SWOT stands for Strengths, Weaknesses, Opportunities and Threats.
SWOT analysis is a technique business managers should use. We've mentioned elsewhere the various pitfalls people fall into. Many people focus on what they know and tend to ignore the rest. In a large business, most jobs tend to be fairly narrow in their focus, and the slack is someone else's job.
We're sorry to say that this doesn't work in smaller businesses. The chances are if you neglect an area, no-one else will pick it up and run with it. And as one person (or perhaps part of a very small team), you will not have all the skills required to manage every facet of the business. That's actually fine. You may not know much about my specialist area - accounting. You can employ any one of many people to help out there - it's a question of finding the right ones for you and your business.
But you can't completely ignore finance and expect not to have nasty things happen from time to time. The same applies to marketing - and people - and systems - and products. And then, of course, there's the business itself - the vision, strategy, structure and culture.
So management is a bit like juggling. You've got to keep all these balls in the air at once. You may make life simpler in the short term by reducing the number of balls in the air - but sooner or later you will pay the price.
And that's why SWOT analysis is such a powerful tool. It can let you see which areas are most in need of some action. It may not teach you the skills needed to solve particular issues - but it does highlight the issues. Getting the problem identified and defined is the first step towards solving it. You may then tackle it yourself. You may give it to an outsider to tackle. Or you may employ a staff member. There are always options - but to manage properly, you need to know what the issues are facing your business.
Some managers know (or think they know) exactly where they need help - and we can work on that if they want. However, we have found that a proper SWOT analysis can help us to focus on important areas first. Clients enjoy getting big wins early on - and often learn unexpected truths as well.
A basic SWOT analysis is free. The fuller version generally takes two hours or more just to answer questions. Then we analyse of the results, and together choose the items (we usually suggest a top ten list) to be tackled. This costs $500 (plus GST) so is not for the faint-hearted.
We suggest everyone uses the free version first. If that doesn't achieve anything, there could be several reasons. Maybe your business is already perfect - at least in the basic options here. Or maybe you've not seen it with fresh eyes. Perhaps you've not been successful at implementing the changes identified. Or maybe you didn't have an adequate monitoring system to measure the effect of the changes.