Did you know that a SWOT analysis is really a gift? This is not a practice typically embraced by the average small business owner.In fact, there are many business owners who dread this exercise and avoid it. Smart entrepreneurs do not consider this business analysis as a measure of how badly you are doing.Instead, they consider it a gift.
A SWOT analysis looks at the Strengths, Weaknesses, Opportunities, and Threats of a business. This can be challenging as it requires a look at one's financial statements and inventory. For service providers, it includes the stability of their client base.Beyond the usual way of evaluating the business, add a variation to this exercise. As a small business owner, include yourself by examining recent skills learned, personal events or crises, and anything that is supporting your business' success. For example, joining a networking group or mastermind group may reduce your feelings of isolation and panic. This allows you to keep your creative juices flowing so you produce great products and/or services which make you money.
As you go through the SWOT analysis, write it on paper and/or create a file so there is a record of the company's strategic planning and growth. Many of my clients tell me that they do it in their heads.One catch to this is that you can fool yourself into thinking things are not so great or not so bad. A written version creates the distance to see more accurately how the business is performing. Use measurements that are verifiable such as the profit and loss statement, number of clients, inventory, and any other resources that illustrate each of the four areas.
Here is the process:
1. Strengths. What is going well? Identify what supports meeting the business goals. Include any recent skills you have developed that are producing an ROI (Return on Investment) as well as the products or services that produce revenue. Give yourself a pat on the back for what you do better than anyone else.
2. Weaknesses. What is not going well? This can be a difficult section for many business owners. Keep an open, curious mind about what is keeping the business from flying high. Some of the reasons may include difficulty delegating tasks or a poor marketing strategy.An underrated area that can deeply affect a business is the entrepreneur's personal issues. Divorces, medical issues, and other personal crises can interfere with how you run your business. As long as your energy is focused on coping with your crisis, it is difficult to maintain a high level of engagement in your business.
3. Opportunities. It is too easy to think that the economy or other circumstances are eating up your opportunities. Look for low-lying fruit.Are you and your sales staff calling all of your prospects?Have you asked your past clients for referrals or repeat business? Is there something that is staring you in the face that you are avoiding? Basically, use what is currently present to grow your business. Examine trends, changes in laws, technology, and anything else that could produce revenue and profit.
4. Threats. What could hinder or hurt the business right now? These obstacles can include environmental circumstances, skills that you have not mastered, or your competitors. For one client, it was as simple as removing the word, "should" from her vocabulary.Another client is faced with explaining how his company's investment strategies are affected by the recent economic crisis so his clients keep their faith in him.
The gift of a SWOT analysis is a clear picture of your business. You know how it is growing, your obstacles, and your opportunities. This process challenges you to objectively look at your business and your role as the leader of your organization.It takes strength to tell yourself the truth and the will to avoid complacency.Now you can make smart decisions and take action no matter if it includes re-working your business plan or adding a new product or service.
Article Source: http://business-small-business-gw.blogspot.com/2008/10/gift-of-swot-analysis.html
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