This post was published more than 46 months ago. Due to the rapidly changing nature of business and taxation, some concepts may no longer be applicable
man makes plans and god laughs
Following my earlier post about business plans, one of the more powerful tools to better understanding yourself and your business is a SWOT analysis; Strength, Weaknesses, Opportunities and Threats.
Understand what you do better than others and where you fit in. Strengths can be drawn from experience, character traits, educational and career achievements. Advantageous circumstance may include social connections and resource access.
Acknowledge where you need help. Exhaust the options for ‘filling the gaps’ which may involve additional training, drawing on the knowledge and skills of other people, or using external resources.
What are your competitors missing? Identifying opportunities is the first step to realising them. Think creatively and exhaust all possibilities to provide the broadest options.
What do your competitors do better than you? Consider how achievable your goal is, the difficulties faced, the consequences of not addressing any weaknesses. Work out actions to reduce the chance of occurrence and a back-up plan if the threat becomes real.
If you know the enemy and know yourself, you need not fear the result of a hundred battles.
If you know yourself but not the enemy, for every victory gained you will also suffer a defeat.
If you know neither the enemy nor yourself, you will succumb in every battle.
– Sun Tzu
Running a business is like going into battle where you have opposing forces that you will need to address, each with their own agenda, to ensure that the final outcome is a success. Performing a SWOT analysis helps you understand where your business fits in and how to maximise your situation.
It is not enough to just know yourself without consideration to your competitors or their products/services. You must understand your customers/clients to know what they need and want. Similarly, it is not enough to just know what you are good at but also need to know where you are weak and be prepared to seek and ask for help. No one is good at everything and no one should consider going into business alone.
Also like a general business plan, a SWOT analysis will need to be updated and revised as the business and market evolves. Competitors will introduce new products and services that will challenge your existing business. Customer needs and wants will change over time requiring you to adapt with them. Your strengths and weaknesses will change as you learn and grow too.