the specifics.

1. Highlight The Pain Points Of The Problem

When crafting your problem statement you want to make sure anyone reading it can really understand the pain points that your potential customers are facing. Being able to hone in the specifics will help anyone understand the problem, even if it might not be one they experience themselves. For example (continuing with our campsite finding software), you might initially write something like:

“Finding a campsite is a pain.”

However, you can go deeper with the problem by adding more specific pain points like:

“Finding a campsite requires driving to a remote location with little internet access, deciphering different signage and boundaries, and exploring in the dark until you find a spot to set up camp which can be a barrier for many to enjoy the outdoors.”

2. Add Empathy To Your Story

Going hand-in-hand with the pain points from above, add empathy to make sure that anyone reading it understands the problem.

When pitching an investor, they might have a surface-level understanding of your problem but to really make sure they feel the pain your customers are feeling you need to make the true pain points are truly there. This will help investors find empathy for the end-users and paint a picture of why a solution is needed and why your solution is the one. Using our example, many investors might not know much about camping. Making sure they can understand the headache of aimlessly driving around in the dark looking for a spot is important.

3. Explain The Benefits of Your Proposed Solutions

Now that you have built up the problem and given the readers an understanding of why there needs to be a solution you need to dial in the benefits of your solution and explain why you are the ones that should be solving the problem. Remembering that we want to keep the problem statement succinct, you need to be intentional with the wording of your solution. The rest of your business plan or pitch deck can be used to dive deeper into your solution and the economics/strategy/etc. behind your business.

Start Your Fundraise with Visible

Have your problem statement and business plan in place and ready to go out and raise capital? Let us help. You can find investors with Visible Connect (our investor database), add them to your Fundraising CRM, share your pitch deck, and track how potential investors are engaging with your fundraise. Give it a try for free for 14 days and kick off your fundraise here .

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How To Write a Problem Statement for Your Business Idea

Business Design

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A problem statement is a short and succinct definition of the problem you plan to solve and why it’s important. Creating a clear problem (and opportunities) statement is an essential element for any project, as it highlights the challenges faced by customers and the business potential for solving them.

This guide will walk you through the process of crafting a clear, concise, and compelling statement that resonates with both customers and stakeholders. By following these five simple steps, you’ll be on your way to developing a successful project with a strong foundation.

Before You Start

Before you write your problem statement you should have a clear vision of what you want to achieve with your intrapreneurial venture, and a clear picture of who you are solving the problem for (in other words – your ideal customer).

Then, when you have your customer persona and vision statement clear, move on to define your problem statement.

You need to be able to articulate the problem you’re solving in very simply terms.

Because it’s the first thing you’ll need to explain in a pitch. It’s what any new team member will immediately need to understand. And without it, everyone will end up solving different problems – which will ultimately lead to failure.

So, let’s get started.

( TIP: Grab the Problem Statement Canvas to follow along with the steps below. [DOWNLOAD] The Problem Statement Canvas )

Step 1: Frame Your Problem Statement with Your Project Vision

Before diving into the problem and opportunities statement, it’s crucial to have a clear vision for your project. Jot a short statement of how your customer’s world will be better when your solution exists. This will ensure you have a solid understanding of the context in which the problem exists and the outcome will deliver for your customer. Importantly, it will help you stay focused on the customer’s needs and set the stage for the rest of the process.

Step 2: Write a Simple Statement of the Problem from the Customer’s Perspective

Now that you have your project vision in mind, it’s time to define the problem you’re trying to solve. Craft a one-sentence statement that succinctly describes the issue from the customer’s point of view. This statement should be simple, yet powerful enough to convey the problem’s essence and the pain it causes.

Example: “Young professionals are struggling to find reliable, affordable, and eco-friendly transportation options for their daily commute.”

Step 3: Identify What People Do Today To Solve The Problem

With the problem identified, outline the current workarounds or alternative solutions that customers are using to deal with the issue. This information will help you and your team understand the existing landscape and identify areas where your project can offer unique value.

Example: “Today, people rely on a mix of public transportation, private vehicles, and rideshare services, all of which have their drawbacks in terms of cost, reliability, or environmental impact.”

⚠ Warning : If you can’t find any existing solutions or customer-created workarounds that people are using to address the problem, consider this a red flag. It means that the problem isn’t significant enough for customers to invest time and effort in solving, which will likely result in a lack of market demand for your solution. Your best bet in this case is to move on to other problems with greater potential for success.

Step 4: Identify Why This is an Important Problem to Solve

Next, explain why solving this problem is vital for the customer. Describe the consequences if the issue remains unresolved, and highlight the benefits of addressing it. Remember, your solution should be important enough that customers will be willing to spend money on it.

Example: “If left unsolved, this problem contributes to increased pollution, higher transportation costs, and longer commutes. By addressing it, we can offer customers a more sustainable, cost-effective, and dependable transportation alternative.”

Step 5: Identify The Scale of the Business Opportunity

Finally, articulate the business opportunity for your company. Describe the potential revenue and growth that can result from solving the problem, and explain why investing time and resources in this project is worthwhile. This section should be persuasive, demonstrating the value of pursuing this opportunity.

Example: “The market for eco-friendly commuting is forecast to grow to $900 billion by 2027. By developing a solution for this transportation issue, we can tap into the growing market demand for eco-friendly commuting options. With a scalable and cost-effective solution, we can establish ourselves as a leader in this space, resulting in significant revenue generation and long-term growth.”

How Intrapreneur Nation Can Help Developing and validating your Problem Statement is something we look at in detail in the Intrapreneurship Mastery training programme . When you are ready to find out more, get in touch and one of the team will get back to you.

Creating a compelling problem and opportunities statement is crucial for the success of any project. By following these five steps, you’ll be well on your way to crafting a statement that resonates with customers and stakeholders alike. With a clear understanding of the problem, its current alternatives, and the opportunities it presents, you’ll be prepared to develop a solution that truly makes a difference.

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10 Step Process for Effective Business Problem Solving

Posted august 3, 2021 by harriet genever.

Navigate uncertainty by following this 10-step process to develop your problem-solving skills and approach any issue with confidence.

When you start a small business or launch a startup, the one thing you can count on is the unexpected. No matter how thoroughly you plan, forecast , and test, problems are bound to arise. This is why as an entrepreneur, you need to know how to solve business problems effectively.

What is problem solving in business?

Problem solving in business relates to establishing processes that mitigate or remove obstacles currently preventing you from reaching strategic goals . These are typically complex issues that create a gap between actual results and your desired outcome. They may be present in a single team, operational process, or throughout your entire organization, typically without an immediate or obvious solution.

To approach problem solving successfully, you need to establish consistent processes that help you evaluate, explore solutions, prioritize execution, and measure success. In many ways, it should be similar to how you review business performance through a monthly plan review . You work through the same documentation, look for gaps, dig deeper to identify the root cause, and hash out options. Without this process, you simply cannot expect to solve problems efficiently or effectively.

Why problem solving is important for your business

While some would say problem-solving comes naturally, it’s actually a skill you can grow and refine over time. Problem solving skills will help you and your team tackle critical issues and conflicts as they arise. It starts from the top. You as the business owner or CEO needing to display the type of level-headed problem solving that you expect to see from your employees.

Doing so will help you and your staff quickly deal with issues, establish and refine a problem solving process, turn challenges into opportunities, and generally keep a level head. Now, the best business leaders didn’t just find a magic solution to solve their problems, they built processes and leveraged tools to find success. And you can do the same.

By following this 10-step process, you can develop your problem-solving skills and approach any issue that arises with confidence.

1. Define the problem

When a problem arises, it can be very easy to jump right into creating a solution. However, if you don’t thoroughly examine what led to the problem in the first place, you may create a strategy that doesn’t actually solve it. You may just be treating the symptoms.

For instance, if you realize that your sales from new customers are dropping, your first inclination might be to rush into putting together a marketing plan to increase exposure. But what if decreasing sales are just a symptom of the real problem?

When you define the problem, you want to be sure you’re not missing the forest for the trees. If you have a large issue on your hands, you’ll want to look at it from several different angles:

Competition

Is a competitor’s promotion or pricing affecting your sales? Are there new entrants in your market? How are they marketing their product or business?

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Business model

Is your business model sustainable? Is it realistic for how fast you want to grow? Should you explore different pricing or cost strategies?

Market factors

How are world events and the nation’s economy affecting your customers and your sales?

Are there any issues affecting your team? Do they have the tools and resources they need to succeed?

Goal alignment

Is everyone on your team working toward the same goal ? Have you communicated your short-term and long-term business goals clearly and often?

There are a lot of ways to approach the issue when you’re facing a serious business problem. The key is to make sure you’re getting a full snapshot of what’s going on so you don’t waste money and resources on band-aid solutions.

Going back to our example, by looking at every facet of your business, you may discover that you’re spending more on advertising than your competitors already. And instead, there’s a communication gap within your team that’s leading to the mishandling of new customers and therefore lost sales.

If you jumped into fixing the exposure of your brand, you would have been dumping more money into an area you’re already winning. Potentially leading to greater losses as more and more new customers are dropped due to poor internal communication.

This is why it’s so vital that you explore your blind spots and track the problem to its source.

2. Conduct a SWOT analysis

All good businesses solve some sort of problem for customers. What if your particular business problem is actually an opportunity, or even a strength if considered from a different angle? This is when you’d want to conduct a SWOT analysis to determine if that is in fact the case.

SWOT is a great tool for strategic planning and bringing multiple viewpoints to the table when you’re looking at investing resources to solve a problem. This may even be incorporated in your attempts to identify the source of your problem, as it can quickly outline specific strengths and weaknesses of your business. And then by identifying any potential opportunities or threats, you can utilize your findings to kickstart a solution.

3. Identify multiple solutions with design thinking

As you approach solving your problem, you may want to consider using the design thinking approach . It’s often used by organizations looking to solve big, community-based problems. One of its strengths is that it requires involving a wide range of people in the problem-solving process. Which leads to multiple perspectives and solutions arising.

This approach—applying your company’s skills and expertise to a problem in the market—is the basis for design thinking.

It’s not about finding the most complex problems to solve, but about finding common needs within the organization and in the real world and coming up with solutions that fit those needs. When you’re solving business problems, this applies in the sense that you’re looking for solutions that address underlying issues—you’re looking at the big picture.

4. Conduct market research and customer outreach

Market research and customer outreach aren’t the sorts of things small business owners and startups can do once and then cross off the list. When you’re facing a roadblock, think back to the last time you did some solid market research or took a deep dive into understanding the competitive landscape .

Market research and the insights you get from customer outreach aren’t a silver bullet. Many companies struggle with what they should do with conflicting data points. But it’s worth struggling through and gathering information that can help you better understand your target market . Plus, your customers can be one of the best sources of criticism. It’s actually a gift if you can avoid taking the negatives personally .

The worst thing you can do when you’re facing challenges is isolating yourself from your customers and ignore your competition. So survey your customers. Put together a competitive matrix .

5. Seek input from your team and your mentors

Don’t do your SWOT analysis or design thinking work by yourself. The freedom to express concerns, opinions, and ideas will allow people in an organization to speak up. Their feedback is going to help you move faster and more efficiently. If you have a team in place, bring them into the discussion. You hired them to be experts in their area; use their expertise to navigate and dig deeper into underlying causes of problems and potential solutions.

If you’re running your business solo, at least bring in a trusted mentor. SCORE offers a free business mentorship program if you don’t already have one. It can also be helpful to connect with a strategic business advisor , especially if business financials aren’t your strongest suit.

Quoting Stephen Covey, who said that “strength lies in differences, not in similarities,” speaking to the importance of diversity when it comes to problem-solving in business. The more diverse a team is , the more often innovative solutions to the problems faced by the organization appear.

In fact, it has been found that groups that show greater diversity were better at solving problems than groups made up specifically of highly skilled problem solvers. So whoever you bring in to help you problem-solve, resist the urge to surround yourself with people who already agree with you about everything.

6. Apply lean planning for nimble execution

So you do your SWOT analysis and your design thinking exercise. You come up with a set of strong, data-driven ideas. But implementing them requires you to adjust your budget, or your strategic plan, or even your understanding of your target market.

Are you willing to change course? Can you quickly make adjustments? Well in order to grow, you can’t be afraid to be nimble .

By adopting the lean business planning method —the process of revising your business strategy regularly—you’ll be able to shift your strategies more fluidly. You don’t want to change course every week, and you don’t want to fall victim to shiny object thinking. But you can strike a balance that allows you to reduce your business’s risk while keeping your team heading in the right direction.

Along the way, you’ll make strategic decisions that don’t pan out the way you hoped. The best thing you can do is test your ideas and iterate often so you’re not wasting money and resources on things that don’t work. That’s Lean Planning .

7. Model different financial scenarios

When you’re trying to solve a serious business problem, one of the best things you can do is build a few different financial forecasts so you can model different scenarios. You might find that the idea that seemed the strongest will take longer than you thought to reverse a negative financial trend. At the very least you’ll have better insight into the financial impact of moving in a different direction.

The real benefit here is looking at different tactical approaches to the same problem. Maybe instead of increasing sales right now, you’re better off in the long run if you adopt a strategy to reduce churn and retain your best customers. You won’t know unless you model a few different scenarios. You can do this by using spreadsheets, and a tool like LivePlan can make it easier and quicker.

8. Watch your cash flow

While you’re working to solve a challenging business problem, pay particular attention to your cash flow and your cash flow forecast . Understanding when your company is at risk of running out of cash in the bank can help you be proactive. It’s a lot easier to get a line of credit while your financials still look good and healthy, than when you’re one pay period away from ruin.

If you’re dealing with a serious issue, it’s easy to start to get tunnel vision. You’ll benefit from maintaining a little breathing room for your business as you figure out what to do next.

9. Use a decision-making framework

Once you’ve gathered all the information you need, generated a number of ideas, and done some financial modeling, you might still feel uncertain. It’s natural—you’re not a fortune-teller. You’re trying to make the best decision you can with the information you have.

This article offers a really useful approach to making decisions. It starts with putting your options into a matrix like this one:

Use this sort of framework to put everything you’ve learned out on the table. If you’re working with a bigger team, this sort of exercise can also bring the rest of your team to the table so they feel some ownership over the outcome.

10. Identify key metrics to track

How will you know your problem is solved? And not just the symptom—how will you know when you’ve addressed the underlying issues? Before you dive into enacting the solution, make sure you know what success looks like.

Decide on a few key performance indicators . Take a baseline measurement, and set a goal and a timeframe. You’re essentially translating your solution into a plan, complete with milestones and goals. Without these, you’ve simply made a blind decision with no way to track success. You need those goals and milestones to make your plan real .

Problem solving skills to improve

As you and your team work through this process, it’s worth keeping in mind specific problem solving skills you should continue to develop. Bolstering your ability, as well as your team, to solve problems effectively will only make this process more useful and efficient. Here are a few key skills to work on.

Emotional intelligence

It can be very easy to make quick, emotional responses in a time of crisis or when discussing something you’re passionate about. To avoid making assumptions and letting your emotions get the best of you, you need to focus on empathizing with others. This involves understanding your own emotional state, reactions and listening carefully to the responses of your team. The more you’re able to listen carefully, the better you’ll be at asking for and taking advice that actually leads to effective problem solving.

Jumping right into a solution can immediately kill the possibility of solving your problem. Just like when you start a business , you need to do the research into what the problem you’re solving actually is. Luckily, you can embed research into your problem solving by holding active reviews of financial performance and team processes. Simply asking “What? Where? When? How?” can lead to more in-depth explorations of potential issues.

The best thing you can do to grow your research abilities is to encourage and practice curiosity. Look at every problem as an opportunity. Something that may be trouble now, but is worth exploring and finding the right solution. You’ll pick up best practices, useful tools and fine-tune your own research process the more you’re willing to explore.

Brainstorming

Creatively brainstorming with your team is somewhat of an art form. There needs to be a willingness to throw everything at the wall and act as if nothing is a bad idea at the start. This style of collaboration encourages participation without fear of rejection. It also helps outline potential solutions outside of your current scope, that you can refine and turn into realistic action.

Work on breaking down problems and try to give everyone in the room a voice. The more input you allow, the greater potential you have for finding the best solution.

Decisiveness

One thing that can drag out acting upon a potential solution, is being indecisive. If you aren’t willing to state when the final cutoff for deliberation is, you simply won’t take steps quickly enough. This is when having a process for problem solving comes in handy, as it purposefully outlines when you should start taking action.

Work on choosing decision-makers, identify necessary results and be prepared to analyze and adjust if necessary. You don’t have to get it right every time, but taking action at the right time, even if it fails, is almost more vital than never taking a step.

Stemming off failure, you need to learn to be resilient. Again, no one gets it perfect every single time. There are so many factors in play to consider and sometimes even the most well-thought-out solution doesn’t stick. Instead of being down on yourself or your team, look to separate yourself from the problem and continue to think of it as a puzzle worth solving. Every failure is a learning opportunity and it only helps you further refine and eliminate issues in your strategy.

Problem solving is a process

The key to effective problem-solving in business is the ability to adapt. You can waste a lot of resources on staying the wrong course for too long. So make a plan to reduce your risk now. Think about what you’d do if you were faced with a problem large enough to sink your business. Be as proactive as you can.

Editor’s note: This article was originally published in 2016. It was updated in 2021.

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Harriet Genever

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11 Common Business Plan Mistakes You Should Avoid

Male entrepreneur sitting in the cab of his truck looking down at his business plan and wondering if he made a mistake.

6 min. read

Updated February 9, 2024

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During a business crisis, change comes at you fast. Meaning that good business planning is crucial to the survival and success of your business. However, even when you’re not navigating through a crisis, it’s easy to make mistakes that can prove to be costly for your business.

What are the most common mistakes when writing a business plan?

Some common mistakes are classics. Others are reflections of the growing need for planning as steering and management tools. But they are all common pitfalls to avoid. Do your planning right and it’s a powerful tool for quick decisions, rapid adjustment, and optimizing management.

So, what are the most common mistakes when writing a business plan ?

1. Not planning

Too many businesses make business plans only when they have no choice in the matter. Unless a bank or investors want a plan, there is no plan.

Don’t wait to write your plan until you think you’ll have enough time. “I can’t plan. I’m too busy getting things done,” business people say. The busier you are, the more you need to plan. If you are always putting out fires, you should build firebreaks or a sprinkler system. You can lose the whole forest for paying too much attention to the individual burning trees.

You can actually put together a Lean Plan in less than 30 minutes . Here’s a free downloadable Lean Plan Template to help.

2. Using a single static plan

Now more than ever, as we deal with the crisis of 2020 and 2021, stop thinking of the business plan as just a plan. That conceptual mistake blocks you from the enormous benefits of planning as a process, with regular review and revision .

Things change overnight. Assumptions disappear into the wind. Your business planning is where you keep track of all of the connections between tasks, spending, goals, changing assumptions, and changing markets.

A good business plan is never finished. When your plan is done, your company is done. Do a lean plan and keep it fresh.

3. Losing focus on cash

Most people think in terms of profits instead of cash . When you imagine a new business, you think of what it would cost to make the product, what you could sell it for, and what the profits per unit might be.

We are trained to think of business as sales minus costs and expenses, which equals profits. Unfortunately, we don’t spend the profits in a business. We spend cash.

Understanding cash flow is critical. If you have only one table in your business plan, make it the cash flow table. Here’s a free cash flow template to help you get started.

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4. Skipping idea validation

Don’t overestimate the importance of the idea. You don’t need a great idea to start a business — you need time, money, perseverance, and common sense.

Few successful businesses are based entirely on new ideas. A new idea is harder to execute than an existing one because people don’t understand a new idea and they are often unsure if it will work.

Plans don’t sell new business ideas to investors. Plans just summarize business prospects and achievements. Investors invest in people, and their businesses, not ideas. Investors buy into a business, with milestones met and traction and validation ; not just ideas.

The plan, though necessary, is only a way to present information. So make sure you’re ready to wow your prospective investors with your knowledge and leadership skills. Don’t expect your business idea — or the business plan you explain it in — to do the work for you.

Here’s our idea validation checklist — it can help you think through whether your idea is viable before you spend a lot of time and money on it.

5. Making the planning process overwhelming

Doing a business plan isn’t as hard as you might think. You don’t have to write a doctoral thesis or a novel. As we said earlier, the simplest Lean Plan is just a few pages of bullet-point lists, tables, and essential projections.

There are good books , many advisors among the Small Business Development Centers (SBDCs), and through the SCORE business mentoring program, business schools, and there is software available to help you (such as LivePlan ).

Don’t sweat the cosmetics. Focus on the content. What matters is what you plan, not how you write about it.

6. Spongy, vague goals

Leave out the vague and meaningless babble of business phrases (such as “being the best”) because they are simply hype.

Remember that the objective of a plan is its results, and for results, you need tracking and follow-up . You need specific dates, management responsibilities, budgets, and milestones. Then you can follow up. No matter how well thought out or brilliantly presented, it means nothing unless it produces results. This article on how milestones make your business plan real and actionable will help.

7. Assuming that one size fits all

Not every business plan needs to be the same. In fact not every plan should be the same. To find success, you need to tailor your plan to its real business purpose.

Business plans can be different things: they are sometimes just sales documents to explain a new business. They can also be flexible Lean Plans, detailed action plans, financial plans , marketing plans , and even personnel plans. They can be used to start a business , or just run a business better.

Develop the plan that best suits your business goals and don’t let the planning process get the best of you.

8. Diluted priorities

Remember, strategy equals focus . If you split your priorities you split your focus and will only have difficulties making any progress.

Starting with a priority list of three to four items is the focus. A priority list with 20 items is certainly not strategic, and rarely if ever effective. The more items on the list, the less the importance of each.

9. “Hockey stick” shaped growth projections

Sales grow slowly at first, but then shoot up boldly with huge growth rates, as soon as “something” happens. The only issue is if that’s your sole projection, you’ll soon find yourself in trouble.

It’s best to have projections that are conservative so you can defend them. When in doubt, be less optimistic. In fact, it may make sense to have multiple forecasts operating — one that acts conservatively, one that’s more optimistic, and another that reflects your actual performance.

If you’re unsure of where to start, here’s how we suggest you create your sales forecast .

10. Not paying attention

We’ve seen it again in 2020 — planning works best as a process. In order to navigate volatile environments a lean plan, regular reviews, and revisions as needed are necessary. It’s not about having the document, the business plan, that isn’t the goal. It’s about a system of planning that works like driving with a GPS.

You have the long-term strategy and goals as the desired destination. You have the major milestones and metrics as the recommended route. And you have regular progress reviews as the equivalent of real-time traffic and weather information.

Steering is a matter of frequent course corrections. Planning does that for you. If you’re not paying attention, and not adjusting to external factors, your plan is worthless.

11. Sticking to the plan

Contrary to popular belief, there is no virtue in sticking to a plan, just for the sake of sticking to a plan. There are plenty of cases where your initial plan is ill-informed, missing steps, or just ineffective.

Having a plan doesn’t mean you cut your options or reduce flexibility. Having a plan means you have a dashboard tool to show the connections and dependencies. It’s about being able to make the right changes fast. It is more flexible, not less.

Tim Berry is the founder and chairman of Palo Alto Software , a co-founder of Borland International, and a recognized expert in business planning. He has an MBA from Stanford and degrees with honors from the University of Oregon and the University of Notre Dame. Today, Tim dedicates most of his time to blogging, teaching and evangelizing for business planning.

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Problem Statement Examples For Your Company

Last updated on 31 October 2023.

This article will give you an insight into what are problem statements for businesses, problem statement examples, how to write a problem statement and many more questions that entrepreneurs have regarding problem statements.

What is a Problem Statement?

Before discussing problem statement examples , just a quick brief introduction to what is a problem statement in a business? A problem statement defines the problem faced by a business and also identifies what the solution would look like. Businesses are usually created on the basis of solving problems that exist amongst consumers .

statement of the problem example / Problem statement examples

A problem statement can be seen as the starting point for coming up with a product vision. In defining the problem statement for your startup or business, be sure to include these elements:

1. The Problem: What is the issue plaguing the organization? 2. Who It Affects: Indicate the entities that are affected by the issue. This can be a group of stakeholders or an organization. 3. Impact: What is the impact or consequence of the issue? 4. Solution: Include your recommendation for solving the issue.

When Should You Write A Problem Statement?

A problem statement should be written in businesses and other organisations, writing a problem statement is an important step in improvement projects. A clearly defined and well-understood issue is crucial to finding and implementing effective business solutions. In this case, the problem statement is usually a stand-alone document.

Writing a problem statement should help in careful decision-making for the existence of your business, and the reasons for its operation. The problem statement will serve as the basis for the introductory section, directing the reader’s attention to the issues that your proposed business plan will address. A problem statement is a communication tool. Problem statements are important to businesses, individuals and other entities to develop projects focused on improvement. Whether the issue is pertaining to badly-needed road work or the logistics for an island construction project; a clear, concise problem statement is typically used by a project’s team to help define and understand the issue and develop possible solutions.

These statements also provide important information that is crucial in decision-making in relation to these projects or processes. A problem statement can be identified by noticing the following measure in all problem statement examples:

It should neither be a statement of the Vision and Mission of the company nor any philosophy.
A problem statement should be brief and clear.
A problem statement should be specific and measurable.
The context must always be made clear.

Problem Statement Examples

There are several problem statement examples. Let’s use the example of Netflix, who initially solved the issue people had while having to travel to the video store to rent a movie.

Netflix sought to avoid video stores altogether and instead deliver movies in an envelope to your mailbox, allowing you to keep the movie as long as you’d like. Netflix’s problem statement would probably look something like this:

“Going to the video store is a pain. People don’t like travelling back and forth just to rent a movie and they hate paying late fees even more.”

A simple interpretation of problem statement examples (taking Netflix in the example) will be portrayed as the following as well:

Problem: “Going to the video store requires fighting traffic, wandering the aisles, and waiting in long lines just to get a single movie.”

Solution: “ Netflix allows anyone to enjoy thousands of titles streamed directly to their home or delivered to their mailbox.”

In just two sentences you have given a potential investor an easy-to-digest problem/solution statement. Problem statement examples like that of Netflix are simple yet straight to the point.

Good problem statement examples focus entirely on the issue so that the audience can build a powerful case for that issue and accept the solution that the business is trying to provide.

Problem statement examples also include Facebook for instance. Harvard had a Facebook of their own when Mark Zuckerberg was studying there. His frustration was that “he could only search and look at people’s information on the university’s Facebook and not perform any sort of social interactions (liking, commenting etc.)” . His objective was to create a platform where members can search for people according to their interests and can create an online network of friends/study groups.

Elements of a Good Problem Statement

There are certain components and elements of a good problem statement. All great problem statement examples are comprised of the following components. There are four key elements you should include when writing a problem statement:

Ideal situation: The first thing your problem statement should describe is what the ideal situation would be if there wasn’t a issue you needed to address. This section identifies the goals and scope of the project are. This section should create a clear understanding of what the ideal environment will be once the issue has been resolved and what your business has done in order to be able to solve the issue that exists.
Reality: The next section of your problem statement should describe what the current reality is for your company or organization. This section will identify what the issue is, state why it is an issue and identify who the issue is impacting. It will also describe when and where the issue was identified. This section is basically doing a scenario analysis.
Consequences: This section of your problem statement should identify what the consequences of the issue are. This section describes the effects of the issue by describing how the people affected by the issue are being impacted and quantifying how much the problem is impacting them. Common consequences can include the loss of time, money, resources, competitive advantage, productivity and efficiency.
Proposal: The proposal section of a problem statement may contain several possible solutions to the issue, but it is important to remember that it does not need to identify a specific solution. The purpose of the proposal section should be to guide the business team on how they can research, investigate and resolve the problem.

How To Write A Problem Statement

Apart from these tips, check out our article for detail on how to write a problem statement for your business with more problem statement examples.

Describe the ideal situation you aim to achieve. To begin, you’ll want to provide some context that will make it easier to understand the issue at hand. Start by explaining how this particular process should work. Concisely describe how the process would function if the current problem didn’t exist before mentioning the problem, keeping the end-user in mind. For example, most problem statement examples say that you have an idea of how to increase efficiency in a process to maximize the best use of resources. You might begin by describing a theoretical situation in which the system is more efficient and working toward your proposal from there, always keeping in mind who, what, when, where and why to keep yourself on track.
Pick the biggest problem to solve. There’s a good chance that your product/service solves multiple issues. While defining your problem statement, however, it’s time to lead with just one of them – the biggest problem you solve. While pitching your problem statement to investors, do note that they will not have time to remember all of the problem statement examples that are put in front of them, but are likely to remember the one that is able to solve their problem.

Consider the audience's needs in your problem. Like all problem statement examples, review reports and talk to staff members to ensure that you truly understand the scope of the problem. Consider the needs and experiences of your audience when you write the statement. As a business, individuals will be drawn to you and your problem statement examples when they are able to relate to it or have experienced something similar. The vision for your product/service should be no different. The more your audience can relate to your story, the better they will understand it and want to connect to it.
Provide facts about the problem that your business is solving. Most problem statement examples out there are supported by surveys or statistics. Depending on the problem, your problem statement might include references to internal or external reports, staffing reports, statistics, customer demographics, national trends and information on company resources if they contribute to the problem. Avoid adding any excess numbers, but make sure to include only key statistics that illustrate the severity of the problem.
Explain the benefits of your proposed solution. You’ve described an ideal scenario in which the problem doesn’t exist through problem statement examples. You’ve pointed out the problem, explained the ramifications of choosing not to fix it (using dollars and solid data) and proposed some realistic approaches to finding a solution.
Now is a very good time to demonstrate why this solution will work, again focusing on efficiency and the financial impact of your solution. Address what expenses the solution will decrease, how this solution will free up revenue streams and what intangible benefits, such as increased customer satisfaction, your solution will bring.

Purpose Of A Problem Statement

One is to identify and explain the problem in a concise but detailed way to give the reader a comprehensive view of what’s going on. This includes identifying who the problem impacts, what the impacts are, where the problem occurs and why and when it needs to be fixed.

Another purpose of the problem statement is to clarify what the expected outcomes are. Establishing what the desired situation would look like helps provide an overarching idea about the project. The proposed solution and scope and goals of the solution are made clear through this statement.

The problem statement provides a guide for navigating the business once it begins. It is continually referenced throughout the duration of the business to help the team remain focused and on track. Near the full establishment of the business, this statement is again referred to in order to verify that the solution has been implemented as stated and that it does indeed solve the initial problem.

This can help in making sure that proper steps are being taken to prevent the same problem from happening again in the future and to provide room for continuous improvement within the business through innovation. It serves as a guide and a checklist to ensure that all objectives of the business are being met.

On A Final Note

To conclude this article, all the good problem statement examples have a list of do’s and don’t’s that businesses consider.

A problem statement describes the problem faced by an organisation and also identifies what the solution would look like. It can also establish a foundation for building compelling business cases and proving the necessity for specific projects. Before your business advertises a solution, make sure the customers are aware of the problem that you are solving, which is conveyed through your problem statement.

What is A Problem Statement

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Six problem-solving mindsets for very uncertain times

Great problem solvers are made, not born. That’s what we’ve found after decades of problem solving with leaders across business, nonprofit, and policy sectors. These leaders learn to adopt a particularly open and curious mindset, and adhere to a systematic process for cracking even the most inscrutable problems. They’re terrific problem solvers under any conditions. And when conditions of uncertainty are at their peak, they’re at their brilliant best.

Six mutually reinforcing approaches underly their success: (1) being ever-curious about every element of a problem; (2) being imperfectionists , with a high tolerance for ambiguity; (3) having a “dragonfly eye” view of the world, to see through multiple lenses; (4) pursuing occurrent behavior and experimenting relentlessly; (5) tapping into the collective intelligence , acknowledging that the smartest people are not in the room; and (6) practicing “show and tell” because storytelling begets action (exhibit).

Here’s how they do it.

1. Be ever-curious

As any parent knows, four-year-olds are unceasing askers. Think of the never-ending “whys” that make little children so delightful—and relentless. For the very young, everything is new and wildly uncertain. But they’re on a mission of discovery, and they’re determined to figure things out. And they’re good at it! That high-energy inquisitiveness is why we have high shelves and childproof bottles.

When you face radical uncertainty, remember your four-year-old or channel the four-year-old within you. Relentlessly ask, “Why is this so?” Unfortunately, somewhere between preschool and the boardroom, we tend to stop asking. Our brains make sense of massive numbers of data points by imposing patterns that have worked for us and other humans in the past. That’s why a simple technique, worth employing at the beginning of problem solving, is simply to pause and ask why conditions or assumptions are so until you arrive at the root of the problem. 1 This approach was originally developed by Sakichi Toyoda, the founder of Toyota.

Natural human biases in decision making, including confirmation, availability, and anchoring biases, often cause us to shut down the range of solutions too early. 2 Daniel Kahneman, Thinking, Fast and Slow , New York, NY: Farrar, Straus and Giroux, 2011. Better—and more creative—solutions come from being curious about the broader range of potential answers.

One simple suggestion from author and economist Caroline Webb to generate more curiosity in team problem solving is to put a question mark behind your initial hypotheses or first-cut answers. This small artifice is surprisingly powerful: it tends to encourage multiple solution paths and puts the focus, correctly, on assembling evidence. We also like thesis/antithesis, or red team/blue team, sessions, in which you divide a group into opposing teams that argue against the early answers—typically, more traditional conclusions that are more likely to come from a conventional pattern. Why is this solution better? Why not that one? We’ve found that better results come from embracing uncertainty. Curiosity is the engine of creativity.

We have to be comfortable with estimating probabilities to make good decisions, even when these guesses are imperfect. Unfortunately, we have truckloads of evidence showing that human beings aren’t good intuitive statisticians.

2. Tolerate ambiguity—and stay humble!

When we think of problem solvers, many of us tend to picture a poised and brilliant engineer. We may imagine a mastermind who knows what she’s doing and approaches a problem with purpose. The reality, though, is that most good problem solving has a lot of trial and error; it’s more like the apparent randomness of rugby than the precision of linear programming. We form hypotheses, porpoise into the data, and then surface and refine (or throw out) our initial guess at the answer. This above all requires an embrace of imperfection and a tolerance for ambiguity—and a gambler’s sense of probabilities.

The real world is highly uncertain. Reality unfolds as the complex product of stochastic events and human reactions. The impact of COVID-19 is but one example: we address the health and economic effects of the disease, and their complex interactions, with almost no prior knowledge. We have to be comfortable with estimating probabilities to make good decisions, even when these guesses are imperfect. Unfortunately, we have truckloads of evidence showing that human beings aren’t good intuitive statisticians. Guesses based on gut instinct can be wildly wrong. That’s why one of the keys to operating in uncertain environments is epistemic humility, which Erik Angner defines as “the realization that our knowledge is always provisional and incomplete—and that it might require revision in light of new evidence.” 3 Erik Angner, “Epistemic humility—knowing your limits in a pandemic,” Behavioral Scientist , April 13, 2020, behavioralscientist.org.

Recent research shows that we are better at solving problems when we think in terms of odds rather than certainties. 4 Annie Duke, Thinking in Terms of Bets: Making Smarter Decisions When You Don’t Have All the Facts , New York, NY: Portfolio/Penguin, 2018. For example, when the Australian research body Commonwealth Scientific and Industrial Research Organisation (CSIRO), which owned a core patent on the wireless internet protocol, sought royalties from major companies, it was initially rebuffed. The CSIRO bet that it could go to court to protect its intellectual property because it estimated that it needed only 10 percent odds of success for this to be a good wager, given the legal costs and likely payoff. It improved its odds by picking the weakest of the IP violators and selecting a legal jurisdiction that favored plaintiffs. This probabilistic thinking paid off and eventually led to settlements to CSIRO exceeding $500 million. 5 CSIRO briefing to US Government, December 5, 2006. A tolerance for ambiguity and a willingness to play the odds helped the organization feel its way to a good solution path.

To embrace imperfectionism with epistemic humility, start by challenging solutions that imply certainty. You can do that in the nicest way by asking questions such as “What would we have to believe for this to be true?” This brings to the surface implicit assumptions about probabilities and makes it easier to assess alternatives. When uncertainty is high, see if you can make small moves or acquire information at a reasonable cost to edge out into a solution set. Perfect knowledge is in short supply, particularly for complex business and societal problems. Embracing imperfection can lead to more effective problem solving. It’s practically a must in situations of high uncertainty, such as the beginning of a problem-solving process or during an emergency.

Good problem solving typically involves designing experiments to reduce key uncertainties. Each move provides additional information and builds capabilities.

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3. take a dragonfly-eye view.

Dragonfly-eye perception is common to great problem solvers. Dragonflies have large, compound eyes, with thousands of lenses and photoreceptors sensitive to different wavelengths of light. Although we don’t know exactly how their insect brains process all this visual information, by analogy they see multiple perspectives not available to humans. The idea of a dragonfly eye taking in 360 degrees of perception 6 Philip Tetlock and Dan Gardner, Superforecasting: The Art and Science of Prediction , New York, NY: Crown, 2015. is an attribute of “superforecasters”—people, often without domain expertise, who are the best at forecasting events.

Think of this as widening the aperture on a problem or viewing it through multiple lenses. The object is to see beyond the familiar tropes into which our pattern-recognizing brains want to assemble perceptions. By widening the aperture, we can identify threats or opportunities beyond the periphery of vision.

Consider the outbreak of HIV in India in the early 1990s—a major public-health threat. Ashok Alexander, director of the Bill & Melinda Gates Foundation’s India Aids Initiative, provided a brilliant example of not just vision but also dragonfly vision. Facing a complex social map with a rapidly increasing infection rate, he widened the problem’s definition, from a traditional epidemiological HIV transmission model at known “hot spots,” to one in which sex workers facing violence were made the centerpiece.

This approach led to the “Avahan solution,” which addressed a broader set of leverage points by including the sociocultural context of sex work. The solution was rolled out to more than 600 communities and eventually credited with preventing 600,000 infections. The narrow medical perspective was sensible and expected, but it didn’t tap into the related issue of violence against sex workers, which yielded a richer solution set. Often, a secret unlocks itself only when one looks at a problem from multiple perspectives, including some that initially seem orthogonal.

The secret to developing a dragonfly-eye view is to “anchor outside” rather than inside when faced with problems of uncertainty and opportunity. Take the broader ecosystem as a starting point. That will encourage you to talk with customers, suppliers, or, better yet, players in a different but related industry or space. Going through the customer journey with design-thinking in mind is another powerful way to get a 360-degree view of a problem. But take note: when decision makers face highly constrained time frames or resources, they may have to narrow the aperture and deliver a tight, conventional answer.

Want better strategies? Become a bulletproof problem solver

4. pursue occurrent behavior.

Occurrent behavior is what actually happens in a time and place, not what was potential or predicted behavior. Complex problems don’t give up their secrets easily. But that shouldn’t deter problem solvers from exploring whether evidence on the facets of a solution can be observed, or running experiments to test hypotheses. You can think of this approach as creating data rather than just looking for what has been collected already. It’s critical for new market entry—or new market creation. It also comes in handy should you find that crunching old data is leading to stale solutions.

Most of the problem-solving teams we are involved with have twin dilemmas of uncertainty and complexity, at times combined as truly “wicked problems.” 7 A term coined in a now famous 1973 article: Horst W. J. Rittel and Melvin Webber, “Dilemmas in a general theory of planning,” Policy Sciences , 1973, Number 4, pp. 155–69. For companies ambitious to win in the great unknown in an emerging segment—such as electric cars or autonomous vehicles, where the market isn’t fully established—good problem solving typically involves designing experiments to reduce key uncertainties, not just relying on existing data. Each move (such as buying IP or acquiring a component supplier) and each experiment (including on-road closed tests) not only provides additional information to make decisions but also builds capabilities and assets that support further steps. Over time, their experiments, including alliances and acquisitions, come to resemble staircases that lead to either the goal or to abandonment of the goal. Problem-solving organizations can “bootstrap” themselves into highly uncertain new spaces, building information, foundational assets, and confidence as they take steps forward.

Risk-embracing problem solvers find a solution path by constantly experimenting. Statisticians use the abbreviation EVPI—the expected value of perfect information—to show the value of gaining additional information that typically comes from samples and experiments, such as responses to price changes in particular markets. A/B testing is a powerful tool for experimenting with prices, promotions, and other features and is particularly useful for digital marketplaces and consumer goods. Online marketplaces make A/B testing easy. Yet most conventional markets also offer opportunities to mimic the market’s segmentation and use it to test different approaches.

The mindset required to be a restless experimenter is consistent with the notion in start-ups of “failing fast.” It means that you get product and customer affirmation or rejection quickly through beta tests and trial offerings. Don’t take a lack of external data as an impediment—it may actually be a gift, since purchasable data is almost always from a conventional way of meeting needs, and is available to your competitors too. Your own experiments allow you to generate your own data; this gives you insights that others don’t have. If it is difficult (or unethical) to experiment, look for the “natural experiments” provided by different policies in similar locations. An example would be to compare outcomes in twin cities, such as Minneapolis–St. Paul.

It’s a mistake to think that your team has the smartest people in the room. They aren’t there. They’re invariably somewhere else. Nor do they need to be there if you can access their intelligence via other means.

5. Tap into collective intelligence and the wisdom of the crowd

Chris Bradley, a coauthor of Strategy Beyond the Hockey Stick , 8 Chris Bradley, Marin Hirt, and Sven Smit, Strategy Beyond the Hockey Stick: People, Probabilities, and Big Moves to Beat the Odds , Hoboken, NJ: Wiley, 2018. observed that “it’s a mistake to think that on your team you have the smartest people in the room. They aren’t there. They’re invariably somewhere else.” 9 For more from Chris Bradley, in a conversation with Rob McLean, see “ Want better strategies? Become a bulletproof problem solver ,” August 2019. Nor do they need to be there if you can access their intelligence via other means. In an ever-changing world where conditions can evolve unpredictably, crowdsourcing invites the smartest people in the world to work with you. For example, in seeking a machine-learning algorithm to identify fish catch species and quantities on fishing boats, the Nature Conservancy (TNC) turned to Kaggle and offered a $150,000 prize for the best algorithm. This offer attracted 2,293 teams from all over the world. TNC now uses the winning algorithm to identify fish types and sizes caught on fishing boats in Asia to protect endangered Pacific tuna and other species.

Crowdsourced problem solving is familiar in another guise: benchmarking. When Sir Rod Carnegie was CEO of Conzinc Riotinto Australia (CRA), he was concerned about the costs of unscheduled downtime with heavy trucks, particularly those requiring tire changes. He asked his management team who was best in the world at changing tires; their answer was Formula One, the auto racing competition. A team traveled to the United Kingdom to learn best practice for tire changes in racetrack pits and then implemented what it learned thousands of miles away, in the Pilbara region of Western Australia. The smartest team for this problem wasn’t in the mining industry at all.

Of course, while crowdsourcing can be useful when conventional thinking yields solutions that are too expensive or incomplete for the challenge at hand, it has its limitations. Good crowdsourcing takes time to set up, can be expensive, and may signal to your competitors what you are up to. Beware of hidden costs, such as inadvertently divulging information and having to sieve through huge volumes of irrelevant, inferior suggestions to find the rare gem of a solution.

Accept that it’s OK to draw on diverse experiences and expertise other than your own. Start with brainstorming sessions that engage people from outside your team. Try broader crowdsourcing competitions to generate ideas. Or bring in deep-learning talent to see what insights exist in your data that conventional approaches haven’t brought to light. The broader the circles of information you access, the more likely it is that your solutions will be novel and creative.

Rookie problem solvers show you their analytic process and math to convince you they are clever. Seasoned problem solvers show you differently.

6. Show and tell to drive action

We started our list of mindsets with a reference to children, and we return to children now, with “show and tell.” As you no doubt remember—back when you were more curious!—show and tell is an elementary-school activity. It’s not usually associated with problem solving, but it probably piqued your interest. In fact, this approach is critical to problem solving. Show and tell is how you connect your audience with the problem and then use combinations of logic and persuasion to get action.

The show-and-tell mindset aims to bring decision makers into a problem-solving domain you have created. A team from the Nature Conservancy, for instance, was presenting a proposal asking a philanthropic foundation to support the restoration of oyster reefs. Before the presentation, the team brought 17 plastic buckets of water into the boardroom and placed them around the perimeter. When the foundation’s staff members entered the room, they immediately wanted to know what the buckets were for. The team explained that oyster-reef restoration massively improves water quality because each oyster filters 17 buckets of water per day. Fish stocks improve, and oysters can also be harvested to help make the economics work. The decision makers were brought into the problem-solving domain through show and tell. They approved the funding requested and loved the physical dimension of the problem they were part of solving.

Rookie problem solvers show you their analytic process and mathematics to convince you that they are clever. That’s sometimes called APK, the anxious parade of knowledge. But seasoned problem solvers show you differently. The most elegant problem solving is that which makes the solution obvious. The late economist Herb Simon put it this way: “Solving a problem simply means representing it so as to make the solution transparent.” 10 Herbert Simon, The Sciences of the Artificial , Cambridge, MA: MIT Press, 1969.

To get better at show and tell, start by being clear about the action that should flow from your problem solving and findings: the governing idea for change. Then find a way to present your logic visually so that the path to answers can be debated and embraced. Present the argument emotionally as well as logically, and show why the preferred action offers an attractive balance between risks and rewards. But don’t stop there. Spell out the risks of inaction, which often have a higher cost than imperfect actions have.

The mindsets of great problem solvers are just as important as the methods they employ. A mindset that encourages curiosity, embraces imperfection, rewards a dragonfly-eye view of the problem, creates new data from experiments and collective intelligence, and drives action through compelling show-and-tell storytelling creates radical new possibilities under high levels of unpredictability. Of course, these approaches can be helpful in a broad range of circumstances, but in times of massive uncertainty, they are essential.

Charles Conn is an alumnus of McKinsey’s Sydney office and is a board member of Patagonia and former CEO of the Rhodes Trust. Robert McLean is an alumnus of the Sydney office and is the advisory-board chair of the Nature Conservancy Australia. They are the authors of Bulletproof Problem Solving: The One Skill That Changes Everything (Wiley, 2018).

This article was edited by David Schwartz, an executive editor in the Tel Aviv office.

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Nine common business plan mistakes to avoid as a new entrepreneur.

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Business plans are often considered an essential tool to help set a new entrepreneur up for success. This document typically encompasses the vision for your company, including your mission statement, while also pinpointing your target audience, sales projections and growth goals.

If you're a new entrepreneur, developing a business plan can be intimidating and you might not know where to start. You may also be prone to making some common errors that business owners tend to make on their first plan.

To that end, nine members of Young Entrepreneur Council each share one mistake new entrepreneurs often make in their business plans and what they should be doing instead.

Young Entrepreneur Council members discuss common business plan mistakes.

1. Making A Long-Winded Business Plan

After working at a larger company and starting my own company, I think that having a long, 50-plus page business plan is a mistake for startups because things change so quickly, and by the time you finish writing it, it is outdated. I have used the business model canvas from the Lean Startup methodology to create a one-page business plan, and leveraged it to create our mission and vision statements. We have never needed a business plan in our nine years of operations, and have just leveraged the business model canvas, revisiting it every two to three years to make sure that our strategy is still sound. I advise my clients to use this as well. I don't think I will ever write a long-winded business plan ever again. - Candice Lu , ONPREM SOLUTION PARTNERS

2. Underestimating User Acquisition

Entrepreneurs often underestimate user acquisition. With the immense competition for the consumer's attention today, it is more important (and difficult) than ever for their message to stand out. Part of that is a product that solves a burning pain point for the consumer that the consumer would be immediately drawn to, but another part is finding nonsaturated channels to reach their target consumers and building compounding loops within their product so that their users champion their product to other users. While it would be ideal if building a great product was all it took—"If you build it, they will come"—in my experience, this has not been the case. Great products need great distribution strategies to break through the noise and reach consumers who need what the entrepreneur is making. - Akshar Bonu , The Custom Movement

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3. Striving To Create A 'Perfect Plan'

One mistake is that new entrepreneurs are trying to create the perfect business plan with everything all figured out. You will never start if you are trying to have everything figured out. Come up with a basic business plan and start it. No matter what, things are going to change as you figure it out along the way. For most things, you won't know until you start it and try things. So keep the plan basic and get started. Take notes and make adjustments along the way. - Lisa Collum , Top Score Writing

4. Failing To Research The Target Market

One business plan mistake that new entrepreneurs often make is failing to research their target market properly. They may have a great product or service, but if they don't know who their customers are, they'll have a hard time reaching them. It's important to have a clear understanding of who your potential customers are, their needs and how your product or service meets those needs. Without this knowledge, it's difficult to create an effective marketing strategy. New entrepreneurs should take the time to research their target market thoroughly. This involves identifying their needs and wants, understanding their buying habits and knowing where to find them. Only then can entrepreneurs develop an effective marketing plan that will help them reach their potential customers. - Tonika Bruce , Lead Nicely, Inc.

5. Forgetting Cash Flow

New entrepreneurs focus a lot on their profitability in their business plan, so they forget to focus on cash flow. Profitability often does not equal cash flow. Many profit-making businesses are not able to pay their bills because their funds are stuck in debt and stock. Thus, when making a business plan, it is important to look at the cash conversion cycle and how to reduce the cycle, as well as how to fund the cash flow shortfalls even when the company is profitable. Profitability ensures that the business will remain existent in the long term, but cash flow ensures that the business will remain existent in the short term as well. - Kripa Shroff , AK Multinational LLC

6. Thinking A Business Can’t Be Started Without A Formal Plan

Many entrepreneurs think they need a highly detailed, professional business plan before they can start their business. I would say that most of the business owners I know didn't sit down and formalize a plan before they launched. They just got after it and met a need in their market, learned lessons from the wins and the losses and refined their offering and operation each day. There are enough mental roadblocks that people obsess over and let stop them from ever starting, and the business plan shouldn't be one of them. That being said, it is good to have a business plan developed at some point in the business, which can be updated over time as the business grows. Chances are that the plan you start with will need to adapt and grow just like your business does. - Joel Mathew , Fortress Consulting

7. Misunderstanding The Plan's Purpose

Entrepreneurs' most significant mistake when writing a business plan is not understanding who they're writing it for. Not all entrepreneurs use their business plans to attract venture capital. If that's you, you don't need a comprehensive plan, but you do need a solid market analysis and financial picture. A business plan is a fluid document, not one set in stone. Business plans can be one page or even written on a napkin. If you're a company of one not seeking funding, it needs to: state the basic idea or concept; thoroughly examine the competition and product or service viability; detail a one-year marketing plan and a one-year budget and financial plan. You need to know your idea, the market and the money in as few pages as possible. If it's too long, you won't read or follow it. - Jared Weitz , United Capital Source Inc.

8. Underestimating The Competition

One of the most common mistakes new entrepreneurs make when making a business plan is underestimating, or outright failing to identify, their competition. This is especially prevalent for those with a truly unique product or service. New entrepreneurs can let their optimism and excitement for the idea cloud their vision when assessing the competition. If you think you have no competition, chances are you just don't recognize them. Just because the way you're addressing a problem is brand new doesn't mean the problem isn't already being addressed. Try to take a step back and focus less on businesses that seem comparable to yours, and instead think of alternative solutions to the problem your business will solve. - Bryce Welker , The CPA Exam Guy

9. Leaving Little Room To Pivot

One of the most fundamental mistakes entrepreneurs make when creating a business plan is failing to leave room to pivot and modify the plan as it is being executed. Flexibility is key. If your plan calls for marketing your product or service a certain way, and that strategy doesn't work, you need to change your approach or your business may fail. In addition, too often people fail to leave enough time to establish product-market fit (improving your product over time based on customer feedback). Imagine trying to sell something people don't want. That won't work. So, realize your business plan is a guide; it's meant to give you direction. It's not meant to be restrictive with your ability to learn and apply those lessons to increase the likelihood of a successful outcome. - Kristopher Brian Jones , LSEO.com

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What Is Problem Solving in Business?

Problem-solving in business is defined as implementing processes that reduce or remove obstacles that are preventing you or others from accomplishing operational and strategic business goals.

In business, a problem is a situation that creates a gap between the desired and actual outcomes. In addition, a true problem typically does not have an immediately obvious resolution.

Business problem-solving works best when it is approached through a consistent system in which individuals:

Identify and define the problem
Prioritize the problem based on size, potential impact, and urgency
Complete a root-cause analysis
Develop a variety of possible solutions
Evaluate possible solutions and decide which is most effective
Plan and implement the solution

Why Is Problem-Solving Important in Business?

Understanding the importance of problem-solving skills in the workplace will help you develop as a leader. Problem-solving skills will help you resolve critical issues and conflicts that you come across. Problem-solving is a valued skill in the workplace because it allows you to:

Apply a standard problem-solving system to all challenges
Find the root causes of problems
Quickly deal with short-term business interruptions
Form plans to deal with long-term problems and improve the organization
See challenges as opportunities
Keep your cool during challenges

How Do You Solve Business Problems Effectively?

There are many different problem-solving strategies, but most can be broken into general steps. Here is a six-step method for business problem solving:

1) Identify the Details of the Problem: Gather enough information to accurately define the problem. This can include data on procedures being used, employee actions, relevant workplace rules, and so on. Write down the specific outcome that is needed, but don’t assume what the solution should be.

Use the Five Whys: When assessing a problem, a common strategy is to ask “why” five times. First, ask why the problem occurred. Then, take the answer and ask “why” again, and so on. The intention is to help you get down to the root cause of the problem so you can directly target that core issue with your solution.

2) Creatively Brainstorm Solutions: State every solution you can think of. Write them down. Seek input from those who possess in-depth knowledge of or experience with the problem you’re trying to solve. These insights will provide you with valuable perspectives you can transform into tangible and impactful solutions.

3) Evaluate Solutions and Make a Decision: Assess the feasibility of each solution. Is the deadline realistic? Are there readily available resources you can leverage to successfully implement the solution? What is the return on investment of each solution? If necessary, come up with alternative solutions or adjust the initial ones you brainstormed in step 2.

4) Make a Decision: Finally, make a firm decision on one solution. This final solution should clearly address the root cause of the problem.

Perform a SWOT Analysis: You can use a SWOT analysis to help you decide on the best solution. A SWOT analysis involves identifying the strengths, weaknesses, opportunities, and threats linked to a specific decision. With this framework, your team can assess a decision from various angles, thereby gaining a holistic view of it.

5) Take Action: Write up a detailed plan. This involves developing a comprehensive roadmap that outlines the steps required to implement your solution. The steps should specify milestones, deadlines, roles, and how to obtain the necessary approvals. To ensure accountability, your entire team should have access to this action plan. Each team member should be able to track and share their progress with the group.

6) Gather and Share Feedback: Problem-solving is not a “set it and forget it” process. It’s a dynamic journey that necessitates ongoing attention, deliberation, and refinement to achieve optimal results. Thus, periodic feedback is critical in validating whether the chosen solution creates the desired impact. It allows key stakeholders to check in and make any necessary changes.

What Are Problem-Solving Skills?

Problem-solving skills are specific procedures that can be used to complete one or more of the six general steps of problem-solving (discussed above). Here are five important examples:

Using Emotional Intelligence: You’ll solve problems more calmly when you learn to recognize your own emotional patterns and to empathize with and guide the emotions of others. Avoid knee-jerk responses and making assumptions.

Researching Problems: An effective solution requires an accurate description of the problem. Define simple problems using quick research methods such as asking, “What? Where? When? and How much?.” Difficult problems require more in-depth research, such as data exploration, surveys, and interviews.

Creative Brainstorming: When brainstorming with a group, encourage idea creation by listening attentively to everyone, and recognizing everyone’s unique contributions.

Logical Reasoning: Develop standard logical steps for analyzing possible solutions to problems. Study and apply ideas about logical fallacies, deductive reasoning, and other areas of analytical thought.

Decisiveness: Use an agreed-upon system for choosing a solution, which can include assigning pros and cons to solutions, identifying mandatory results, getting feedback about solutions, choosing the decision-maker(s), and finishing or repeating the process.

How Can You Improve Your Problem-Solving Skills?

Learning how to solve business problems takes time and effort. Though some people appear to have been born with superior problem-solving skills, great problem-solvers usually have taken the time to refine their abilities. You can develop high-level skills for solving problems too, through the following methods:

Ask and Listen: Don’t expect to solve every problem alone. Ask for advice, and listen to it carefully.

Practice Curiosity: Any time you’re involved in solving a problem, practice researching and defining the problem just a little longer than you would naturally.

Break Down Problems: Whenever possible, break large problems into their smallest units. Then, search for solutions to one unit at a time.

Don’t Label Yourself Negatively: Don’t allow a problem to mean something negative about you personally. Separate yourself from it. Look at it objectively and be part of the solution.

Enhance Your Problem-Solving Skills with CMOE

Problem-solving skills in business are not developed overnight. Developing then takes ongoing practice and the right guidance to get right. We encourage you to leverage CMOE’s Problem-Solving and Decision Making in the Workplace workshop to further develop your skills. We’ll help you identify new ways to solve problems methodically so you can create greater impact.

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Home » Business Cycle » Common business problems

Overcome your business problems

Your business is chugging along delivering its products and services and then BAM! You hit a brick wall. Whether it’s an employee matter, a delivery problem, or a logistics issue, the impact spreads across the rest of your business. Sound familiar? You’re not alone. If you’re running a small company or startup, you’ve probably faced a range of common business problems – and if you haven’t, you most likely will soon. Solving business challenges requires preparation, early identification and a plan to address any issues.

Discover your strengths as a business owner – and crush your problems

Identifying common business problems

Determining your company’s issues helps to break your business challenges into two sections: surface-level business problems (easy fixes) and core business problems (more intensive solutions).

Surface-level business problems

Surface-level problems in business typically affect day-to-day business management and manifest as employee or customer dissatisfaction. These issues can also occur naturally in the market. Examples of common business problems in this category include:

High employee turnover rate

Increase in competition

Falling sales or lack of growth

Supply chain issues

Poor financial management

Low customer loyalty

Core business problems

These arise when we dig deeper into the reasons behind surface-level issues, which – at first glance – seem easier to fix. However, they’re both related, and to fix surface-level problems permanently, you must get to the core of what’s really holding your company back.

Tony tells us, “Success is 80% psychology and 20% mechanics,” which means failure is also about your psychology . Overcoming common business problems will take more than putting up an ad or increasing your marketing budget – dig deeper, take action, and amazing things will happen.

The 9 most common business problems

Every business experiences problems, regardless of your industry, business size or the phase of your business cycle. If your business is stagnant, you feel stuck, or you’re not experiencing the growth you desire, determine if you’re experiencing one of these common business problems.

1. Finding your purpose

Does your company feel adrift? Do you change your mission statement constantly? If so, you’re experiencing a lack of purpose, one of the most common problems in business. After all, how can you expect to create raving fan employees if you don’t wake up every morning excited for the day ahead? In addition, a lack of purpose can create employee retention problems .

Being a strong leader is synonymous with having a sense of purpose , and a genuine belief in personal success will help your business thrive. Your purpose gives you passion, drive, certainty, and the ability to overcome towering obstacles. A business is only as strong as the psychology of its leader – it’s up to you to do the work and bring purpose to your company.

2. Developing your brand identity

Developing your brand identity is vital to marketing and sales success, and struggling to establish an identity is one of the biggest business problems you’ll experience during the growth stage. Your identity epitomizes your company’s core values , mission and goals and profoundly affects company culture, impacting your ability to hire and retain the best employees.

Your brand identity drives the emotional connection with your consumer and ultimately creates customer loyalty . With a strong brand identity, you know who you are and your direction. Without it, you’ll be lost in the dark and struggle to inspire raving fan customers .

3. Providing value

Shrinking profits is a common business problem that can sometimes lead to bankruptcy. It’s easy to blame the market, but there’s always a reason for significant market shifts. If customers are flocking to competitors, then take note – you probably lack specific services or features they deem valuable.

To be successful in business, you must practice constant strategic innovation . Determine your X-factor – what sets you apart from the competition? How do you bring more value to your customers? What makes your company different ? If you don’t know the answers to these questions, it’s time to sit down and think about them.

4. Planning ahead

Purpose and identity are crucial to your success, but also remember to make a massive action plan (MAP), which allows you to stay agile in response to business challenges while keeping your eye on the prize. For example, most business owners aren’t prepared for a recession even though the economy is in recession 60% of the time. It’s easy to feel confident during good times, but it’s the hardships that matter.

A MAP outlines how your business will survive an income downturn, irrespective of whether it’s caused by a recession or the shifting valuation of your product or service. If your business isn’t built to weather the storms, it’ll be dead in the water. Get prepared for a recession and other adverse economic possibilities before they happen.

5. Creating an exit strategy

No one wants to think about the collapse of their business, which is why so few owners bother with developing an exit strategy . However, in many cases, leaving the business at some point is the ultimate goal, whether through a leveraged buyout , passing the business onto your children, or selling to key employees. Knowing your preferred endgame will help you develop the best path to get there.

Forty-five percent of business owners spend over 40 hours weekly in the office and never find a way to extricate themselves. Does that sound like you? If so, it’s time to start working on your exit strategy.

6. Controlling your fear

New business owners often allow the fear of uncertainty to affect how they run their organizations. Fear of failure, not being a good enough leader, and fear of the economy’s future can create a scarcity mindset and negatively affect decisions and behaviors. Hyper-focusing on these things will set your business up for failure and reduce the chances of achieving success.

If you have these limiting beliefs , it’s time to change them to empowering beliefs that can help you thrive as a leader. Use fear to push your business to greater heights . Decide that success will happen no matter what, and many business problems will resolve themselves along the way.

7. Harnessing the power of technology

New entrepreneurs often have an old-school mindset and make the mistake of thinking they don’t need technology. Others believe they’re in a business that doesn’t need technology to succeed. In today’s economy, it’s essential to harness the power of technology to avoid being disrupted by competitors.

From artificial intelligence to automation, emerging tech has a place in every business. Address these common business problems with strategic innovation team meetings to discuss incorporating new technology into your business to beat your competition .

8. Developing your skills

While it’s crucial to shift your mindset, control your emotions and be decisive in business, it’s also important to take a realistic look at your strengths and weaknesses. To be successful, business owners need skills like reading financial statements , hiring the right employees and scaling mindfully .

Your psychology and skillset are the foundation you’ll build for the rest of your business. You can’t build a sturdy structure without sealing the cracks and strengthening the base. You can personally develop these skills or outsource them to focus on other aspects of the business. Being honest about current and future challenges allows you to scale your business sustainably.

9. Asking for help

When entrepreneurs lack specific skills, the inability to reach out to available resources is one of their biggest problems in business. Being a great leader means using everything at your disposal to get the job done. Resourcefulness is one of a leader’s top traits . When it comes to business, the best leaders leverage what they have to fill in the gaps.

Stop convincing yourself that “strong leaders don’t ask for support,” and you’ll find that business help is out there. Sign up for a free CEO Strategy Session and discover new strategies to supercharge your success. You’ll find resources to solve your current business problems and create a blueprint for lasting organizational change .

Examples of companies experiencing problems

Even the most prominent businesses were scrappy startups at the beginning. Irrespective of industry, you’ll experience the same universal challenges businesses worldwide face. How you view these business problems is critical: Are they obstacles or opportunities for growth ?

Apple overcame numerous business challenges – and near bankruptcy – before becoming a force of nature, and they didn’t do it by thinking small. When sales were down, Apple turned to marketing and innovation to solve problems, which led to the creation of the society-changing iPhone.

Starbucks is another household name that triumphed over business problems. During the 2008 recession, the earnings of this billion-dollar coffee chain dropped by more than 50%. In response, the company brought back CEO Howard Schultz, who showed exemplary crisis leadership . Schultz examined Starbucks’ practices and concluded they were in the customer business, not the coffee business. He put the focus back on customers and dragged the company back from the brink of failure.

Remember, business problems are just opportunities in disguise. It’s time to stop living in fear and start building the skills and mindset you need to overcome any challenge .

Ready to crush your business problems?

Discover how to defeat common business problems with Tony Robbins’ free 7 Forces of Business Mastery content series.

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A Major Part of Biden’s Student Loan Repayment Plan Is Restored

Federal appellate judges ruled that the Biden administration’s new student loan repayment plan could continue to operate as legal challenges to the program work their way through the courts.

President Biden on a blue stage with signs about canceling student debt behind him.

By Tara Siegel Bernard

Major components of President Biden’s student loan repayment plan can continue to operate as lawsuits challenging it wind through the legal system, a federal appellate court ruled on Sunday. That frees the administration to cut certain borrowers’ payments by as much as half, a benefit that had been previously scheduled but blocked.

The order, from the U.S. Court of Appeals for the 10th Circuit in Denver, is the latest twist in a saga that began to unfold last week after two federal judges temporarily suspended parts of the plan known as SAVE. That program, which has about eight million enrollees, ties borrowers’ monthly payment amounts to their income and household size.

Two judges, one in Kansas and another in Missouri, last Monday issued separate preliminary injunctions, which are tied to lawsuits that were filed in the spring by two groups of Republican-led states that seek to upend the SAVE program.

The Kansas order suspended parts of the program that were not yet in place, including a big decrease in monthly payments for people with undergraduate debt — to 5 percent of their discretionary income from 10 percent — which was to take effect on July 1. The judge in Missouri blocked new debt cancellation through the SAVE program, though legal experts initially said it wasn’t clear how widely that ruling should be interpreted.

To comply with the Kansas district court’s injunction, the Education Department said on Friday that it would pause monthly bills for borrowers in the SAVE program who are required to make payments as it reconfigured those amounts once again. (More than four million low-income borrowers qualify for $0 monthly payments.) More than 124,000 borrowers had already received billing notices calculated with their new lower payments, the Education department said in a court filing.

But now that an appeals court has temporarily lifted the Kansas injunction, the Biden administration can move forward and roll out the rest of the SAVE program, including the reduction in payments for undergraduate borrowers, while it appeals the preliminary injunction.

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Jeff Bezos' plan for The Washington Post is imploding

Jeff Bezos is trying to end a financial catastrophe at The Washington Post, employing new leaders.
But on Friday a crucial player, Robert Winnett, decided not to join and helm the newsroom after all.
It followed an exhumation of his UK past and that of his would-be boss. Now Bezos needs a new plan.

Jeff Bezos has grand plans to remake The Washington Post . They seem to be blowing up in his face.

The incoming editor for the newsroom — Robert Winnett, the golden boy of the UK's Daily Telegraph newspaper — pulled out of the job Friday morning.

He ditched the role after a slew of revelations about his past as a writer in London and that of Will Lewis, the Washington Post's publisher and an old friend who tapped him for the top job.

The news was confirmed by the Telegraph's editor, Chris Evans, in a message to staff, seen by Business Insider. It said Winnett would stay there.

A recent furor over Winnett's hire revealed a profound culture clash between the high morals of the Post and seemingly the less-scrupulous British outlets — the Telegraph and London's Sunday Times — where Lewis and Winnett cut their teeth.

And though Lewis remains in his post, US media elites are openly wondering whether he, too, will go . Even if he doesn't, Winnett's exit has blasted a hole in his plan and his credibility.

This also leaves Bezos with a problem. He hoped Lewis and Winnett could revamp the newsroom and give the Post new life.

The outlet, which Bezos bought in 2013, has been hemorrhaging money and readers.

Lewis recently told Post staff that it had lost half its readers since 2020 and last year lost more than $1 million a week.

Watch: Why the Pentagon leak is embarrassing for the US government

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COMMENTS

How To Write The Best Problem Statement
Your business plan needs a problem statement, because every great company starts by solving an important problem. The more accurately you articulate the problem, the more valuable the solution will be. A common founder faux pas is overlooking the importance of giving the problem more weight than the solution. Founders get so excited about their ...
How to Create a Problem and Solution Statement
Keep the team on the same page. A clearly defined problem serves as a guidepost for you and your team. It ensures that everyone knows what the goal is and stays aligned. Whenever there's a question about what the business should focus on, you can always circle back to that original problem statement. 5.
Business Problem Statement With Examples
They include: 1. Define the problem. 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. 2.
50 Business Problem Statement Examples [+Tips To Write]
Problem Statement: Rigorous labor-intensive processing due to manual paperwork management. 3. Streaming Entertainment Service Company. Netflix, Hulu, and other streaming services came to solve the problem of people having to go to video stores to rent movies.
Effective Problem Statement Examples in Business
Examples of problem statements in business . There are tons of successful examples of problem statements from various companies. Let's take Netflix for example. They solved the problem of having to go to the video store to rent movies. Netflix originally eliminated the need to go to the video store by delivering movies in an envelope to your ...
Mastering the Art of Business Problem Statements: A Comprehensive Guide
The business problem statement provides the impetus for a business initiative in practical business related terms. It is a description of an issue currently existing and the context for how it will be addressed. ... When developing a strategic plan for an organisation, a problem statement template can be used to identify and analyse the ...
How to Write a Business Plan: Guide + Examples
Most business plans also include financial forecasts for the future. These set sales goals, budget for expenses, and predict profits and cash flow. A good business plan is much more than just a document that you write once and forget about. It's also a guide that helps you outline and achieve your goals. After completing your plan, you can ...
Problem Statements by Ex-Mckinsey
Includes best practices, examples, and a free problem statement template at the bottom. "A problem well stated is a problem half solved.". - Charles Kettering, Early 1900s American Inventor. I remember my first day on my first project at McKinsey, the partner got the team in a room for us to spend a few hours "defining the problem ...
Problem Statement Templates and Examples for Businesses
A problem statement (also referred to as a "framing statement") is no more than 100-150 words outlining the problem to be solved and your proposed solution. It helps stakeholders immediately grasp the significance of your startup's mission and the opportunity it represents. To be effective, the problem statement should be specific enough to ...
How to Write a Problem Statement [Startup Edition]
1. Clearly Define The Problem. First and foremost, you need to make sure that the problem you are solving is incredibly clear and well-defined. If you are wishy-washy with the problem, that will show a lack of conviction in the eyes of an investor or stakeholder that might be evaluating your business plan.
Writing a Business Problem Statement
Here are the key elements of a successful project statement: Below, we provide a step-by-step problem statement example. Read on to learn how a business owner might go about summarizing a problem, defining that problem's impact, and developing potential solutions for that problem. 1. Summary of the Problem.
How To Write a Problem Statement for Your Business Idea
Step 2: Write a Simple Statement of the Problem from the Customer's Perspective. Now that you have your project vision in mind, it's time to define the problem you're trying to solve. Craft a one-sentence statement that succinctly describes the issue from the customer's point of view. This statement should be simple, yet powerful enough ...
10 Step Process for Effective Business Problem Solving
And you can do the same. By following this 10-step process, you can develop your problem-solving skills and approach any issue that arises with confidence. 1. Define the problem. When a problem arises, it can be very easy to jump right into creating a solution. However, if you don't thoroughly examine what led to the problem in the first ...
Write your business plan
Go into detail about the problems your business solves. Be specific, and list out the consumers, organization, or businesses your company plans to serve. ... Example lean business plan. Before you write your business plan, read this example business plan written by a fictional business owner, Andrew, who owns a toy company.
11 Common Business Plan Mistakes to Avoid in 2024
When your plan is done, your company is done. Do a lean plan and keep it fresh. 3. Losing focus on cash. Most people think in terms of profits instead of cash. When you imagine a new business, you think of what it would cost to make the product, what you could sell it for, and what the profits per unit might be.
Problem Statement Examples For Your Company
The problem statement will serve as the basis for the introductory section, directing the reader's attention to the issues that your proposed business plan will address. A problem statement is a communication tool. Problem statements are important to businesses, individuals and other entities to develop projects focused on improvement.
How to Write a Business Problem Statement for Your Business Plan
You may know how necessary it is to write a business plan for your company. What you may not know of, however, are the tools and techniques that can help you...
11 Common Business Problems and How You Can Solve Them
Here are 11 common business problems with potential solutions to help you develop plans and strategies for your own organization: 1. Uncertain purpose. Some companies experience a loss of purpose or uncertainty. This can happen if an organization participates in multiple different industries or frequently changes its mission statement.
How To Identify And Solve Problems In Your Business
Use The 'Five Whys' Method. One of our favorite techniques here at ROK is the simple yet effective "Five Whys" method. It involves gathering a team and repeatedly asking "why ...
Business problem solving
Great problem solvers are made, not born. That's what we've found after decades of problem solving with leaders across business, nonprofit, and policy sectors. These leaders learn to adopt a particularly open and curious mindset, and adhere to a systematic process for cracking even the most inscrutable problems.
Nine Common Business Plan Mistakes To Avoid As A New Entrepreneur
4. Failing To Research The Target Market. One business plan mistake that new entrepreneurs often make is failing to research their target market properly. They may have a great product or service ...
What Is Problem Solving in Business?
Problem-solving in business is defined as implementing processes that reduce or remove obstacles that are preventing you or others from accomplishing operational and strategic business goals. In business, a problem is a situation that creates a gap between the desired and actual outcomes. In addition, a true problem typically does not have an ...
Overcome your business problems
Surface-level problems in business typically affect day-to-day business management and manifest as employee or customer dissatisfaction. These issues can also occur naturally in the market. Examples of common business problems in this category include: High employee turnover rate. Increase in competition. Falling sales or lack of growth.
A Major Part of Biden's Student Loan Repayment Plan Is Restored
Major components of President Biden's student loan repayment plan can continue to operate as lawsuits challenging it wind through the legal system, a federal appellate court ruled on Sunday.
Boeing agrees to buy Spirit AeroSystems as part of plan to shore up
Airbus' business with Spirit accounted for $1.1 billion, 19% of its revenue in 2023, according to company filings, while $3.9 billion, or 64% came from business with Boeing.
Siemens Energy Powers Up Grid Business,10,000 New Hires Fuel ...
Siemens Energy AG (OTC:SMEGF) reportedly planned to hire more than 10,000 new employees to put its electricity grid business at the center of an ambitious six-year growth plan. The company seeks ...
Jeff Bezos' plan for The Washington Post is imploding
This also leaves Bezos with a problem. He hoped Lewis and Winnett could revamp the newsroom and give the Post new life. The outlet, which Bezos bought in 2013, has been hemorrhaging money and readers.
Supreme Court Halts Enforcement of the EPA's Plan to Limit Downwind
WASHINGTON (AP) — The Supreme Court is putting the Environmental Protection Agency's air pollution-fighting "good neighbor" plan on hold while legal challenges continue, the conservative ...

Business Problem Statement Explained with Examples

What Is a Business Problem Statement?

How to Write a Business Problem Statement?

1. Define the problem

2. Provide the problem analysis

3. Propose a solution

4. Consider the audience

How to Develop a Business Problem Statement

Business Problem Statement Framework

Business Problem Statement Templates

Template 1:

Business Problem Statement Examples

Example 1: A problem statement by a software company

Example 2: A problem statement by a manufacturing company

Solve Problems Faster with a Business Problem Statement

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50 Business Problem Statement Examples [+Tips To Write]

What’s The Meaning Of A Problem Statement?

Pointers On How To Write A Problem Statement

1. A Description Of How Things Should Work

2. An Overview Of What The Problem Is And Explaining Its Impact

3. An Explanation Of The Cost Implications

4. Evidence To Support Your Theory

5. Suggestions For The Solutions

6. Benefits Of Your Suggested Solutions

7. A Summary Of The Problem And The Expected Solution

50 Business Problem Statement Examples

2. Manufacturing

3. Streaming Entertainment Service Company

4. Software Company

5. Busy Office

6. Engineering

7. Healthcare Center

8. Cosmetics

9. Ecommerce Business

10. Business Startup

11. Consultancy Firm

12. SaaS Company

13. Recruitment Firms

14. Employee Management

15. Learning Institutions

16. Real Estate

17. Software Application

18. Sales Strategies

19. Customer Care

22. Digital Transformation

23. Agricultural Firm

24. Waste Management

25. Virtual Assistant

Other examples of problem statement ideas include:

Conclusion

most recent

Effective Problem Statement Examples in Business

Get help with your marketing

Purpose of a problem statement ​

Examples of problem statements in business ​

Key elements of a good problem statement ​

Ideal situation

Consequences

How to write a problem statement ​

Describe the ideal situation you aim to achieve

Choose the biggest problem to solve

Consider audience's needs

Provide facts about the problem

Explain the benefits of your proposed solution

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Business Architecture Categories

1. Strategy

2. Service / Products

4. Processes

5. Applications

Purpose of a problem statement

Examples of problem statements in business

Key elements of a good problem statement

How to write a problem statement