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SWOT Your Business

How do you go about evaluating your business on a regular basis? Second, do you really try to look at it from the outside, objectively, and try to improve?

The reality is that most Small Business Entrepreneurs (SBEs) don’t evaluate their business on a regular basis and if they do they find all the things they are doing right and pat themselves on the back then move on. Not very smart is it? I mean, it may be motivating and it allows you to check that box that you actually did it, but it ends up not even being worth your time.

Is that why most of us don’t do it, because we feel it is a waste? Probably, but the reason we feel that way is that we have no system. I want to share a system with you today that has been around since the 1960s and was first created by Albert Humphrey who led conventions during the 60s and 70s at Stanford University, for Fortune 500 companies. This is a very simple system that you can use in a one day strategic planning session or a five day retreat.

WARNING: DO NOT START THIS PROCESS UNTIL YOU HAVE A CLEAR VISION OF WHAT YOU WANT YOUR BUSINESS TO LOOK LIKE IN THE NEXT 1 TO 3 YEARS.

You need to have this vision in order to answer the questions in a truly meaningful way. You need to be focused on your desired result.

The SWOT Process

SWOT is an acronym for: Strengths, Weaknesses, Opportunities and Threats. It is an inside out analysis of your business. By analyzing these four strategic areas of your business you can design, decide and implement effective plans immediately.

STRENGTHS: What are the current strengths of your organization? You need to ask questions such as:

• What advantages does your organization have?
• What are your core competencies?
• What, as a fact, do you do better than anyone else?
• What unique or lowest-cost resources can you draw upon that others can’t?
• What do people in your market see as your strengths?
• What factors mean that you “get the sale”?
• What is your organization’s Unique Selling Proposition?
• What is the strength of your product line or services offered?
• What are the strengths of your people?

WEAKNESSES: What are your greatest Areas For Improvement (AFIs)? The questions you need to ask:

• What could you improve?
• What should you not focus on?
• What are people in your market likely to see as weaknesses?
• What factors lose you sales?
• What do your customers feel are your greatest AFIs?
• If money and time were not an issue, what would be the one area of your business you would improve on?

OPPORTUNITIES: What can you take advantage of right now to bring you to your next level? The questions you should be asking:

• What current opportunities are there in the marketplace?
• What interesting trends are you aware of?
• What are the changes in technology that affect your business?
• Are there changes in government policy that affect your industry?
• How can the current economic climate benefit your business?
• What changes in social patterns, population profiles and consumer lifestyles provide new opportunities for your product or service?
• What has happened locally that may allow for new opportunities?

THREATS: What do you need to be concerned about now or in the future? The questions that are most important to this area of analysis are:

• What obstacles do you face?
• What are your competitors doing?
• Are quality standards or specifications for your job, products or services changing?
• Is changing technology threatening your position?
• What cash flow or debt issues do you have?
• Could any of your weaknesses seriously threaten your business?
• What are the “big boys” doing that may affect your business?
• Are there any new competitors?

If you have been able to answer these questions you now need to put the plan together on how to make it happen. This is the strategic planning part. You strategic planning can now be very successful because you have some great raw material to work with. If you don’t ask the right questions you won’t have good information to pull from. If you don’t have good fodder, then your planning will only be surface level. No depth. Depth is understanding and is what will make your business thrive over all the others.

As SBEs we have to be evaluating, analyzing, organizing, planning and most importantly, taking action. This 50 year old system can help you set your business on the right path to the success you want. Go forth and prosper.