6 tips to help you understand, evaluate and take advantage of your SWOT analysis when applying it to the growth plan of your business.
Are you working with a CPA firm that looks at more than just the numbers?
The use of SWOT Analysis allows you to identify the strengths of your business, minimize its weaknesses, take advantage of opportunities and overcome threats. It helps you improve your business success by addressing three key issues, as seen through the eyes of customers: your strengths, your value, and your difference.
Having an advantage over your competitor is irrelevant unless it is an important factor in your customers’ decision-making process. As a business owner, how do you locate these strengths? And what can you do to maximize them?
If you have a lot of competitors, and they offer equally attractive products and services, then you are unlikely to have a great impact on your customers. However, if you offer a truly unique service, then you have a big advantage as long as the customer has a need that your service can address.
A SWOT analysis gives you a valuable framework for reviewing the position and direction of your business by helping to refine your business goals, your objectives, and your strategies.
Strengths and weaknesses are internal factors, over which you have some control, whereas opportunities and threats are commonly driven by external market factors. Once you have finished a SWOT analysis, look carefully at the results to help decide your next step for business growth.
1. Use SWOT to bring your team together
A simple and fun SWOT analysis session can unify your team and motivate them to address a few key factors that could help your business growth. Consider involving a few trusted advisors (e.g. your accountants) in this session to gain fresh outside perspectives about your business.
2. Narrow your focus to create opportunities from your strengths
How can you turn your Strengths into new Opportunities? What’s the best way to introduce your new product or service to your specific customer base? How can you focus on a few key actions, rather than spread yourself too thin?
3. Don’t ignore your weaknesses
Think about what it truly takes to turn a Weakness into a Strength, or a Threat into an Opportunity. Can you test a new product or service with customers so that any Weaknesses are addressed before it’s launched? Are you properly informed and organized to deal with these issues?
4. Identify obstacles to your growth
If there are any Threats that might impact your future growth, how can you avoid them? For any remaining Weaknesses, how can you fix or even postpone launching this line of business until you have effective plans to minimize them?
5. Compete on your own terms
A powerful method to discover your competitive advantage is by comparing your SWOT with that of your main competitor – side by side. Every competitor has weaknesses. Rather than defend yourself against your weaknesses, it can be useful to highlight how your strengths bring benefits to the customer in areas in which your competitor has weakness. It’s equally important that you do not take on your competition in a customer segment where you are weak and they are particularly strong.
6. Remember to prioritize
Avoid the most common pitfall when applying SWOT analysis as an effective tool for growing your business – a failure to prioritize your list of necessary steps so that the most important ones are not forgotten. Instead, focus only on the top 3-5 items from each quadrant in your SWOT analysis. Knowing what you want out of your business is key to this process. You should only focus on those things that will ‘turn the tide.’
If done right, a SWOT analysis will help you develop a plan which separates you from your competitors. It also helps you compete successfully in your chosen market – on your own terms. It allows you to focus on your key strengths so that you can take the greatest possible advantage of opportunities available to you. At the end of the day, isn’t that how you want to run your business?