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Sound Business Practices

SWOT Analysis Guides Business Growth

By Sandy Hershelman

Knowing your weaknesses is your greatest strength. Only after you're willing to admit to a weakness and face it head on, can you turn the liability into an asset.

A powerful tool for personal or business insight is the SWOT analysis. SWOT is an acronym for strengths, weaknesses, opportunities and threats. Strengths and weaknesses are internal factors—and are usually under your control. Opportunities and threats are external factors.

SWOT Analysis
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Your Strengths
Your Weaknesses
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Opportunities
Threats


A SWOT analysis can illuminate a path for personal growth, life direction or business development.

Within a company, the SWOT model makes an effective tool for business planning, evaluating your competitors, marketing, and/or product development. It's also a great way to facilitate a brainstorming session and/or dissect a new business proposition.

We've all evaluated a big issue by making a list of the pros and cons on a piece of paper. SWOT analysis takes that concept one step further.

Before you begin, identify what it is that you hope to achieve by exploring a SWOT. That goal helps drive the questions asked in each category. Make your four-part list:

Strengths: Where do you excel over others? What do you do well? What skills or resources do you have to offer? What would others say are your strengths? Is your work experience, education or personality a strength?

Weaknesses: What do you do poorly, or not at all? What should you avoid? What complaints do you get from others? Do you have a lack of work experience, education, skills or personality?

Opportunities: What opportunities are coming in the near future? Do you have a strong network of business associates? Is business booming? Do you sense a job offer coming?

Threats: What obstacles do you face? Could any of your weaknesses threaten your livelihood? Are layoffs looming? Are the new hires better educated? Are you facing illness or debts?

After completing the exercise, make a plan that minimizes the effects of your weaknesses, maximizes your strengths, and takes advantage of available opportunities. Create an action list—and review it regularly. In a few months, repeat the SWOT analysis to identify your achievements and see what areas still need work.

SWOT builds teams
Your company is only as strong as its weakest link. The wise businessman knows his own weaknesses and surrounds himself with others, who are strong in his weak areas.

Encouraging your employees to recognize their limits, and communicate them to their peers, will make a stronger team. With proper guidance, they are in a prime position to teach themselves to work more effectively, and focus on areas that need attention.

A SWOT analysis used in this manner can be very effective in a workplace. Remember, though: you are asking your team to open up and be brutally honest about their weaknesses. Not all people will respond favorably to this. Respect that. The results of a SWOT analysis need not be made public in order for it to bring about positive personal/company growth.

You may consider bringing in a facilitator for this staff meeting. Owners and employees working through their SWOTs side-by-side makes a powerful pro-teamwork statement.

Allow sufficient time for each employee to complete the SWOT. Give them a heads-up at least a week before you're ready to do the analysis. That way they can think through the process beforehand. As employees share their evaluations and plans, they learn how they can support and help each other accomplish those goals. Challenge your team to look past the obvious and further explore the initial conclusions. Be aware that you may be hard-pressed to get honest answers if an owner or supervisor is the weak link.

Follow up the SWOT analysis with specific goals for improvement and a strategy on how to attain them. By overcoming your weaknesses, you're developing strengths.

More business management articles. . .

© 2004 Sandy Hershelman. All rights reserved.

 

 

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Date Last Modified:5/28/05
Copyright © 1999-2005 Sandy Hershelman. All rights reserved.