SWOT Analysis – Your First and Most Important
Strategic Business Tool
One common reason small business owners contact me is about not having enough clients or cashflow, despite doing everything they read about in digital marketing posts and workshops.
I ask them a simple question: “Have you done a SWOT Analysis for your business?”
More often than not the answer is “No”. Occasionally the answer is: “What’s a SWOT Analysis!!”
After more than 30 years in sales, marketing and managing my own teams and businesses, I can soundly advise that a SWOT Analysis is THE most crucial first step a business owner can make to maximise the chances of success….even before they put their website together!!
How do you know what to focus on in your website if you haven’t clearly identified what your core messages should be? And who is the target? The SWOT Analysis is the hub of all your strategies.
SWOT Analysis – Why it’s such a crucial process.
The Strength-Weakness-Opportunity- Threat (SWOT) analysis sets out the strengths you and your business has that will be used to capitalise on the opportunities offered by your market. What strengths do you have can you build on? It also identifies the weaknesses that need to be strengthened so that the threats you identify in the market don’t impact your business.
In effect it’s a simple matching process: match your strengths to the opportunities available, and un-match or set up strategies to disassociate your weaknesses from the threats.
The SWOT is the foundation of all your promotional strategies. Their effectiveness is entirely dependent on the effort and rigor you put into the SWOT analysis.
The SWOT will:
- Identify the strengths that will feature in your mission statement , your website and other social and digital platforms;
- Clarify the opportunities reflected in your vision;
- Point towards your USP – unique selling proposition – and what elevates your position in a busy and congested market;
- Helps establish all the objectives your strategies need to address; and
- Formulate your critical success factors that must be achieved for your business success.
How to perform a SWOT correctly
Download my guide here .
The key aspect to remember when completing your SWOT is that strengths and weaknesses are INTERNAL factors to you and your business, while opportunities and threats are EXTERNAL factors to you and your business e.g. your competitors, environment, politics, economy, technology etc.
So first your strengths:
- What do you do better than your average competitors?
- What unique or low-cost resources or technologies do you have?
- What do your clients see as your strengths?
- What will mean you get the sale?
- What sets you apart from your competitors?
Note though, that a strength is only a true strength if it’s a feature that you possess as an advantage over the majority of your competitors.
Now your weaknesses:
- What can be improved? What technologies are you not currently using?
- In what areas do your competitors have the edge over you?
- What necessary expertise/manpower do you currently lack?
- What causes you to lose sales? Where do customer complaints come from?
- What would your customers say are your weaknesses?
Now look outside you and your business to the market you exist in. First look at the opportunities on offer:
- What new trends do you see in the industry?
- What external political, environmental, social and technological changes present interesting opportunities?
- What have you seen in the news recently that might present an opportunity?
- What obstacles do you face?
- What is the competition doing that you’re not?
- What external political, environmental, social and technological changes present in the market could adversely affect your business?
Top Tips to an Effective SWOT
To get the most out of your SWOT analysis follow the following key tips:
- Be objective: ask yourself tough questions and challenge your thinking. Biased effort will just get a biased result.
- Be thorough: go beyond what you have at hand. Look to other available publications and sources for information that will add depth to your analysis.
- Get some fresh eyes: ask some trusted colleagues or a mentor to help you “see” what you may not see.
- Ask your customers and suppliers: these often have some great insights into you, your business and your market.
What to Do With the SWOT Analysis?
Now the fun begins. You use the SWOT to generate strategies and actions to address all the elements that the SWOT uncovered. You start to craft strategies that help distinguish you from your competitors, and to compete successfully in your market and grow your business.
Your strengths become clues to what should appear in your mission and vision statements. They form the hub of your promotional strategies.
More than that, the SWOT can help identify growth opportunities – new products to develop, modified manufacturing processes to implement, expansion possibilities.
A SWOT can highlight risk and help you take steps to manage or eliminate that risk.
In the end, the SWOT becomes the foundation of your business focus with clearly laid out strategies for each crucial element on that path to success.
For more information or guidance on developing a comprehensive SWOT and associated strategies, don’t hesitate to contact me and I will be happy to help you as I have dozens of other business owners: firstname.lastname@example.org or 0409 556 650.