Firstly, decide who to involve in the analysis and make sure you involve different departments within your company, with staff at different levels, in order to get a rounded opinion. Ideally, you will involve different sorts of stakeholders – customers as well as staff, for example. Then you can brainstorm ideas. When asking staff to identify SWOTS, keep them anonymous in order to encourage absolute honesty. And once you have your SWOT analysis, remember that it is an ever-evolving process and what’s a strength today may be a weakness tomorrow. To make your SWOT analysis effective, revisit it regularly. When listing your strengths, always consider the phrase “which means that…” and write down the answers. For example, a strength may be "sound finance", which means that you have access to a variety of sources of credit. Strengths These are usually fairly easy to identify through talking to your customers and suppliers and looking at sales records. For most businesses, there will be four categories that strengths fall into: sound finances, marketing, skills and systems of your management and personnel and also production, e.g. premises or sources of materials. Be aware, though, that highlighting strengths is often also a way of identifying weaknesses and threats – you could be a business leader but bureaucratic, or your strength may lie with a key person who could resign. Weaknesses Many businesses know the areas where they are weak but tend to ignore them, so this analysis is a good way of dealing with any underperformance issues. The areas of potential strength that have been highlighted can also be areas of weakness, so flaws could be poor financial management, lack of marketing focus, employee weaknesses or inefficient production, premises and plant. Opportunities Think about what is happening outside your own business that gives your business opportunities. Examples could include a change in an organisation or individual that directly affects your business; perhaps the insolvency of a competitor or an opportunity to recruit a key employee from them. It could also be a change in the general business environment, for example a shift in legislation or a new available technology. Threats Potential dangers to your business are important to identify – they could be minor but they could also have devastating effects. Just as areas of strength and weakness are interchangeable, so are areas of opportunity and threat. A change involving an organisation or individual can be good, but also bad, news – a new competitor could emerge or you could lose a significant customer. A development in the wider business environment could also be detrimental. Once you have identified all these areas, think about how you can use this knowledge. Capitalise on opportunities that play to your strengths, address any areas of weakness and consider how you can protect your business against the possible threats and put together action plans to address the issues. Finally, make sure you can justify your conclusions, through business records, data on competitors, market research or specialist consultants. You can then make sure your analysis is based on realistic information and can be used to maximum effect. Helen Reynolds is managing director of HB RIDA, a joint initiative between James Caan’s Hamilton Bradshaw Private Equity and The Recruitment Industry Development Agency. A business coach and entrepreneur she provides support to fledging and established businesses through a unique set of development programmes assisting recruitment business owners to grow and develop their own firms.Related articlesHow to write a business plan DIY SWOT analysisTips to secure investment for business growth Picture source
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