You Need To Do An Occasional SWOT Analysis Of Your Business!

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.

Please enjoy— 

SWOT Your Business
 
by Ron Roberts

 

Today we’re going to dive into an activity that is

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.

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SWOT: Strengths, Weaknesses, Opportunities, & Threats

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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
best interest?

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
thoroughly evaluated.

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
strategic plan.

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
disadvantage. Discuss:

  •     Brand image
  •     Equipment fleet
  •     Cost structure
  •     Field management
  •     Field productivity
  •     Job costing and estimating systems
  •     Marketing and sales systems
  •     Hiring and retention
  •     Communication
  •     Teamwork
  •     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
    can.

    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
    manner.

    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.

In closing we try and follow three sets of rules, our wives’, the
Ten Commandments,  and “The 10 Biggest Mistakes Contractors
Make”. Let us help you master your business. Help is just a
phone call away!
Wishing you great success in 2013.Guy and Ron

P.S. Want your business to grow fast? Check  it out here.

P.P.S.  Questions or comments? You can reach

Guy at 773-870-6500 or Ron at 913-961-1790.The Contractors Best Practices Newsletter is written

and distributed by Ron Roberts & Guy Gruenberg,
www.USCTCA.com
www.ContractorsBusinessCoach.com
-All Rights Reserved

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