How is your business doing? No, how is it really doing? Sometimes we get so caught up in the daily routines of our business that we don’t stop to assess how we’re really doing. Your SWOT analysis is your antidote for that. For instance:
- What is currently working well and what is not?
- Why is one thing working well and another is not?
- What are you looking to change this year?
- To what extent do you know that change will be good?
- How do you know it won’t bomb?
And there are a host of other questions that come to mind…
In the 60s, four business gurus got together and published a book called Business Policy, Text and Cases. While the title doesn’t necessarily grab, these guys introduced a concept to the business community that does grab us. The concept is called the SWOT
SWOT stands for: strengths, weaknesses, opportunities and threats. Conducting a SWOT analysis can revolutionize your business.
There are a number of reasons for conducting a SWOT analysis of your business:
If you’re just starting a business
If you’re launching something new or branching into a new market
As an annual checkup
When your business has hit a downturn, and you’re not sure why
If you simply want to improve your sales
Making any major business decision
To generate new products and services
The first two elements of a SWOT analysis, strengths and weaknesses, are internal. Those represent who you are. The last two
elements, opportunities and threats, are external to your business. Think of each pair as juxtaposing each other.
For this reason, it’s a good idea to list each pair in two columns: contrasting your strengths with your weaknesses in two columns. And then contrasting your opportunities with their respective threats.
A SWOT analysis follows the basic rules of brainstorming in that anything goes, and you want to generate as many ideas as possible. For this reason, it’s always beneficial to conduct a SWOT analysis as a team. Capture your ideas by writing them down on a whiteboard, flipchart, or laptop and project them for all to see on a screen.
Below are some questions you can pose in brainstorming these four elements.
As you brainstorm your strengths, think not only in terms of your business, but also include the personal strengths of your team.
- What does your business do really well?
- What do your customers like best about doing business with you?
- What do your customers like best about your products and services?
- What strengths do you have that set you apart from other similar businesses?
- To what extent are you currently leveraging your chief strengths?
- What strengths do you have that your business has ignored or downplayed?
- What latent strengths do you possess that you could develop?
- What strengths do you think you have but that others challenge?
- What would you say your greatest strength is as a business?
- Think of your most successful products or services. How well do those products and services exploit your greatest strength?
- What other questions can you ask?
Once you’ve exhausted your brainstorming session on strengths, now’s the time to consider your weaknesses.
Be honest and transparent about these. You won’t be helping yourself by inflating your strengths or minimizing your weaknesses.
- What are some areas where your business does not do so well?
- What do your customers like least about doing business with you?
- What do they like least about your products and services?
- What weaknesses do you have that make you vulnerable to your competition?
- To what extent do your products and services expose your weaknesses?
- What weaknesses do you have that you either ignore or downplay in your business?
- What weaknesses do you have that indicate you should simply avoid that area altogether
- What weaknesses do you think you have that others deny seeing in your business?
- What would you list as your greatest single weakness as a business?
- To what extent are you trying to run aspects of your business using that weakness?
- What is your least successful product or service? What’s the connection between those and your weaknesses?
- What other questions come to mind about your weaknesses?
After you’ve thoroughly discussed your weaknesses, spend a few minutes comparing your strengths with your weaknesses. What do you see? What insights does this comparison provide you with?
Now turn your attention to the external factors affecting your business. Conduct the following discussion much as you did above.
- Based on your current sales trends, what opportunities appear to present themselves?
- Considering the market, what other opportunities seem to be lurking out there?
- What are other businesses doing that reveal an untapped opportunity for you?
- If your current product or service became obsolete, what new opportunity would you turn to?
- With your strengths in mind, what opportunities exist that you have not yet explored?
- With your weaknesses in mind, what opportunities exist that you should probably avoid?
- What cultural or societal trends are occurring that could open new opportunities for your
- business? What would those opportunities be?
- What opportunities have you wanted to explore but haven’t had time to explore?
- What other opportunities do you see out there?
- Considering everything else, what is your single greatest opportunity?
Having completed your discussion on opportunities, look now to those external factors that threaten your business:
- What is the greatest threat to the continued success of your top-selling product or service?
- What singular threat out there has you most concerned?
- What threats does your competition pose to your business?
- What market trends threaten your business?
- What cultural or society trends pose a threat to your success?
- Considering your weaknesses, which threats concern you most?
- With all else in mind, what do you see as your single greatest threat?
Now bring everything together that you’ve discussed in your SWOT analysis. From each of the four areas, rehearse what you now know about your business.
- What conclusions does your SWOT analysis bring you to?
- In what ways did the SWOT analysis help you better understand your business?
- What decisions does this analysis drive?
- What’s next?
As you can see, a SWOT analysis gives you a thorough look at your business and can prompt strategic decisions to help your business grow and avoid the pitfalls common to so many failed businesses.
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