SWOT Analysis, and What It Means For Your Business
Strengths, weaknesses, opportunities, and threats are aspects of business that must be analyzed and assessed for every business. SWOT analysis is a widespread practice used by businesses at every level; being aware of the position of your business is crucial to long-term success. Every business should conduct the analysis and understand that all will have a different outcome. Location, experience, and resources are a few items that can affect the analysis of individual businesses. Taking the time to conduct SWOT analysis can prove to be an invaluable tool that gives business owners a clear understanding of their position in given markets. The information gained through this analysis will give owners or managers insight to guide the decisions they make.
Strengths:
What does your business do well? What sets your business apart from your competition? Do you have a signature product or service? When you give your elevator pitch what things do you mention? The way that these questions are answered leads you to understand the strengths of your business. When you know your strengths you can begin to market them and grow from them. Improving your strengths can only help, which is why it is important to learn what these things are. Understanding of your strengths, will guide you into learning your weaknesses.
Weaknesses:
Are there areas that can be improved in your business? Do you struggle with particular services or products you offer? Are there any aspects of running your business you are uncertain about? There is no shame in admitting that you do not understand or shine at certain things, it is what you do about it that makes the difference. Many people take classes, attend seminars, or read books on subjects they need help in; other people hire someone to handle those aspects of their business. Acknowledging weaknesses give businesses the ability to address the issue and find ways to overcome them.
Opportunity:
What opportunities are available for you or your business? Are there companies you can partner with? Are there other products or services you can offer that compliment your products or services? Would certain systems and or technology help streamline aspects of your business? Understanding that opportunity can mean a lot of things in regards to your business, is the first step to beginning this analysis. Opportunity can be seen as ways you can improve, places you can expand into and, knowledge that can be used in your business. When you are presented with a situation or person ask yourself if this can be seen as an opportunity for your business.
Threats:
Who are your competitors? What prices do your competitors charge? What does your competitor do well and what areas can they improve on? When you do business it is vital that you are aware of your competition. Knowing key things about them will provide you with much needed insight as to ways the market can be improved or ways that it is saturated. Businesses should aim to do things that work well, and find ways to improve on their weaknesses. Often new business owners will begin with tunnel vision thinking that what the competition is doing is not relevant to what they are doing but that could not be further from the truth. An example of this is a new car detailer that is entering the market. If he charges $65 for a service that all of his competitors are charging $30 for his pricing may not entice customers away from competitors. On the same not if he charged $12, customers may wonder why he is so low compared to all the other detailers in the city and be leery of using him.
SWOT analysis as been around for quite sometime. As business owners we must constantly be aware of the market that we are apart of and, markets we aspire to be apart of. Going into business blindly can only cause problems further down the line, taking a moment to conduct a SWOT analysis can only benefit a business while providing added insight. Understanding your total business is necessary, it gives you the ability to properly run all aspects of your business. Such as marketing, operations, and pricing. Allow the knowledge gained from SWOT analysis to set yourself apart from your competition, grow from your strengths and improve on weaknesses.
