Many entrepreneurs face the challenge of time. There just aren’t enough hours in the day. Entrepreneurs spend considerable time solving problems and creating solutions. The downside is that often they feel pulled in many directions simultaneously. At this point it’s important to stop and consider all options carefully. Many recognize the benefits of a SWOT analysis for their companies. Understanding a business’ Strengths, Weaknesses, Opportunities and Threats gives leaders a new perspective on what the organisation does well, where its challenges lie and which solutions to pursue.
How to SWOT
There are four basic steps to using a SWOT and each just requires you to use your own and your teams current knowledge and expertise. Start off by drawing a quadrant. Each section is dedicated to one of the four elements of this analysis. The purpose of the SWOT is to identify those areas within each quadrant that require more in-depth knowledge of before decision time.
First step is to identify those internal factors that you have control of, what are your strengths and weaknesses. Next look to identify external factors, those outside of your control, namely opportunities and threats. Now you can match opportunities to your strengths and where possible convert any threats or weaknesses into strengths or opportunities.
When reviewing your internal factors you focus in the expertise and qualities of your company that are unique. This includes its culture and resources. Other items that you should place in the ‘Strengths’ quadrant of your SWOT are the skills or knowledge you have that generates value and an advantage over others. To complete the analysis of internal factors you have to look at what aspects within your organization remove or dilute your competitiveness. These items make up your ‘Weaknesses’ quadrant.
Next it’s time to identify your external factors. This involves assessing the current state of your market place, the economies you operate in and the influence of third parties. It’s important to assess the impact of potential or anticipated technological, market, global and regulatory changes on your operation. The positive or negative nature of such changes will dictate whether they are classified as ‘Opportunities’ or ‘Threats’, respectively.
The benefit of a SWOT analysis is the opportunity to think outside of what is normally expected within your company, even if only in a simplistic way. It should only be used as an initial guide for defining a strategy or short-term goals. For example, if your company struggles to keep up with HMRC regulation, Sage One offers an integrated solution that will help not only keep you updated but also remind you of any important dates.
The key to achieve success in using the SWOT analysis is in understanding its purpose. It is not intended to provide answers just to highlight key items and issues that need further investigation before answers can be found.