S'wot's SWOT?

The beginning of the year is an idea time to review progress with your business and take a rain-check on whether your plans are still taking you towards your business goals. As we all know, the business environment is constantly changing, but it can be hard to find time to consider what the impact might be. A SWOT is a well tested method that does not take too much time, but still produces the information needed to make good business decisions.

SWOT stands for Strengths Weaknesses Opportunities and Threats and is a process that enables you to consider outside forces that may be influencing your market and the internal resources that will help or hinder the actions you choose to take, in a structured way.

Step 1: Look at Changes in your External Business Environment

You start by looking at the key forces in the business environment:

• Political (e.g. Changes in National and Local Government, their policies etc.)
• Economic (e.g. Recession, new sources of money, banking crisis, new competitors etc.)
• Sociological (e.g. Ageing society, immigration etc.)
• Technological (e.g. Increasing interest in sales online, social networking, new technical products etc.)
• Legal (e.g. New legislation - Health & Safety, Environmental, Planning etc.)
• Environmental (e.g. Global warming, flooding, green grants etc.)

It's a good idea to look wider than those forces you might obviously think will affect your business; it's surprising how often this throws up an unexpected opportunity. As well as looking at trends, also look for anomolies. Anomolies often tell you where the big changes may be coming and may indicate when a niche market is opening or closing.

Step 2: Assess the Impact (Opportunities and Threats)

Take each Change and consider whether this presents an Opportunity for more/new business, or whether it presents a Threat to your existing business. Involve your team if you can.

Step 3: Consider your Strengths and Weaknesses

Take each Opportunity and each Threat and consider what resources etc. your business has or needs to acquire to counter the Threats and exploit the Opportunities. These could include:

• Customers,
• Suppliers,
• Competitors,
• Other Stakeholders (anyone else who is affected by changes in your business)
• Skills,
• Experience,
• Technology,
• Finance,
• Spare capacity (is all your time and other resources in use?)
• etc.

Step 4: Take Action!

From this, you will need to decide whether and what you need to change in your business going forward. Taking action is crucial! Think: Why, How, Where, Who, What and When.

Other Areas SWOT can be used for:

• Assessing a new idea
• Changing a Supplier
• Taking on a major new Customer
• Investment decision
• Starting a new business
• Entering a new Market
• Introducing a new product
• Changing your brand
• Assessing the impact of a Competitor
• A new business proposition
• Changing your sales distribution
• Any major business decision!

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