A SWOT Analysis is a business tool to identify your Strengths, Weaknesses, Opportunities, and Threats. When done with a team it can lead to great insight about things you should continue, change, or improve. It will also help prioritize actions as you start to implement your business strategy. Not only can a SWOT bring clarity to what needs to be fixed, but it can also generate new ideas that produce services or products to increase the bottom line. Here’s 5 reasons why your business should complete a SWOT Analysis:
Bring your Team Together. Small business owner’s typically shoulder the stress of a business. But many times they have a team they can rely on. Not only can a SWOT produce ideas for your business it can also boost morale in your team by giving them a voice and ownership in their ideas. They may also see things that an owner does not see.
If you are a solopreneur consider bringing outside connections together to help you perform a SWOT so you will have multiple perspectives. Ask your CPA, business coach, banker, or advisor.
Reinforce What you’re Great At. Listing your Strengths is important. These are the internal things you are great at and do better than your competition. These items cannot be easily copied by a competitor. Consider how you can use this list in a new marketing campaign to generate new business.
Analyze your Weak Points. No one likes to admit their weaknesses but in order to overcome them it’s important to be realistic. Consider the things you do poorly, something you are doing now but shouldn’t be, a broken business process, how you hire, poor cash flow, unreliable financial information, etc.
The upside of making this list is you have complete control to make improvements. This has nothing to do with outside influence, the market, or the economy. It is solely internal and can be fixed. The sooner a weakness is fixed the better.
Concentrate on New Opportunities. Making a list of external opportunities is a great way to spark new ideas. Thinking about your market, what has recently changed that you can take advantage of? Has a competitor closed, a new government policy, technology advances, or an upcoming event?
Many times you are too busy in the day to day operations that you don’t make time to innovate and develop new services or new products. By doing that you can slowly become obsolete because you’re not keeping up with changes in what your customers need or want.
Prepare for Threats Beyond your Control. Although you may not like it, there are external issues beyond your control. You may not be able to change them but you should definitely be aware and have a plan to overcome or work around these threats. Are there new competitors in your market, a new law that effects your business, or changes in the economy?
It’s important to not let these threats paralyze you. Doing nothing or ignoring is not a good plan. A good plan would be to match these threats with a current strength you have already identified. Can any of your strengths help avoid or lessen a threat? For example, if there is a new competitor coming into your market, what do you do better than this competitor (something they can’t easily replicate)? If you don’t have an answer to that, you better get to planning!
If this interests you and you want to know more about this topic, email Joy at joy@lizottecpa.com