Regularly assessing your business’s strengths, weaknesses, opportunities and threats is a vital component of managing your business effectively. Every enterprise is limited, to a lesser or greater degree, by its resources, so it is unlikely you will be able to concentrate on improving these areas all at the same time. This is where frequent SWOT mapping can prove most effective. By charting your progress over time in each of these paramount areas, you can determine which requires the most input at any given time. It’s also the key to unlocking the secrets that will help you blitz the competition. Here are a few pointers to keep in mind when drawing up the ultimate SWOT analysis:
Sticking to your strengths… or not
A lot of business owners will put most of their focus on the ‘Strengths’ segment of the SWOT analysis, because they perceive it as more valuable in terms of competitive positioning. This is not correct. All of the areas of your SWOT analysis are equally important and concentrating more on one area – even strengths – is a major oversight that can cost you some serious gains in the long run. You know those guys at the gym who spend way too much time pumping iron and not enough on leg day? This could be your business. And imagine you were trying to strengthen your body, but you didn’t bother to take into account a previous injury or the chance of a future one. You’d be more likely to hurt yourself, which would just set you back in achieving your goals, wouldn’t it? This means that strengthening your business is a lot like strengthening your body; you need to be discerning about when it’s time to build, maintain and take a break to focus on other things.
Why you want weaknesses
In business, we all like to think that our company is doing the best it possibly can with the resources it has, but this is often not the case. Inevitably, you will drop the ball somewhere along the line because well, running a business isn’t exactly a walk in the park, is it? The good news is that having weaknesses is beneficial. Why? They instantly provide you with a way to improve, because they can and should be turned into future strengths. Just keep in mind not to point the finger when mapping your company’s weaknesses. It’s not about figuring out where your problems come from so you can assign blame. Your goal is to identify the opportunities lying beneath the surface of these weaknesses and propose solutions to harness them.
Opening new doors
We’ve all heard that when one door closes, a window opens. But have you ever noticed how climbing through a window is a lot harder than walking through a door? While you need to seek out new opportunities for growth, it’s worth keeping in mind that this can take considerable resources and investment, so you don’t want to be too boisterous in chasing every opportunity that pops into your head. Instead, be selective and realistic in identifying a few where you can funnel all your focus. Don’t spread yourself too thin pursuing opportunities that are unlikely to have much impact on your business in the long term, especially if it’s the kind you have to crawl through windows for.
Tying up loose ends and plugging holes
Threats in a SWOT analysis are the risks outside of the company’s control, such as an economic downturn or a change in consumer demand. Although there is little to nothing that a company can do to prevent these things from happening, contingency planning for the future could mean the difference between your business’s survival or eventual demise.
You should be conducting a thoughtful and thorough SWOT analysis once a year and then reviewing it as frequently as every few weeks for adjustment and improvement. After all, it’s a fluid document that needs to change and develop as your business does. Be careful of tunnel vision though; you shouldn’t be basing your analysis solely on criteria that apply only to your business. If you are too industry-, geography- or product-specific, you might miss strengths, weaknesses, opportunities and threats that are floating around in the broader business stratosphere.
Think of businesses like Nokia, who started out selling paper, and Lamborghini who had their beginnings in tractors. Where would any of these companies be today if they didn’t look beyond the horizon of here and now? Will you follow in their footsteps and forge a brighter future for your business? Take a look at your SWOT analysis and find out!