Why SWOT is Important for Your Business
Giving everyone who works in and with your remodeling business a clear sense of what the enterprise is about is one of the over-arching purposes of preparing a business plan. That is why the business' vision, mission and core values are so important. With this foundation in place it is easier to look forward, trying to see what the future holds for the company.
Giving everyone who works in and with your business a clear sense of what the enterprise is about is one of the over-arching purposes of preparing a business plan. That is why the business' vision, mission and core values are so important.
With this foundation in place it is easier to look forward, trying to see what the future holds for the company. A process for doing this is called a SWOT Analysis.
Many of us tend to get swept up in the immediate and obvious — not necessarily what is most important in the long run. As a small business owner, it feels natural to be responding to clients' needs and concerns, dealing with the employee's truck that is broken today and helping the trade contractor get what he or she needs so work can proceed. These are all important matters, but if all the attention of the company is focused on this unending flow of important and short-term concerns, it is very likely that serious challenges will not be anticipated. The trick is to focus on both the present and the future, without excluding one or the other.
SWOT is an acronym that stands for Strengths, Weaknesses, Opportunities and Threats. By doing a Situational Analysis (otherwise known as a SWOT Analysis) it is possible to look ahead to see the company's needs before it becomes unsuccessful.
This is an exercise best done with the entire staff. It is surprising what can be learned from a carpenter's helper about these different categories, as such people are often the ones who have the most realistic view of what kind of experience the company is actually providing to clients.
It is most effective to do this download with the assistance of a facilitator. When the business owner takes the role of facilitator in this exercise it is normal that the openness of the attendees is diminished. Simply by body language responses, if nothing else, the owner sends messages approving or disapproving of what he is hearing.
Once everyone is gathered, employees are first asked to identify the firm's strengths. Wikipedia defines strengths as attributes of the organization that are helpful to achieving the objective.
We do not spend enough time celebrating what we do right. This is a good starting point for this exercise. It is also an opportunity for attendees to acknowledge the good things that coworkers do on behalf of the company.
The powerful thing about strengths is we can decide to focus on how we can do more of what we know really works and is effective. Sometimes, simply stopping and noticing can make a big difference from that point forward. If this works so well in this situation why don't we do it more often?
Weaknesses of the company are often stored up in coworkers' heads. Why do we handle this need in this manner as opposed to a different way when we know the way we do it is not as effective as anyone wants it to be? Wikipedia defines weaknesses as attributes of the organization that are harmful to achieving the objective.
This is an extremely important area to explore thoroughly. The insights are critical in helping to decide what the company is going to stop doing in its operations.
Wikipedia defines opportunities as external conditions that are helpful to achieving the objective. Working together, the members of the company talk about what they see in the marketplace that the company could exploit to achieve even more success.
This will involve a little stretching, as opportunities don't always seem that obvious. What do we do really well for our clients and how could we find more clients? Those are examples of the kinds of questions that are worth considering.
Finally, it is time to focus on threats. Wikipedia defines threats as external conditions that could do damage to the business's performance. What is happening with market conditions that could be a challenge for the company? Who are our competitors, and how healthy are their businesses?
A thorough examination of threats makes it less likely that the company will be blindsided by something that could have been anticipated, if the time was taken to think about what could go wrong before it happens.
The SWOT Analysis has really galvanized the company! It has been a wonderful day. The hard work of setting current concerns aside and looking to the future will really pay off with a more focused group of people, all attuned to what is and, more importantly, what could be.
|Paul Winans CR works with Remodelers Advantage. He is a founder of Winans Construction, which he and his wife, Nina, sold in 2007. He can be reached at [email protected].|