How well do you know your business?
The #staywoke thing trending right now is the fact that everyone wants to own/start a business, become a boss and take a bow from the 9-5 work schedule. Well, that ain't a bad idea but before you take a leap of faith to start a business, and if you have one already, it’s important that you ask yourself this question: How well do I know this business I want to start. And if you have started a business already this line of thought applies to you also. What kind of information do you have concerning your business? You must understand that your business cannot exceed beyond the capacity you have built to make it grow and suceed. This can only be possible with the amount of information, research and analysis you have put in to access your business possibilities. One way to do this is by carrying out a SWOT analysis.
SWOT analysis is a business analysis technique that a business performs for its products, services and markets when deciding on the best way to achieve future growth and success. SWOT is an acronym for Strengths, Weaknesses, Opportunities and Threats. It involves identifying the strengths and weaknesses of the business also the opportunities and threats present in the business market. A business SWOT analysis gives you information on the leversge your business has against its competitors and identifies future opportunities and trends to initiate in its business systems.
Businesses or organisations conduct a SWOT analysis to determine the overall strategic position of the business and its environment. It identifies different strategies or techniques a business can use in line with its resources and capabilities in the environment where the business operates. In other words, it highlights all positive and negative factors inside and outside the firm that affects the success or growth of the business. SWOT analysis studies the environment in which a buisness operates and helps in forecasting trends and opportunities. This is to strategically position the business in its environment.
Carrying out a successful SWOT analysis on your business gives you the power or leverage you need to make your business grow. Its more like conducting a feasibility studies for your business which is important before you decide to venture into any business. So, you ask yourself, this new product I’m about to introduce, what’s the probability that it would thrive in my current environment? What areas of my business do I need to invest more?
Strength: Strengths are the qualities that enable your business to accomplish its goals. It gives your business a competitive edge and it is the foundation on which continued business growth and success can be made and sustained. The strengths of your business include the business valuable resources, the expertise of the business owner or its employees, it's loyal customers, channels of distribution and the niche that makes your market unique.
Weakness: These are the qualities that prevents your business from accomplishing its objectives or maximising its full potential which can in turn influence a business growth and sucess negatively. Your weakness depreciates the values or services your business has to offer, and this places it at a disadvantage with its competitors. It could be bad location, inadequate or insufficient resources, low product range and the likes. However, since these weaknesses are internal, they can easily be identified and controlled.
Your business operates in a given environment...unless it's in Planet Mars. This environment could either pose as a threat or an opportunity for your business growth. These are the external factors of your business, it exists beyond your market scope and include current technologies in place, business models as it relates to doing business in that environment, country laws and regulations, political atmosphere and other third parties which include the media environment, partners and the likes. If not properly analysed, these things can destabilize your existing business strategies and position in the market which you have worked so hard to attain.
Opportunities: Your business opportunities are presented by the environment in which your business functions and thrives in. Opportunities arise from changes withing the market space, customer preference, new technologies, government policies. When a business leverage on the benefits that arise in its given environment to plan and execute its business strategies, that business will definitely have a competitive edge in the market, why? Because it made use of the opportunities presented by its environment. As an entrepreneur, you should keep abreast of whats happening in your environment, constantly review current trends and practices that can help your business grow and Increase its market share. You need to be able to forecast and predict what the next big thing might be for the future. For example, you have a business, or you want to start one and your business is yet to get online, or you don't even have a plan to put your business online, then how will you grow and attract more customers. If that is your case, then its either you are still living in the first century and you certainly do not deserve some accolades. Dear budding entrepreneurs learn to keep up with market trends because there may be opportunities available for you when you leverage on them.
Threats: Now, don't let this one scare you. We are going to take down this giant when you picture it like bar of chocolate or anything you like. Threats are presented when certain factors in an external environment distabilize the plans, sttategies and like profitability and growth of the business. It could be reduction in competitor prices, economic recession, stringent policies, alter in demographics. Threats could sometimes be uncontrollable. You can imagine the time of the great depression in America, a lot of business shut down due to some factors beyond their control like the economic recession. However, some business could still thrive like that of the Bank of America when it was founded by an Italian. So, depending on how you see it, no matter the threat, your business can still thrive when you have the right systems in place. The better you are able to identify threats, the more proactive you become in responding to those threats against your competitors. You need to keep thinking of how you can use those threats to your advantage.
As an entrepreneur, a major goal for your business is to have it grow and succeed in any environment you find yourself in. But for this to happen, you must know your business well. What kind of information do you have concerning your business? Have you even carried out any research at all? You may need investors for your business, how do you pitch to them when you have never carried out a SWOT analysis? Starting and owning a business is not child's play. You have to be intentional, strategic, proactive. SWOT Analysis is important in planning strategies. It helps guides your business because you will know how to expand your strengths, work out your weakness, protect against threats and monitor the business environment to leverage on new opportunities. When you do not even plan to analyse your business growth factors, that business may eventually come crashing down like the wall of Jericho when faced with any form of obstacle...and this is not a threat.
Tell us, how well do you know your business? Join the conversation.