Blog Layout

SWOT Analysis 101: How It Can Help Your Business Succeed
Andrew Stubbs • Aug 08, 2021

One of the first things you learn in business school is the SWOT analysis. It's an incredibly simple, yet still powerful, tool to help you develop your business strategy. It is surprisingly effective whether you're building a startup or guiding an existing company. And one of the things about a SWOT analysis, is how straightforward it is.


As it's a framework, rather than a staged methodology, even a mini-SWOT (perhaps done on the back of a napkin while waiting for your barista to whip up your morning latte) can be useful. Then again, if you want to go deep, the SWOT approach can also serve to guide days worth of discussions.   

    

So, if you need a refresher or you skipped SWOT class in first-year in business school, read on for a rundown on what's involved.


What is a SWOT Analysis?


First up, SWOT stands for: Strengths, Weaknesses, Opportunities and Threats. These are then typically split into the pairs of SW and OT - why this is done will become clear. 


The first half, Strengths and Weaknesses, are both internal to your company. They are things you can control and change directly. Examples include: 


  • Who is on your team
  • Your patents and intellectual property
  • Your location.


The second half, Opportunities and Threats, represents external forces, events and other things that are going on outside your company's sphere of influence. They might be taking place in the market, in the economy, at a political level or even on a global scale (such as COVID-19).


These phenomena form the context within which your business operates. While you can't influence these factors, you can categorise them as either things to take advantage of (Opportunities) or things to protect against (Threats). Examples include:


  • Competitors
  • Prices of raw materials
  • Customer shopping trends.


Usually taking the form of a box grid or four lists side-by-side, the SWOT analysis brings clarity on the major aspects of your trading environment that can help guide your company through highs and lows.


How to conduct a SWOT analysis


While there are various ways to conduct a SWOT, we have found that a straightforward 8-step approach serves well. 


1. Decide on the objective of your SWOT analysis


To get the most out of your SWOT analysis, you should have a question or objective in mind from the start. For example, you could use a SWOT analysis to help you decide if you should introduce a new product or service.


2. Research your business, industry and market


Before you begin the SWOT analysis you need to do some research to update your understanding of your business, industry and market. Get a range of perspectives by talking to your staff, business partners and clients. Also, conduct some market research and find out about your competitors.


3. List your business's strengths


Getting into the meat of the SWOT analysis, you should next identify and list what you think are your business's strengths. Examples could include your employees, financial resources, business location, cost advantages or competitiveness.


At this stage of the SWOT analysis, your strengths list does not need to be definitive. Any ideas and thoughts are welcome. Braindumps are encouraged. (The refining process occurs in Step 7.)


4. List your business's weaknesses


List things in your business that you consider to be weaknesses (i.e. that put your business at a disadvantage). Weaknesses could include an absence of new products or clients, staff absenteeism, a lack of intellectual property, declining market share, throughput difficulties or distance to market.


5. List potential opportunities for your business


Think big about the possible external opportunities for your business. If the strengths list identified what you have got, then the opportunities list covers what you can do with it.


What you write for this stage will not be necessarily definite. Further, an opportunity for one aspect of your business could be a threat to another. For example, you may consider introducing a new product to keep up with consumer trends but have a production line that's already overstretched. While you should keep this sort of scenario in mind, for the purposes of a SWOT analysis the same item shouldn't be listed as both Opportunity and Threat.


Examples of opportunities could include new technology, training programs, partnerships, a diverse marketplace and a change of government.


6. List potential threats to your business


In the last list, set down the external factors that could be a threat or cause a problem for your business. There's no set "degree of risk" that qualifies whether a factor should be included here - write it all down. Even small threats, if left unresolved, can snowball into disasters later on. 


Examples of threats include unemployment rates, industrial action, increasing competition, interest rate fluctuations, commodity prices and the uncertainty of global markets.


7. Establishing priorities from the SWOT


When you have completed the steps above, you will have four separate lists. We prefer the side-by-side approach as it doesn't constrain how long each list can be. Viewed as a whole, these four lists illustrate the overall picture of the salient factors upon which your business depends and within which it operates.


From this view, you can then work out what issues are the most pressing and what can be dealt with later. By prioritising the items in your lists according to their criticality, you can ensure you're putting out the fires before starting the renovations, so to speak.


8. Develop a strategy to address issues in the SWOT


The basic approach to reviewing your prioritised lists begins with asking a series of questions that play one factor off against another:


  • How can we use our Strengths to take advantage of the Opportunities identified?
  • How can we use these Strengths to overcome the Threats?
  • What do we need to do to overcome the identified Weaknesses in order to take advantage of the Opportunities?
  • How will we minimise Weaknesses to mitigate the Threats?


Think hard and write your answers down. Once you have answered, you can now use the SWOT analysis to develop strategies for achieving your business goals. It's good practice to revisit your SWOT annually. In this review, pay special attention to changes in the Weakness list: this is often a good yardstick for the pace and form of your business's evolution. Also, as old entries on the Weakness list are resolved, unexpected new ones tend to emerge.


Harness the power of SWOT analysis


Like any tool, a SWOT analysis is only as good as how it is used. To get the most from the exercise, it might be useful to sit down with a "sounding board" person - someone who knows your business well, but is not necessarily part of it. Or, you can just start your SWOT on a napkin at a cafe.


The important point is that conducting a SWOT works for your business and helps you pursue your professional goals. After all, isn't that why you're in business anyway?


Need help conducting a SWOT analysis? Get in touch today to see how we can help you kick a goal.

By Andrew Stubbs 05 Jun, 2022
Here's some good news if your business sends invoices to business or government customers. Peppol* is on its way. (That's Peppol, not Peppa .) Ever had this conversation in your business? You or one of your team: "Hello, I'm calling to follow up the invoice we emailed to you last month. It hasn't been paid yet." Customer: "Really? We didn't receive that invoice?" In addition to the time and expense of following up, the cash flow delays create stress for you and they hurt your business. Thankfully, the adoption of Peppol will solve this problem. What is Peppol? Peppol is an obscure acronym for Pan-European Public Procurement On-Line. What's more important than what it stands for, is what it enables. Peppol is an international 'eProcurement' framework for the electronic exchange of information. It creates a standard approach for governments and businesses to structure and exchange information such as invoices and other documents. What Peppol means for you and your business Peppol makes electronic ordering, invoicing and shipping between governments and private companies faster, simpler and more secure. This means your business will get paid faster when dealing with government and larger businesses. In 2019, Australia and New Zealand adopted this platform for e-invoicing which, when implemented, will make 'we never received your invoice' issues virtually impossible. The new e-invoicing system is more secure than email and provides many other benefits. Which countries are adopting Peppol? There are currently 40 OpenPeppol member countries: 32 countries in Europe plus Australia, New Zealand, USA, Canada, China, Japan, Mexico and Singapore. Each country has a Peppol authority. For example, in Australia that's the Australian Tax Office (ATO). Is Peppol already in use? Yes it is. For example, the SuperStream system in Australia-which many businesses are currently using to automate the payment of employee superannuation contributions-is based on the Peppol protocol. How does e-invoicing work? The system connects the accounting systems of all businesses and government departments via the secure Peppol network.  Suppliers generate sales invoices in their accounting systems which are sent to Peppol.
By Andrew Stubbs 04 May, 2022
If you're a director of an Australian company-or you plan to be-take 5 minutes now to read this article. All existing directors (and intending directors) of Australian companies need to be aware that the Australian Government has announced the introduction of a new mandatory Director Identification Number (DIN) system. (You'll notice the term director ID is also used for DIN.) This system is the initial step in the Modernising Business Registry (MBR) Program which has been established under the Treasury Laws Amendment Act which was legislated by the Australian Government in 2020. More information on the MBR program can be found here . What is the DIN system trying to achieve? The DIN aims to provide accountability and traceability of a director's relationships over time, across all companies and will provide information on a director's involvement in what may be repeated unlawful activity, including illegal phoenix activity. It should also solve the problem of false or fraudulent director identities. What are the key features? It is mandatory for all directors, foreign directors and alternate directors of Australian companies to hold a DIN. The DIN is a unique 15 digit number. The first 3 digits will be 036 which is the identifier for Australia. The last digit is a check digit to help with accuracy when quoting your DIN. Like your tax file number, you will only be issued with one DIN which you will hold for life - even if you cease acting as a director for any period. To obtain a DIN, you will need to prove your identity so you will not be able to hold multiple DINs. Other office holders (e.g. company secretaries) are not required to register. The director is responsible for updating the DIN records for any changes in personal information within 7 days of the change. The director must apply personally. The process cannot be completed by your accountant, lawyer, spouse or executive assistant. There are significant penalties for non-compliance. How do you apply for a DIN? Directors have 3 options for applying. You can apply online from 1 November 2021. To use this method, you must first establish your identity via myGovID (an app you download on your smart device which is different from myGov). Once set up, your myGovID will make accessing a wide range of government services easier. (It's not just for your DIN application). For information on how to set up a myGovID please go to https://www.mygovid.gov.au/set-up During the DIN application process, you will need additional information such as your tax file number (TFN) and your residential address as per ATO records. It would also be advisable to have other personal details such as bank account details, medicare card or a recent income tax assessment available in case these are required. You can also apply by phone ( 13 62 50 ). During the call, the operator will ask for the identity documents you would have used to obtain your myGovID (passport and driver licence) as well as the additional information listed above. These details will be confirmed with the records held on existing government databases and, assuming the details agree, your DIN will be issued. Or you can apply by mail, but this is not recommended because the process for doing this seems vague ("Write to us") which means you can probably expect a lengthy process of certifying documents and coping with the vagaries of the postal system. One of the other two methods would be a better choice. When will you need to apply for a DIN? Transitional arrangements will allow directors to become familiar with the new requirement. When you need to have a director ID will depend on when you were appointed as a director.
By Andrew Stubbs 07 Apr, 2022
If you're a small business owner, you're always on the lookout for better ways to go about routine tasks to boost growth and underpin reliability. So, yes, you have the will; now, what are the ways? What are those consistent routines you can instill that will have the most benefits? This article looks at the top 6 things you can do to help your business thrive. We're going to cover finances, goals, marketing, technology and you ! So, let's take a look… 1. Your finances are a scorecard … and a predictor Boil it all down and dollars in the bank are the report card on the health of your business operations. Surprising then that so many people don't really pay much attention to how much they've earned, nor how much they're likely to earn. As much as it might feel like a chore, reviewing your sales and financial projections and then using them to ascertain if you need business financing is a discipline worth cultivating . If you suspect that your cash flow is precarious, you should be checking out your options today. First metric to check: your credit score. If it is too low, you need to take steps to shore it up. Next, check in with your bank or finance broker about what loans are available. 2. Goal setting, goal achieving, goal celebrating So, if you're using current and future dollars in the bank to keep score, the next thing is to do something about it. This is where goal setting comes in. If thoughtfully set and persistently pursued, goals help you orientate your willpower and your energy at each moment of the business day. This is the hidden power of goals: giving you a good sense of direction and a way to channel your instincts towards wise objectives. Constantly checking in with your goals makes them a benchmarking tool to keep your business pointed in the right direction. Yes, just having goals helps. Actually achieving a goal helps too, of course! 3. Increasing the impact of your marketing Marketing is not magic. It is not a mystery. It is not an art. However, many less-than-reputable marketers will try to claim that it is. They do so to gain wiggle room to pad their invoices and cover up their lack of skill. What this means is that it is easy to waste money on ineffective marketing. The good news is that there are many low-budget marketing strategies that actually work to help grow your brand and reputation. Scout around on the internet and choose one or two new tactics. Deploy them and test them. If they work, double down. If they don't, try something else. If you can't tell if they're working, also try something else. Social media is the obvious starting place for these low-stakes experiments and the old classics of LinkedIn, Facebook and Twitter are where to trial them. 4. Bringing your business up to date technologically The ability of modern productivity and project-management tools to give small players the same capabilities as the big boys simply cannot be ignored. Harness them properly and they'll let your small businesses operate with the same productivity as the titans of your sector. And, if your business is in the services sector, the increased controls that business technologies can yield also lets you be highly agile - that's something the big boys can't do. So, ask yourself: are you taking full advantage of what's out there? Don't worry, the answer to this question is always 'no' - the field is simply moving too fast for anyone to be able to take full advantage. However, if you have a realistic view of your needs, then you have a yardstick to help assess all the solutions out there. When you know what you need the technology to do, then you can wisely choose what hardware, software, platforms and techniques to introduce. 5. SEO has changed and it is going to change again Google - indeed all platforms offering broad search functions, from Youtube to Facebook - are constantly altering and optimising their algorithms. This, in turn, means SEO practice must constantly evolve to keep pace. So, if your SEO approach hasn't been overhauled in a few years, the time has come to give it some attention. Do a review of best practice and score how you cater to SEO in your online presences. Yet, because the underlying concept of SEO has not changed, the corrective actions you need to take may not be major. Then again, they might be! It is better to know unpleasant news sooner than outright bad news later. 6. Download the right new apps The remote work trend has gone mega and this means mobile productivity apps are very much of-the-moment. See, you can get a surprising amount done with just your phone and tablet. And apps are how it all happens … plus connectivity and a full battery, of course! Usually, apps are best for keeping an eye on things, boosting effectiveness on the "busy" tasks and enabling you to give your stamp of approval to work that needs your say-so to progress. In general, these are not value-adding tasks, just the value-neutral tasks that get in the way of the value-adding tasks. Now, there is no end of apps out there. So, as always, don't bother looking until you have some idea of what you need. 7. You are the ultimate business tool Health is the single most important aspect to consider for anyone running a business. It's the non-negotiable factor that governs everything else you are capable of. To adapt a quote from Arnold Schwarzenegger, being fit and healthy is "a status symbol. It reflects you worked hard for it; no money can buy it. You cannot borrow it, you cannot inherit it, you cannot steal it". This means that you must get enough sleep every night (most people need 7 hours or more). This means a healthy diet must become your preferred way of eating. This means that you should exercise every single day (except when sick). This means you must give your mind a rest too . Meditation isn't some mystic monkish thing, it's simply the practice of letting your thoughts come and go while you - the observer - stay peaceful and undisturbed by them. Think of it like this, meditating is mediating your mind. Take stock, choose wisely, make small steps in the right direction In this article, we've talked about some improvements you can make to what you're already doing. You don't have to do all of these at once. Start with the one that seems easiest and then stick with it to see if it works. Remember, it's not always about big changes. Often, you can make major improvements in outcome by making small changes to input. Doing the little things better. So take stock, choose wisely and be sure to make those small steps in the right direction for success today, tomorrow and the next day.
More Posts
Share by: