05 Apr Planning for the Future of Your Business
A SWOT analysis continues to be a valuable technique for better understanding the Strengths and Weaknesses of your business, and for identifying potential Opportunities and Threats. At whatever stage your business is in, a well-executed SWOT analysis can provide you with the insights you need to craft a coherent and successful competitive position. For start-up businesses, a SWOT analysis can help you figure out where you are and where you need to be in terms of preparing your business development plan. For those with established businesses, the SWOT analysis can be a tool that you can use over and over again to explore new opportunities and improve your overall decision making process.
Whether you are facing a major business decision, or are embarking on strategic planning for the coming year, a SWOT analysis enables you to look at things from all angles – taking into consideration both internal and external factors. By taking a formalized look at areas in which your business in performing well in, as well as areas where you need work, a SWOT analysis can help you uncover vital information that will not only help your business in the short term, but can be a critical tool in planning for your company’s future.
Before you embark on your next (or perhaps even first) SWOT analysis, following are some key points to keep in mind:
- Keep an open mind. Performing a SWOT analysis helps you thoroughly understand your business by presenting a viewpoint of the company’s internal and external operations from a new angle. It helps you understand your business better, forces you to address your weaknesses, deter threats, capitalize on opportunities and develop business goals and strategies to achieve them.
- Start defining internal factors first by being realistic about your own strengths and weaknesses. Talking yourself up or down too much may leave room for avoidable errors. Figure out where you actually are today, then what you want to be in the future. As you consider your analysis, be open to the possibilities that exist within a weakness or a threat. You can then counter them with a robust set of strategies that build upon strengths and opportunities.
- Be specific and realistic. This is the perfect time to face the nitty-gritty facts. Is the competition surpassing you, and in what areas are they doing so? What can you actually achieve in the next five or ten years with your current budget?
- Ask for feedback. Getting an honest opinion from clients, coworkers, and friends will only help you serve all parties more effectively.
- Focus on and prioritize on the important items. Recarpeting the office may need to take a backseat if your website is in need of an overhaul.
- Take action.
Why is a SWOT analysis so important for my business?
Performing a SWOT analysis helps you thoroughly understand your business by presenting a viewpoint of the company’s internal and external operations from a new angle. It helps you understand your business better, forces you to address your weaknesses, deter threats, capitalize on opportunities and develop business goals and strategies to achieve them.
When should I perform a SWOT?
I always suggest clients perform a SWOT analysis every 6 to 12 months, whenever a significant decision is being made, or there a new external threat looming that may impact your business.
Here is a list of example scenarios which may call for an evaluation:
- You are considering opening a new branch of your business
- A similar business moved in within a mile from you
- You are gaining or losing more clients than expected
- You’re ready to update or improve your use of digital media
- You are looking to hire or replace key employees
As you consider your analysis, be open to the possibilities that exist within a weakness or a threat. You can then counter them with a robust set of strategies that build upon strengths and opportunities.
How do I perform a SWOT analysis?
The goal is to turn your weaknesses into strengths and your threats into opportunities.
Here is a simple sample of what to ask yourself:
What do you do well? (seriously. We don’t do everything well)
What unique resources can you draw on?
What do others see as your strengths?
What could you improve?
Where do you have fewer resources than others?
What are others likely to see as weaknesses?
What opportunities are open to you?
What trends could you take advantage of?
How can you turn your strengths into opportunities?
What threats could harm you?
What is your competition doing?
What threats do your weaknesses expose you to?
Additionally, when preparing for and performing a SWOT analysis, keep in mind these important points:
- Start defining internal factors first by being realistic about your own strengths and weaknesses
- Figure out where you are today, and where you WANT to be in the future
- Avoid grey areas – BE SPECIFIC
- Be realistic about your competition – are they doing a better job?
- Ask for feedback – from clients, from employees … and from others whose opinions you trust
- Brainstorm with others in your organization – not just top level employees
- Focus and prioritize on the important items
- Take action
Whether you are embarking on a SWOT analysis as part of your overall strategic planning for your company, to help you make a big business decision, or to analyze ways to improve operations, a SWOT analysis remains one of the most important tools for today’s CEOs and business owners. As a CEO, a proper SWOT analysis can provide you with the all-important overview of your company that is needed as you plan for the future of your business – and, as a work in progress, can ensure that you continue to monitor your company’s strengths, weaknesses, opportunities and threats from year to year as you continue to grow your business.
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