I often hear small business owners say that they want to get more out of their business or feel like they are spinning their wheels and not making any headway. When I hear this, I like to ask why they think this is happening for them.  They typically make some guesses but their answers are usually the default answers that everyone gives – its the downturn in the economy, I can`t compete with the big guys, I can’t find good staff…

Although some of these factors may be true, it has been my experience that when we take the time to really assess what is going on in a business, we are able to uncover useful information that allows us to pivot and make better decisions. A SWOT analysis is a great tool to achieve this.

 

If you do not know the true state of your business, you cannot change it to generate different results

For those of you who do not know what a SWOT analysis is, it is when you assess your company’s strengths, weaknesses, opportunities and threats. The purpose of a SWOT is to give you a clear picture of what’s really going on in your business so that you can leverage the good aspects while avoiding the ‘not so good’ aspects of your business.

Since the majority of small business owner do not take the time to do a SWOT and find out what where they shine and what’s getting in their way, you automatically have the opportunity of gaining a competitive advantage just by doing one on your business.

 

If you are in fact a business person (and not just running a business) you will see the value in finding out what is working and what isn’t working so you can do the things necessary to get different results.

Just like most things, there are practices that can be implemented when performing a SWOT analysis to ensure that you get the most out of this process. The SWOT analysis is only as good as the information it uncovers so here are some tips to help you:

 

TIPS FOR A GOOD SWOT

Keep in mind that when you perform a SWOT you are essentially running a brainstorming session and the rules to good brainstorming apply. Most importantly of these rules is that you want to generate as many ideas as possible without assessing or judging them in the moment. This process is not meant to figure out how to fix things but is merely to generate the data you can use later in developing a plan of action.

 

Set aside a couple, uninterrupted hours

Creating the right environment is necessary to allow the generation of relevant and complete information. This starts with scheduling a block of uninterrupted time (I recommend 2-3 hours) to complete the task. All participants will need to commit to not taking calls, answering texts or emails and staying focused on the task at hand during the allotted time.

It is well documented that when we multitask, we actually fragment our energy and attention and this decreases the effectiveness of any one task we are engaged in. It takes time to really dive into and uncover the truth about any business so sticking to this guideline is crucial and will set the tone for the entire SWOT process.

 

Involve stakeholders of the business

The people you invite to the SWOT will greatly impact the quality of data you generate. Therefore, you want to select people who have a stake in your success, who understand your business, who have different perspectives and who are willing to be truthful. Depending on the size of your business you likely want to involve at least 3-6 other people in this process.  You never want to try to perform a SWOT on your own. It will only generate the same answers you have now.

I recommend that you invite stakeholders such as; any partners or owners, key employees, mentors or external people that you have good relations with, who have relevant business experience and can offer an unbiased opinion of your current state of business, the local market and your industry. The quality and variety within the group you chose to involve will determine the completeness and robustness of the information you generate. The better the information… the more useful the SWOT.

 

Generate as many ideas as possible

Often when people do take the time to do a SWOT they simply say, ‘what are our strengths?’ And they jot down typical responses such as ‘we have a good product’, our staff is loyal’.

These are good items to get the ball rolling, but if you really want to get value out of a SWOT, I would suggest digging a little deeper.  I would suggest that you ask more specific, probing questions and that you consider every aspect of your business – not just the obvious ones like price, product, competition and the local economy.

As you begin to fill in the SWOT quadrants (and as a way to encourage the information to keep flowing), you will want to consider all aspects of your business and what strengths, weaknesses, opportunities and threats exist for each.

 

Consider aspects of:

  • Finance – your budget, balance sheet, cash flow, financial literacy, state of bookkeeping and files etc.
  • Operations – your systems, procedures, suppliers, staff, management style, customer service etc.
  • Marketing – your brand, messaging, promotion, advertising etc.
  • HR and communications – your staff, management, communication, pay structures, incentives etc.

 

As you are exploring each of these areas, you should be asking questions like;

  • Do we currently do / have that?
  • Is it working?
  • Is it not working?
  • Does everyone know that we do it that way?

 

The answers to the questions above will provide data to be entered into one of the quadrants (S,W,O or T). For instance, if you determine you have low financial literacy, that gets entered into the weakness quadrant (the next article will address what do with it once you put it there). The more you generate from the brainstorm session, the more powerful a SWOT will be.

 

When we make decisions based on real and relevant data we have a much better chance of putting the right solution into place.
So, if you are a business person and feel that your current business is not doing what it could be, take the time to perform a SWOT and uncover the roadmap to move your company where you want it to be.