Do you know your business’ strengths and weaknesses?

From time to time, companies and organisations undertake a SWOT analysis, where managers and staff look at what Strengths & Weaknesses the business has, and what Opportunities & Threats the business is facing in the current business environment.

I highly recommend this process to trade business owners to identify their business’ internal strengths and weaknesses, as well as its external opportunities and threats.

So let’s have a look at what it means a bit more closely.

Strengths

This is all about what your business is doing better than others and what factors translate into your competitive advantage, ie why is it that YOU get the sale and not your competitor. Your strengths may include things like access to your target market, your systems and processes, your staff and culture, etc. Look at your strengths from both an internal perspective, and from the point of view of your customers and people in your market.

Weaknesses

Take a good look at what you could do better and what you should avoid doing. Think about why you might not have made the sale that you really thought would be a done deal… and be honest with yourself during this reflection. It’s definitely worth asking questions outside of your business environment, too, and even asking your customers.

Talk to people in your own industry and see if you can find out what price they are charging for the same service or job.

Opportunities

To spot new opportunities you need to stay in touch with what’s going on in your industry. Are there new market players or new technologies that could open up new opportunities?

Are there any events or conferences that are relevant for your business, that you could attend to increase your network? Could changes in government policy, or changes in social patterns, population profiles, lifestyle, and so on result in opening up new opportunities?

You can also examine whether your Strengths can open up new opportunities, and conversely, whether you can do so by eliminating your Weaknesses.

The Queensland Government, through its Business and Industry Portal, provides a wide range of resources you can tap into to do your market research or find new opportunities.

Another way of finding out about new opportunities is by jumping online and finding information about businesses similar to yours in another country, then talk to them and build a relationship. I have found that, when you’re not directly in competition with each other, people are quite happy to talk about business issues that you’re both facing.

Another way of finding out about new opportunities is by jumping online and finding information about businesses similar to yours in another country, then talk to them and build a relationship. I have found that, when you’re not directly in competition with each other, people are quite happy to talk about business issues that you’re both facing.

Threats

If you haven’t joined already, sign up and become a member of industry associations relevant to your company and read their publications. Like with opportunities, you’ll need to know what’s going on in your industry to understand the threats and obstacles your business is facing.

Ask yourself what’s stopping your business from growing your market share. Find out what your competitors are doing, including their pricing.

If you have debts or cash flow problems, make sure you address these, as this could seriously threaten the survival of your business in a tight market.

Finally, ask yourself, if any of your identified weaknesses could develop into a serious threat to your business.

You can use the SWOT analysis as a serious tool or a casual “warm up” for strategy formulation. If you want to do it rigorously, you’ll need to make sure that you:

• Only accept precise, verifiable statements.
• Ruthlessly prune long lists of factors, and prioritize them so that you spend your time thinking about the most significant factors.
• Ensure that the options you develop are included at a later stage of your strategy formation process.
• Apply it at the right level – for example, you might need to apply the tool at a product or product-line level, rather than at the much vaguer whole company level.
• Use it in conjunction with other strategy tools, eg Unique Selling Position (USP) Analysis, so that you get a comprehensive picture of the situation you’re dealing with.

If you have any questions on the best way to conduct a SWOT analysis for your business, feel free to arrange a FREE No-Obligation Meeting with me.

Copyright © 2016 Robert Bauman.