Conducting a SWOT Analysis is critical to the long term success of your small business. The SWOT analysis process enables your team to identify the strengths, weaknesses, opportunities, and threats (of the entire company). These are all contributing factors in the growth and sustainability of the business. Understanding company strengths enables you to identify what you have and what works and understanding company weaknesses enables you to identify what you don’t have and what doesn’t work. Furthermore, knowing about the different opportunities for growth in your business industry gives you the chance to capitalize on them to realize your revenue goals. In addition, knowing and understanding about the different challenges the team will face that threaten the growth or sustainability of the business gives your team the opportunity to develop a strategic plan to combat any potential issues. The SWOT Analysis is a pro-active approach to building a high-performance business.
The SWOT Analysis Process – Getting Started
Before starting the SWOT Analysis process I suggest meeting with your team to discuss what will be done during the process. It doesn’t have to be a difficult process. The simplest way to implement a SWOT analysis process is to have each team member write down all strengths, weaknesses, opportunities, and threats they discover (while on the job) over the course of the next 30 days. The team should schedule weekly meetings to discuss what was discovered. The weekly meetings should also be used to find solutions to any industry threats and opportunities discovered during the process.
How to Identify Your Company Strengths
You can identify your company strengths in one simple and quick way. All you need to do to identify company strengths is to write down a list of positive factors that you know contributes to the overall sustainability and profitability of the business. You can also write down positive factors that you notice throughout the day while working (onsite and offsite). Both internal and external factors can be company strengths. A few examples should give you a good idea of what strengths to think about and look for during the SWOT Analysis discovery process. Some examples include:
- External Factor – Having the proper licensing to operate in the industry.
- External Factor – Access to a $150,000 revolving line of credit that enables you to cover the cost of payroll while you are waiting on clients to pay invoices.
- Internal Factor – Securing a long term contract with a large cable company that increases the gross revenue of the business.
- External Factor – Obtaining equipment financing to lease a fleet of tractor-trailers that will enable the company to take on more contracts, which will help increase company revenue.
- Internal Factor – The hiring of 10 new team members that will enable the company to take on more contracts, which will in turn increase company revenue.
How to Identify Your Company Weaknesses
Company weaknesses can be defined as anything the company can improve on to increase the efficiency, effectiveness and bottom line of the business. A simple way to identify company weaknesses is to think about what resources and skills the organization lacks. Company weaknesses are mostly internal factors so focus on internal issues to discover company weakness. A few examples of company weaknesses include the following:
- The company is currently seeking a $350,000 revolving accounts receivables line of credit to cover the cost of payroll while waiting for client invoices to be paid. Until we receive the line of credit, we will be unable to hire the 5 highly skilled employees we need to bid on the federal contract.
- We need at least 5 more tractor-trailers before we can accept a larger number of truck load jobs from companies like Kroger, Wal-Mart and Albertson’s. Not having the necessary equipment needed to accept new clients or work opportunities can slow down the overall growth of the business. It limits the company’s ability to capture market share.
How to Identify Industry Opportunities
Industry opportunities are external factors that can be capitalized upon by the company to increase its bottom line. The best way to identify industries opportunities is by conducting research. Research should be obtain from reliable industry sources. I suggest using research industry databases like First Research to find out about current industry opportunities. First Research updates it industry reports quarterly so if there are any new opportunities in your business industry, you’ll know about them as soon as they begin to affect the industry. Here’s an example of industry opportunities from a First Research industry report:
“Adding “Green” Menu Options – Companies can leverage growing consumer interest in the environment and healthy eating by adding “green” menu choices. Nearly half of consumers consider a restaurant’s conservation efforts important, while the same percentage of FSRs aimed to boost their green initiatives in 2010, according to the National Restaurant Association (NRA). By using organic ingredients, sustainable seafood, and antibiotic and hormone-free meats, restaurants can appeal to environmentally conscious customers. Many consumers are willing to pay a premium for environmentally conscious food.” Source: First Research, Restaurants Industry Profile, Quarterly Update – 1/24/2011.
How to Identify Industry Threats
Industry threats are also external factors that affect your business. Threats can be defined as anything that affects the growth and sustainability of the business. To keep up with industry threats, I suggest subscribing to an industry newsletter or magazine like QSR (a restaurant industry magazine). Industry newsletters and magazines will keep you abreast of any industry trends or changes that can threaten the success of your business. First Research also discusses industry threats in its industry profiles. This industry database should also be used to stay on top of industry threats.
Did You Discover that Lack of Capital is a Weakness in Your Business? LenCred Can Help.
If you discovered that lack of capital is a weakness during your SWOT Analysis process, LenCred may be able to help you fix that issue. The LenCred team specializes in helping start up and established small businesses obtain up to $250,000 or more in capital. If lack of capital is your problem, then LenCred is the solution. Contact the team today for more information.