Strategic planning provides your business with a roadmap that takes it from your starting point to achieving your vision. Your business vision should be about you, your business and what you want to achieve within a set time-frame.
Once you’ve crafted a vision that represents your goals, it’s time to start strategizing. A SWOT analysis helps you to formulate your strategy by looking at realities both inside your business and in your external business environment. Your SWOT analysis consists of:
- Strengths: What internal factors will help your business to succeed?
- Weaknesses: What possible obstacles to your success exist within your business?
- Opportunities: What opportunities does your business have within its external environment?
- Threats: What external factors could have an adverse impact on your business?
Record your answers to the following questions. If you are working with your team, it may be interesting to note the differences in your responses.
- What are your advantages in your market?
- Can you do something better than any other business in your field?
- Do you have a resource advantage that your competitors can’t match?
- What do your clients like about your business?
- Why do clients choose you over other businesses?
- What is your Unique Selling Proposition (USP)?
Remember to compare yourself to your competitors. If all of you have the same ‘strength’ then you’re looking at a necessary factor for success rather than a strength. You’re looking for factors that will make your business stand out from the crowd!
This portion of your SWOT analysis is often much more difficult than the first. You need to be absolutely honest with yourself about your business weaknesses at this point!
- What needs to be improved?
- Are there situations that you need to avoid?
- What do your clients say about your business if they were to criticize it?
- Why do your competitors sometimes pip you to the post?
If you’re working in a group, encourage your employees/business partners to be absolutely honest in answering those questions. You may find their responses enlightening.
You may need to do some preparation before you begin with this portion of your SWOT analysis. You don’t have any control over your external business environment, but it is here that your opportunities and threats lie.
- Are there recent technological and market changes that could present you with a great opportunity?
- Will changes in government policy create a new demand for your products or services?
- Are there lifestyle, population or social changes that could benefit your business?
- What events may be influencing potential clients in your favor?
When investigating opportunities, examine your strengths and weaknesses to see whether your strengths will enable you to take advantage of opportunities and which of your weaknesses need to be eliminated for you to take advantage of the opportunity.
Now it’s time to face the external factors that may jeopardize your business success:
- Will your competitors pose a threat to your business?
- Are there changes in your market that may necessitate adaptation?
- Do new technologies pose a threat to your business?
- Is your cash flow and access to finance sufficient to see you through?
- How do your weaknesses influence your chances of survival in your business environment?
Now It’s Time to Strategize
Your SWOT analysis should already have got you thinking strategically, but you still need to apply the information you’ve gathered. Here’s what you’ll do:
Check Out Your Strengths
- Can you build on your strengths and improve your competitive edge?
- How will you apply your strengths to build on opportunities?
- Will you need to build on your strengths in order to take advantage of market opportunities?
- Can your strengths help you to overcome threats? If not, what additional strengths should your business acquire?
Investigate Your Weaknesses
- How do your weaknesses impact on your chances of business success?
- Are there ways in which you can reduce or eliminate weaknesses?
- Do your weaknesses affect your ability to take advantage of opportunities? How can this be overcome?
- Do your weaknesses make it difficult to overcome threats to your business? What should you do to change that?
Analyze Your Opportunities
If you’ve seen a lot of opportunities for your business, you may not be able to strategize around every one of them. Identify which opportunities you intend to pursue and how you will do so.
- Which opportunities match your strengths?
- Will you need to improve on your weaknesses before taking advantage of your opportunities?
- What do you hope to achieve? Set SMART goals.
Track Your Progress and Be Flexible
You may find that you have to achieve several things in order to achieve a single strategic goal. Divide your journey into sub-goals. Which elements will you be able to achieve within the next quarter? What will you do next? List the steps that must be completed in order for your business to leverage business opportunities and set dates for the completion of every step.
Review your progress over a predetermined timeline. Will you check on progress monthly, or are quarterly reviews more appropriate to strategic follow-ups? At the end of the year, you should unpack your strategic plan in detail and review your SWOT analysis to determine whether you need to make any adjustments to your strategic planning.
For example, you may find that your business faces new threats or new opportunities. If a business is not responsive to changes in its internal and external environment, strategies soon become outdated.
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Your SWOT Analysis Is the Key to Success
Although SWOT analysis doesn’t necessarily uncover anything you don’t already know about your business, it’s a great tool for getting all the information into an actionable format. If you want to win at chess, you need a strategy and the same is true if you want to succeed in business. Your SWOT analysis will form the backbone of your strategic planning. It does take time, but it’s an exercise worth doing and repeating as you plan your path towards achieving your ultimate vision.
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