On our weekly live stream a few weeks ago, Becky mentioned that a productive use of this time right now is to reflect on your business. Examine your revenue streams and your customer segments, dive deep into your business model canvas. I wanted to start this week off by giving you another way to reflect on your business: a SWOT Analysis.
Now, I’m sure you’ve heard a lot about SWOT before, and you might brush it off. However, I believe it’s a strategic planning technique that can generate positive change and growth within your company. SWOT stands for strengths, weaknesses, opportunities, and threats. Below I am going to show you the methodology behind each section of the SWOT analysis and what questions you need to ask. Let’s get started!
How to Conduct a SWOT Analysis to Reflect on Your Business
The strengths and weaknesses are internal to your company, meaning that you have control over them and how they change change over time – think location, employees, and company reputation. Opportunities and threats are external, meaning they are not in your control, these are things going on in the outside market – think prices, competitors, and customer trends. The way the SWOT analysis works is it organizes your companies significant strengths, weaknesses, opportunities, and threats into a four-square analysis template, like the ones listed here.
A team effort is required to complete a thorough analysis. For that reason, you need to use a group of people that work within different sectors of the company. A comprehensive analysis will include different perspectives and ideas. The brainstorming session should consist of each member of your team generating ideas for each quadrant of the SWOT analysis template. The list should be prioritized from the highest to the lowest priority.
Strengths are the positive attributes of your company, this is where you should outline the things that your company does exceptionally well. Consider the qualities that set you apart from your competitors, maybe it’s your human resources department, your customer service, or your tangible assets, write it all down! Think about what makes your company unique.
- What are your strongest assets and what internal resources do you have?
- Do you have a unique selling proposition and what is your competitive advantage?
- What business processes are successful?
After you’ve completed your strengths, it’s time for the challenging part, listing your companies main weaknesses. This is a great time to practice being critical and self-aware, it will only help you in the long-run! Weaknesses hold your business back and reduce your value output, ultimately putting you at a competitive disadvantage. They can range from budgetary limitations to management issues. The good news is, there is plenty of room for improvement in this area.
- In what areas do you need to improve?
- What expertise do you lack and what technology or equipment needs to be updated?
- Do you have resource limitations or any cash flow problems?
- Is your location ideal for success?
- In what areas are your competitors superior?
It’s important to know that opportunities are external factors that can potentially contribute to your success. Defining and pursuing favorable opportunities can lead to company growth, improved sales, or a general advancement of your company’s mission. Maybe you are generating more positive customer feedback than normal. Or experiencing a time of innovation. These are opportunities!
- What trends or opportunities might positively effect your company?
- Does your company have a positive reputation and perception?
- Has there been recent changes in the market or new talent we can take advantage of?
- Do our competitors have any weaknesses we can take advantage of?
- Is there a need in the industry that we could meet or offer?
I understand that this part can seem alarming but it’s critical to know the external factors that are out of your company’s control. When you reflect on your business, you can’t leave out the tough stuff. Consequently, threats are classified as things that pose a risk to your company, such as financial risks or new competitors. That’s why it’s smart to have contingency plans in case the unexpected occurs. If there are things out there that could jeopardize your company, you need to know!
- Who are your potential competitors and what do they offer?
- Is your target market or consumer behavior decreasing?
- Is your technology secure and will future technological developments negatively affect your company?
- Are your employees content?
Then, once you’ve created a SWOT analysis and answered all the questions, you can use your strengths and weaknesses to leverage the opportunities and threats. In other words, you can use your strengths to take advantage of your weaknesses and counter the threats. Look at your opportunities and gather ideas on how they can reduce your weaknesses. By doing this, you can create a list of actions your company can take. Produce a plan and schedule your actions on a company calendar. Together with your actions and goals, you will now have a comprehensive business plan!
Using the SWOT analysis is a great way to reflect on your business. Have you considered creating your own? While on the topic of business, I hope you will join our next live stream this Wednesday at 6 p.m. MT. You’ll get free business teaching from me and other WealthBuilders coaches! Click here to register.