Understanding the Totality of Your Business
Understanding the totality of your business could be a lot easier than you may think. There is a tool that has been utilized by top level corporations worldwide to break down their business into four actionable pieces. This tool is called the SWOT Analysis. Although it is not a new concept, the SWOT Analysis is a quick and straight forward way to understand your business on a deeper level. The SWOT Analysis is proven to be effective, unlike some other methods that may take up too much of your valuable time.
The acronym SWOT stands for Strengths, Weaknesses, Opportunities and Threats. One of the easiest ways to visualize a SWOT Analysis is to draw a square separated into four quadrants. In these quadrants, beginning at the top right-hand corner you’ll want to write “S” for Strengths, then continue clockwise with “W” for Weaknesses, “O” for Opportunities, and finally “T” for Threats in the bottom right-hand corner.
Breaking Down the Acronym SWOT
Beginning with strengths, you’ll need to refer back to the three principals that we have talked about in the past: your product, infrastructure, and the conversation. Is there a piece of your business that you feel better about than the others? The key is to always maintain a broad Exit Mindset so that your team is able to see the larger picture. If you’re having a hard time filling the Strengths, Weaknesses, Opportunities, and Threats boxes, remember to keep it simple. If you’re only able to come up with a couple of bullet points for each box, that is fine as long as they are honest assessments.
The most difficult piece of SWOT for most business owners is defining a weakness. It’s important to remember that having a weakness does not mean that your overall business is weak. The ability to recognize a crack in your infrastructure or a product that could be improved upon, only reveals new opportunity. Opportunities are where your business could grow, market share that could be taken advantage of, or even pricing structure that could be adjusted.
The last part of the acronym in SWOT stands for threats. Much like weaknesses, business owners sometimes struggle to identify their own threats, even if the threat is right in front of their nose. Is there a patenting process that could prevent your product from coming to market? What about a new wave of businesses in your neighborhood that are cutting into your sales? Once again, it’s important to think broad and be honest with yourself and with your business as a whole.
Including the Team
One of the easiest mistakes to make when performing a SWOT Analysis is trying to take on the challenge alone. Including your team and other key decision makers can help to garner a wider view with different perspectives. There may be a few specific weaknesses or even strengths that you are unaware of, that may be affecting larger pieces of the puzzle. We would always suggest that you begin by creating a rough SWOT Analysis on your own, using the Exit Mindset and higher-level thinking. Once you have a rough outline put together, you can then crowdsource solutions or additions to the list using your employees or other executives. By effectively adapting your vision to work well with your employees’ strengths, you’ll notice that pieces will begin to fall into place. Remember, as a business owner you are in this endeavor alongside your employees.
Creating a SWOT Analysis should not be overwhelming! If you are struggling to make SWOT Analysis’ a regular piece of your weekly routine, try to simplify your process and focus on one or two bullet points per letter of the acronym. It is perfectly okay to focus on strengths one week and weaknesses the next, as long as you are able to come full circle and look at the entire diagram from above. A SWOT Analysis is a great way to establish a 360-degree view of your company but relies on your ability to think honestly and trust your team!
For more information about business strategy and tactics like the SWOT Analysis, visit the website Exitmindset.com.