An abbreviation for strengths, weaknesses, threats and opportunities, SWOT analysis, is a strategic business technique which allows an organisation to understand how they have been faring, both internally and externally. It is an integral part of business planning and helps in identifying the growth areas and the high-performing processes.
The strengths and weaknesses are under the control of the management and can be altered for the betterment of the business. A few examples of strengths and weaknesses could be your employees, assets, policies, patents, etc. The external factors which influence a company include the opportunities and threats, and the business owner has little control over them.
For instance, consumer buying behaviour, changing market conditions, competitors, etc. If you wish to start a company or acquire a profitable usiness for sale in Canada, then understanding the intricacies of SWOT analysis is a must. So here is how you can do it right to put your business on the path of success.
How To Do A SWOT Analysis?
To identify the strong points of the company, you need to figure out which are the best-performing processes and products that are generating maximum profits. Similarly, to pinpoint the weaknesses, the organisation needs to understand which projects are failing or causing wastage of resources.
On the external front, you must proactively look for windows of opportunity to gain competitive advantage and steer away from the risks and competitors. However, all of this needs to be done systematically and let us take a look at the step-by-step procedure.
1. Determine The Goal
To get started, you need to decide the objective of the SWOT analysis. For example, you need to do it because you are introducing a new product in the market. The goal should be the driving force behind the strategy. Now take a paper and put the goal on top of the sheet. Create a grid divided into four sections and label each with strengths, weaknesses, opportunities and threats.
2. Market Research
The next step is to know your market thoroughly. You must have a clear understanding of the prevailing economic conditions of your business and industry. To determine the exact scenario, you will have to speak to a lot of people, such as your core team members, shareholders, customers, suppliers, vendors, etc.
Your bookkeeper and accountant will be helpful in ascertaining the financial health while the project managers will be able to shed light on the levels of productivity of their respective departments.
3. Note Down The Strengths Of The Business
Now that you have gathered sufficient information about your business and the external environment, you are in a better position to list down the strengths of your company. These must include both tangible and intangible items and should be previewed from an internal and external (customer’s) perspective.
For example, you will enlist the things that you are doing better than the others as well as the things which are liked by your customers. You can put down your unique selling proposition in this list and other positive attributes of the business, such as an increase in customer base, best resources, advanced technology, skilled employees, better stock acquisition, etc.
You will have to think from the customer’s viewpoint as well to list items like affordable and durable products etc.
4. Identify The Weaknesses
Move to the box labelled as weaknesses and start listing down the negative points of your business and the places where you are struggling. It could be a failed product, delayed delivery of products, lack of qualified staff members, incompetent managers, shortage of capital, falling sales and profits, etc.
These are the areas that need improvement or the things that should be avoided by the business to stay afloat. Again, you must include all the factors which your customers view as your weak points, such as high maintenance products or lack of loyalty programs. So when you implement the business strategy created after the SWOT analysis, you must work on improving in all these areas.
5. Find Out The Existing Opportunities
The external environment has several opportunities, which need to be picked up carefully by a business owner. The reason behind being choosy is that what you might consider an opportunity could turn out to be a threat. For example, you identify a new marketplace to expand your territory but are not aware of a similar expansion plan being undertaken by your competitor.
For example, when you are looking for Canada’s best places to buy a business, you must think about the burden on your current set-up with this new acquisition. So you must carry out ample market research before picking up an opportunity and listing it down. Other things that can become a part of this section are new business partnerships, new products, new technology, etc.
6. Don’t Forget About The Threats
You need to be vigilant of the external elements that can have a negative impact on your business. From new entrants coming into the market to economic downturn and change in consumer behaviour, you must be cautious of all the changes taking place in the outside world.
If you don’t have a contingency plan in place for such challenges, it can lead to instability, financial loss and attrition. Thus you must implement a risk management plan which allows you to recognise the potential threats and work out ways to reduce their impact.
7. Prioritise The Burning Issues
At the end of this exercise, you will have a grid with four sections, and each of them will be filled with lists. Now you need to determine which issues need immediate attention. So create a priority task list of the most crucial items listed in the SWOT analysis and create a strategy.
The aim should be to build your strengths to leverage the opportunities and get rid of your weaknesses to avoid threats. This strategy should be aligned with your business goals. For example, if the unskilled staff is a weakness, you must include staff training in business planning and budgeting to overcome this hindrance.
Thus the SWOT analysis can be utilised to develop business strategies that target the pressure points and bring out the desired results. So if you are looking for a business for sale in Canada, you must be aware of this type of analysis to build the perfect roadmap for success. It works as a handy tool to get things fixed on time and move in the right direction.