Article by Jane Tweedy, Business Advisor, Western Sydney Business Centre
Last week we looked at SMART goals, this week we look at another key part of the planning process, SWOT Analysis. SWOT stands for strengths, weaknesses, opportunities and threats.
I recommend creating a SWOT analysis on both yourself and your business, and then updating your SWOT quarterly. A weakness may have led to a training opportunity, which you’ve now implemented, and it’s become a strength! Why do a SWOT? Because they provide so many benefits and avoid disaster. Did you know a Kodak employee invented the digital camera, but Kodak only assessed it as a threat to their film business, rather an opportunity to lead the next big change in photography. We all know what happened next!
Strengths and weaknesses are typically more internal insights. Opportunities and threats are a combination, deriving from our strengths and weaknesses but are also externally generated (for instance, changing demographics).
Strengths: What are you or your business good at? What new skills and experiences have you added? Has a change in location or the shut-down of a competitor changed things (for instance you’re now the only local mechanic)?
Weaknesses: No one is perfect! What do we not do as well as we could? Is our location wrong? Do we have too many demands on our time? If these weaknesses are impacting our business we can treat as an opportunity to improve.
Opportunities: Look at your strengths and weaknesses first as they may lead to opportunities. The hire of a new person with new specialties may provide the opportunity to service a new market. Training may fill a weakness in other areas. Externally new infrastructure may make our business more accessible and desirable.
Threats: If we don’t address a weakness this could become a business threat. More often though it may be external, like competitors (new or old) undercutting you.
Communicate your strengths to your customers, set goals to address material weaknesses, capitalise on opportunities and mitigate key threats. If you need help with completing SWOT analysis for your business, please contact Western Sydney Business Centre.