Life is so much easier to tackle when you know your strengths and weaknesses, the opportunities that lie ahead of you, and potential threats that could make life a tad difficult. It helps one chalk out a plan that may not work to the T, but there is a lot of clarity and a mental map to proceed with.
Similarly, in the case of businesses, a SWOT analysis is of utmost importance. It is a very simple framework that involves mapping out your enterprise’s strengths, weaknesses, opportunities, and threats. Before making strategic decisions or even during the start of your journey as an entrepreneur, drawing out a SWOT analysis can help you foresee growth opportunities and avoid many pitfalls due to possible threats.
Haven’t you ever used a SWOT analysis? Let’s look at how easily one can use this approach for a healthy and successful business.
Firstly, do keep in mind that your SWOT analysis will give the best results its drawn-out after taking multiple opinions from people within the organization.
The next step to take is to start working backward. Identify your goals as a business as well as internally as an organization. Ask yourselves, where do you see yourself in the next 5-10 years? From this point onwards, start working your way back.
Create a SWOT matrix and start with your strengths internally as a team and in terms of business processes, sales, cash flow, etc.
Next, move on to weaknesses within your organization that might be slowing you down as a business and other factors, for example, competitor business having an advantage over you for producing better quality products.
Then sit down and chalk out all possible opportunities your business hasn’t tapped into yet or social and economic trends that could change to bring about brand new prospects for you to exploit in the future.
And in the end comes in, the threats! These are mostly external factors that could hamper the growth of the business.
While filling up the above four questions, keep asking questions at each section. E.g., what do we do better than our competitors? What advantage do our competitors have over us? What are the current market trends that we could capitalize on? What trends could change that could make our products obsolete?
Once the entire matrix is filled out, you can now understand what you are doing well, what needs to change, what gaps need to be filled, and what needs to be avoided to run the business successfully. This exercise will help you create a clear and concise plan that you and your team can refer to in the future.
However, make sure once you plan out a new strategy after the analysis, as a team, you all keep going back to it for reference to check if everything does match up. Otherwise, the entire exercise will be futile.
To know about your strength and weaknesses in detail, take the Wealth Dynamics personality test, the world’s leading profiling tool for entrepreneurs.