How Small Business Owners Overlook the Obvious by Failing to do a SWOT Analysis

February 24, 2010 by Mary Ellen 

Robert’s business grew quickly, passing the million dollar mark with ease. Two partners, three senior staffers and five additional employees produced volumes of work. Revenues increased. The firm survived fifteen good and not-so-expansive years. Then, things changed.

Contracts slowed or stalled. Jobs fell off. The application pile of good job candidates increased and so did the pressure inside the company.

“Money’s tight these days,” Robert said. He introduced weekly meetings to discuss ways to close more deals.

“Nobody does what we do,” he emphasized and brought in a sales consultant. The staff got quotas.

Robert fought down a panic attacks: “What if nothing changes?” he wondered.

I sat down with Robert (not his real name) to discuss a  marketing plan. We began with a SWOT analysis.

SWOT, an acronym for strengths, weaknesses, opportunities and threats serves up a business snapshot for the entrepreneur.
Instead of searching “out there” for answers, the business owner who puts a solid SWOT analysis can look at his market with a different perspective. In Robert’s case, adding his partners and senior staffers to the think tank could provide additional brainpower, synergy and ideas.
I suggested facilitating a discussion of the SWOT quadrant with these questions:
Strengths
  • What is the firm known for?
  • What do repeat customers cite as their reason for doing business here?
  • How has innovation played a role in the firm’s success to date?
Weaknesses
  • Are there known vulnerabilities?
  • What kind of deadlines, time constraints and money pressures are facing the firm?
  • How has the firm been impacted with market changes?
Opportunities
  • Where in the industry is the least competition at this time?
  • Could joint ventures present monetary advantages?
  • What projects earn the highest rates or highest margins?
Threats
  • Will market demand change in the near future?
  • What unconsidered obstacles might emerge to impede progress?
  • Is sustainable financial backing available for the foreseeable future?
No one answer exists. Thanks to a SWOT analysis, the right series of questions can position you to move forward and exploit strengths, resolve weaknesses, defend opportunities and reduce threats.
A SWOT analysis is one necessary aspect of a marketing plan. Have you started yours?
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Filed under: Blog, Entrepreneurs, Marketing
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Comments

One Response to “How Small Business Owners Overlook the Obvious by Failing to do a SWOT Analysis”

  1. Mary Schmidt on February 24th, 2010 9:02 am

    And another real-life example: A “Big competitive advantage” IS NOT that “Everyone we talk to is intrigued by the idea.” Yes, but will they pay for it?

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