SWOT – can it really make a difference to my business?
Now I love a good SWOT analysis. As a small business owner, it helps me step back and evaluate my business so that I can decide where to focus my limited time and resources. I like it being square (mmm, neat boxes) and it being simple. But does it really do anything for me that I didn’t know already?
For me the answer is a resounding yes.
It helps me think clearly about my business, examine changes and consider trends from different angles. It informs my overall strategy, my daily actions and my quarterly goals.
Just in case you have not come across it before, a SWOT analysis is simply an acronym for Strengths, Weaknesses, Opportunities and Threats – looking at what your business is good and not so good at, what is out there that you should be jumping on or worrying about.
Sometimes it is hard to step back far enough from your business to list these objectively, so here are some pointers to make the exercise worthwhile:
Just one. Be honest.
Draw a 4-square grid and list your strengths in the first box, your weaknesses in the second… I think you get the picture.
The Strengths and Weaknesses are the INTERNAL issues for your company, the things you can change. Your image, finances or product portfolio for example.
The Opportunities and Threats are EXTERNAL issues. You can’t change these but by being aware of them you can make the most of the opportunities and mitigate the threats.
Some questions to help complete your SWOT analysis
- What do you do well?
- What resources do you have? Eg. staff, skills, reputation, network, capital, customers, credit, patents, technology etc…
- What do you do better than your competition? Eg. R&D, market share…
- What other positive aspects increase your competitive advantage?
- What needs improving to achieve your goals or compete on a level playing field?
- What does your business lack? Eg. skills, technology, profile…
- What other things have a negative impact on your business (location, resources, etc…)
- What is going on in the market / industry?
- What changes are creating opportunity? Eg. new/changing markets, new products, new staff…
- How time critical are these opportunities?
- What are your competitors up to?
- What are the trends in the wider market / industry?
- What is happening with your suppliers?
- What risks might threaten your profile?
OK. So you have done all this? Great.
Now do it again, this time from the viewpoint of the customer. Honestly.
And again, from your staff, your stakeholders, logistics department, investors, sales team… Each of these teams are likely to highlight different things.
Develop your strategies
Now its time to work out which are the priority issues in here so you can use the information to develop short and long term strategies. These results will help your daily decision making as you seek to maximise on opportunities and minimise risks.
- If something is a STRENGTH + OPPORTUNITY you should be all over this like a rash.
- If something is a WEAKNESS and a THREAT, once again you need to act fast.
- Think about how can you use your STRENGTHS to mitigate the THREATS that are out there, through marketing or activity?
- Consider how can you use the OPPORTUNITIES to minimise your WEAKNESSES?
So that’s the strategy planning done, with one form. One little four-square box. Maybe that is a little simplistic, but it is easy to over-complicate things.
Repeat the exercise every three months or so. See what has changed, because it will.
By being a SWOT you can be all over these changes and developments, can be more flexible and are less likely to be surprised. This gives you confidence in your actions and makes your goals more achievable. If you don’t already – try being a SWOT…Back to blog