At one point in life, we have pondered the idea of having our own enterprise. The thought must be reviving, and every time you think of it a cold chill rushes down your spine. Keep in mind, every venture is bound to succeed, and rarely does one think of setting up their business with intentions of failing. Since the object of building a business is not failure, there are techniques available to help assess your business and plan for success.
These techniques allow businesses to assess the viability of a given venture before deciding to actualize it. Every business person should know how to use this popular technique to identify Strengths, Weaknesses, Opportunities, and Threats (SWOT) Analysis. A SWOT analysis has proven to be effective in assessing business ventures, and mastering it will help any newbie and experienced businessperson.
What is a SWOT analysis?
Simply put, the term SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. Therefore, SWOT is a type of analysis that basically analyses the four factors of a business. By understanding the hazards that may befall a business it is possible to dodge them and therefore promote the sustainability of the business allowing it to operate to infinity. The analysis can be carried out by a matrix that simply assesses the strengths, weaknesses, opportunities, and threats in one box to help seal the fate of the company.
Strengths
Strengths can be simply understood as things that an organization does with great ease and skill that makes them stand out from the competitors. To fully assess the strength, one must be aware of the competitors in a deep sense as this should be done in comparison. Every action counts, and employee motivation might be a factor of distinction alongside better customer relations and swift replies. Switching the view and assessing the company from the competitors’ view, explains what others might see in your company as worthy competition. This information can be the selling price and quality of your products among other positive factors that you may find compared to your competitors.
Weaknesses
This entails acknowledging what the company is poor at doing or what makes it vulnerable. The assessment must
be realistic, and despite how hard the truth might be to swallow, it must come out. Weaknesses are part of an organization that is important to identify quickly. The sooner an organization realizes its weaknesses, the faster it can make amends on the existing weak points. When assessing what amends need to be made the improvements should be tied to the existing weaknesses, and progressively implemented as a company works its way towards self-sufficiency, letting it stand out against its competitors.
Opportunities
Opportunity means opening arms to receive any positive changes that can come within the scope of operation. By identifying opportunities and waiting in line businesses are better prepared to grab upcoming opportunities. As the old adage goes, opportunities come once. A business needs to be aware, informed, and positioned to identify emerging problems and offer solutions as this will give them a competitive advantage against their competitors. Not all opportunities are tangible. When businesses are prepared and can avoid problems and can plan, there is an opportunity. The good opportunities one can spot need not be major deals but understand any deal that will offer an advantage, as small as it may be, should come in handy in assessing trends that positively influence the company.
Threats
The opposite of an opportunity is a threat. Threats negatively affect the organization. Threats can therefore be anything that negatively impacts the business and causes a downward slump of a business. When assessing threats, they must be given the same weight as opportunities. As much as y can overshadow a threat, the impact that both threats and opportunities bring to the organization are substantial. Therefore, it logical to treat them with the same intensity and weight. To comfortably see the threat, one thinks of the obstacles currently being experienced. A good number of threats emerge from the environment of opera- tion, such include: shifts in legislation and technology can have major impacts on the organization.
For startup companies as well as already established companies, the goal is operating to infinity. The SWOT analysis is one of those tools that should be second nature. It can help your business assess its operational environment and will enable them to realize organizational goals and op- erate to infinity.
