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You’ve reached the end of another business year yet again. With the holidays right around the corner, it’s time to sit down, relax, and enjoy what remains of the year.
…well, not quite yet.
You see, this is the perfect time to do a SWOT analysis of your business. You’re on the cusp of a new business quarter. It’s time to think about goals for next year while reflecting on the achievements and not-so-achievements of this year. The easiest and simplest way to do this is through a SWOT analysis.
What is a SWOT analysis?
The entirety of the analysis is built into the name. These four letters represent four categories. Two of the categories discuss advantages and avenues for success. The other two discuss problems that will interfere with that success, if not handled appropriately.
The advantages and avenues are the S(trengths) and O(pportunities).
The problems areas are W(eaknesses) and T(hreats).
Together, it creates SWOT. And doing your own end of the year SWOT analysis is quite simple. But you have to keep something in mind.
Brainstorming the strengths and opportunities of the past year are easy. It’s basically your time to gloat about your successes. And the things that make your business unlike any other. It’s the most fun aspect of the analysis.
But then there’s the other side. The weaknesses and threats side. This part isn’t so fun. You have to be honest about what didn’t work so well this year and why it didn’t. If you’re not honest, your results for the analysis will be superficial. And it can’t lend much help for the new year if it’s superficial.
With this said, why not just jump right in? We’ll start with the first “fun” section — the strengths.
Why discuss strengths?
It feels good to talk about your accomplishments. You’ll also think about how these accomplishments happened and if they’re still in-line with the original goal you set earlier this year.
Not to mention, knowing where your strengths lie makes it easier to achieve new goals. You’ll know how to position yourself, the business, and your offerings to appeal to the right people. And at the right time.
Some things to think about:
- What is the unique selling proposition (USP) of your business?
- Did you use your USP when selling or marketing your business?
- What were the results of using it? More customers/sales/interest?
- What goals did you achieve this year?
- Did you meet the deadline of each goal?
- Were these goals planned?
- What or who helped you achieve these goals?
- What did you gain this year?
- Investments? Funding? New customers?
- What are your customers saying about you?
- Where are they saying it? (Online/forums/review sites)
- Are they talking more or less about your business?
- Is this a good thing?
When you’ve written down every single strength or good thing that happened this last year, study it. I’d look for any overlapping themes. For instance, maybe honing into your USP attracted new investors, which led to press releases or articles about your company. Perhaps the press release and articles were just a bonus to getting investors. It’s an accidental strength, and maybe you can leverage it next year.
Now we’re going to move onto weaknesses. Exploring the “failures” of the last 12 months might hurt. But even in business that old saying “no pain, no gain” follows us. Don’t forget this while you honestly start the next section. This may be the most important section for your business.
The real reason why every business owner should focus on weaknesses
You ever had a friend who talks too much? Not only that, he only ever talks about himself? Every time you meet, he just… never shuts up. He means well, you know. But sometimes, when you’re around him, you just need a few seconds of silence to sort yourself out. And your friend, Peter, just doesn’t get why his incessant talking is a problem. He loves to tell stories (about himself)! Who doesn’t love stories?!
And then people start to pull away from him. Your other friends avoid hanging out with him. And when you tell him it’s because he spends too much time talking about himself, Peter just scoffs. Eventually, the whole friend group moves on and he still, to this day, doesn’t understand why.
The neverending talking about himself was a huge weakness for the guy. One he technically knew but did nothing about. Even when people told him it was a problem. And eventually, because he didn’t do anything about it, all his friends moved on. Because, to put it frankly, he became annoying.
He knew the weakness. He had time to do something about it. He didn’t. And he paid the price (no friends). This sort of thing happens in business often. There’s an issue. It’s ignored. It contributes to future problems and by that time, it’s too late to do anything about it.
You don’t want your business to end up like Peter. So instead of sweeping the last year’s weaknesses and failures under the rug, you’re going to do the opposite. You’re going to put them out in the open. Then you’re going to think about what went wrong. And then figure out how to prevent this from repeating into next year.
Here are some common weaknesses in a business to think about:
- What goals did you not achieve this year?
- Were you close? Or nowhere near achieving them?
- What stood in the way of achieving it? Money/lack of support/production issues?
- What complaints do customers have about your business/product?
- Where are they saying this?
- Do they complain about this often, or more recently?
- Do they offer suggestions for the problems?
- What has been the result (customers going to the competition? Less sales? No change?)
- What was the biggest obstacle you faced this year?
- Could it have been avoided?
- Is it still a problem or is it handled?
- How or when did it first become a problem?
- Are you prepared for if it happens again?
Take extra time in this section. It only takes one bad weakness to topple over the progress you’ve made. The worst part is realizing the problem could’ve been avoided if it had been handled immediately. And in most cases, a weakness is manageable even as it’s coming to life. Unlike threats, which we’ll get into later.
You don’t want to regret not putting a stop to a weakness when you could have. And you do want this next year to be even better than the previous. That’s why you need to be meticulous during the “weaknesses” section of the SWOT analysis.
When you’re ready, let’s move onto the next section — opportunities.
The chances of business opportunities
In this section, write down every single opportunity that appeared during this last year. Whether they went anywhere or not, note it.
Opportunities are, in my opinion, chances. The chance to progress your business in new or exciting directions. In some cases, the opportunities can be manufactured (like a partnership). But in most cases, they just happen. You can decide to take the opportunity or ignore it. It’s unlikely you’ll be able to “save” the opportunity for a later date.
Opportunities can be big or small. Write down each one:
- What opportunities did you have?
- Who else (if anyone) did the opportunity involve?
- What were the results for each one?
- If there were no results, why not?
- Did you create any opportunities?
- Did you let any slip away?
- Were there consequences for this?
- What opportunities would you like to have next year?
Perhaps you’ll be able to uncover a pattern when assessing your past opportunities. Maybe you can use this to your advantage next year. That’s only possible if you do this part of the SWOT analysis thoroughly.
And now, we’ll move onto the final part of this SWOT analysis of your business. It’s time to uncover threats.
Threats and crisis avoidance
It likely goes without saying, but threats are bad. They will completely destroy a business just because they can. A threat is the advanced form of a weakness. When it was still weakness, you could stop it. Or change it. Or just get rid of it.
A threat isn’t easily disposed of. It likely won’t change. It’s like an arrow heading for the bullseye. You may be able to throw it off target. But likely, your only option now is to deal with it before it hits.
In the case of SWOT analysis, however, the point of discussing threats is to identify how it came to be. And then figure out how to handle it more effectively if it happens again. Or how to avoid the situation altogether.
Now, jot down any threats you had to manage over the last 12 months. Think about:
- What was the #1 threat you faced this year?
- Competition? Less customers? Higher expenses?
- Could the threat have been avoided?
- If not, how did you handle it?
- Could it have been handled better? How?
- What other threats could dramatically affect your business?
- Have you noticed any other issues lately?
- What are they?
- When did you first notice?
- Have they been an issue before?
This about this as an exercise in crisis control. Threats often lead to more stress, additional problems, and endless frustration. Having a plan to mitigate any and all of these issues takes… well, planning. And now is the time to be planning for any possible problems long before they become a reality.
When you’ve completed this part of the SWOT analysis. I’ve got good news for you…
Why you should do this SWOT analysis ASAP!
It’s the end of the year. You have all the information you need to do every part of this SWOT analysis thoroughly.
You’ll have documentation, invoices, tax receipts, customer data… all at your disposal. It shouldn’t just sit in a drawer until some random time when it’s needed. You should be using it for this end of the year SWOT analysis. It’s the perfect time to get a head start before the next business quarter. And once you’re done the SWOT analysis, you can finally, for real this time, relax!