The guys over at “The Contractors Business Coach” have an interesting article that goes into more detail on the subject of the S.W.O.T. analysis and how it can help your business. So I am going to present it here for your education and use.
You need to visit their site at thecontractorsbusinesscoach.com for some interesting comments regarding the contracting business. You will note that I am adding it to my blogroll.
commonly used by companies large and small: SWOT
analysis. SWOT stands for Strengths, Weaknesses,
Opportunities, and Threats. SWOT’s purpose is to
clarify the internal and external forces that shape
your business’ future.
SWOT: Strengths, Weaknesses, Opportunities, & Threats
A SWOT analysis is a vital first step in building a
viable strategy for growing your business. It sets the
stage for your strategic decision making. Helps bring
to light issues that you may have overlooked…issues
that could boost your bottom line and issues that could
crush it. See why doing a SWOT analysis might be in your
SWOT is a brainstorming activity with a twist. Pure
brainstorming means throwing ideas on the wall without
judgment or discussion. SWOT kind of works that way but
discussion is mandatory. Each suggestion needs to be
Before diving into the nuts and bolts of SWOT we need
to address the format. The first question that should
have come to your mind is “Who should be involved?” The
answer may be a little uncomfortable for you. To really
drive quality in the SWOT, it should be a group exercise.
You want as many divergent perspectives on your business
and your competition as possible. Include your most
trusted advisors, your best field leaders, and your
clerical staff. Consider bringing in outsiders who have
proven to be good friends of your firm such as a key
supplier or subcontractor.
Pick a room that comfortably fits everyone and has empty
walls. You will be taping flip charts to the wall as you
work through the SWOT. Make sure everyone has something
to drink, something to jot notes down on, and something
to write with. Round up a flip chart, tripod stand,
permanent markets and masking tape.
Turn cell phones off. Not vibrate. Off. No checking of
texts and emails.
Record the group’s consensus opinion in each of the four
categories. You and your most trusted advisors will take
the SWOT results, huddle up in a conference room somewhere
(preferably off site) and translate the knowledge into a
Now that we’ve got the preliminaries out of the way, it’s
time to show you how to work through your SWOT.
Strengths and Weaknesses
The Strengths and Weaknesses pieces focus on your business’
internal capabilities. You need to consider nearly every
aspect of your business and decide whether it is a strength,
weakness, or neither. “Neither” means that the item doesn’t
provide a competitive advantage nor a competitive
- Brand image
- Equipment fleet
- Cost structure
- Field management
- Field productivity
- Job costing and estimating systems
- Marketing and sales systems
- Hiring and retention
- Financial positionList the strengths together on one flip chart page(s) and the
weaknesses on another (others). No need to list the “neithers”.
Pay particular attention to the strengths. Human nature is to
assume something is a strength when it really isn’t. Something
is a strength if we are better than average at it. More than
likely your strengths have not come about by accident. They
probably reflect your personal priorities and habits.
Hearing others list your weaknesses may be a bit uncomfortable
for you. Don’t let your emotions discount the feedback especially
- if multiple people agree with the assessment. The
SWOT isn’t meant to be a fun-filled validation of your
greatness. It is meant to be a honest, deep dive into your
business for the sole purpose of strengthening it. It you
aren’t committed to running a strong business don’t run a
SWOT exercise.Opportunities and Threats
Opportunities and Threats focus on external forces. They
mostly revolve around available markets and you competitions’
strengths or lack thereof. Opportunities explicitly refer to
unmet client needs. Threats refer to anything that could cut
into your margins and sales. Items to explore:
- Your reputation with clients
- Loyalty of your clients
- Loyalty of your competitions’ clients
- The strength of the near term economy
- The ease of new competition entering the market
- Truly strong competitors who are taking market share
- If price wasn’t an object what would clients want?
- How could you make the client experience better?
- Who could you partner with that would change the rules of the game?
- What legal trends are brewing that might affect you?
- Are building codes changing?
- What types of projects do your competitors hate to do?
- Who is most likely to cut you off from your best clients?
- Who has the most productive workers (this is IMPORTANT)
- Any competitors who might be ready to get out of the business?Again, explore each of these issues in depth. Challenge
assumptions. Threats are something to keep an eye on.
Opportunities are something to capitalize on as quickly as you
Before wrapping up the SWOT, take time to check the assumptions
behind each item you’ve listed. For example, a strength isn’t
really a strength until your clients have verified it in some
Taking SWOT to the Next Level
After completely the SWOT but before building your strategic plan,
SWOT your primary competition. Make educated guesses as to why
they are in the position they are in and whether they are apt to
change their business approach. Will their strengths and
weaknesses change? That is helpful to know prior to developing
your business strategy.
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P.P.S. Questions or comments? You can reach