Are you good at planning and telling others what your strengths and weaknesses are?
Have you sat down and worked out how your small business is going to work and made a plan for yourself? Ever heard of a SWOT analysis? This is how it could help you.
No it’s not about someone who was really clever and nerdy at school. This SWOT is an acronym which stands for Strengths, Weaknesses, Opportunities and Threats. Basically, it is a model which is used as a tool for analysing all the above elements before you set off on a new venture. It’s used in education as a method for identifying development areas, in project management and lots of environments and can be easily adapted to any decision-making situation.
It is a way of taking a business objective and identifying the internal and external factors which are likely pose an opportunity or a threat to your business and it was first used in the 1960s. You can take the SWOT analysis even further and use the match or convert process where you look in more detail at how strengths and opportunities can be linked and also at how weaknesses and threats can be converted.
OK so as a beginners’ guide, take a piece of paper and draw a cross or plus sign through the middle (+). You now have four segments on your piece of paper. Write S in one of the segments, W in another and so on. Once the artistic bit is done, now you can actually start to fill the segments with something meaningful.
The S and the W speak for themselves so write down all the things that you think are your business’s strengths and weaknesses. Now look at the threats and opportunities. S and O are likely to derive from internal situations and W and T are more likely to come from external forces. If your SWOT analysis then tells you that your business venture or objective is not going to work, you need to find another idea and repeat the whole process. If you can’t minimise the threats and overturn the weaknesses, meaning that they outweigh the strengths and opportunities, then it is advisable not to go ahead.
Essentially, what you are doing is assessing a business situation and planning ahead. Marketers use it all the time, or other methods which are similar. You can use the analysis as a foundation on which to build further and it can be used to assess competitive advantages and so on. It should form the first part of the planning process for any start-up or small business.
So what are you waiting for? You want to set up your own business and you can do it just like anyone else. Don’t forget that it is worth concentrating on weaknesses and threats because they can be overturned and converted into great selling points. Don’t overlook them or you may miss out on an opportunity in reverse.
Your competition is every other business that might share the same customers as you. Huh? If you are a plumber, then what kind of competition is the local bank? How can you say that the local bus system is competition to a computer repair shop?
When you talk to most business people, they will answer this question with the names of other companies they consider their major competitors.
The CEO of a small bank may say their competition is another small bank just down the street, the check-cashing shop on the corner, or the major national bank that is getting ready to open a new branch down town.
A grocery store owner may consider the competition to be another large grocery chain, the local quick shop, or even the farmer’s market. But the answer is much simpler, and yet much more complex than this.
Who is your competition? Your competition is every other business that might share the same customers as you. Huh? If you are a plumber, then what kind of competition is the local bank? How can you say that the local bus system is competition to a computer repair shop?
The reality is that every other business that your potential client base comes into contact with is your competition. In other words, everyone is your competition.
Modern technology has turned us into a service society. As products now compete around the world, and the exact same product can be obtained through a variety of vendors, we now start looking towards the intangibles when we decide with whom we want to do business. Whereas a couple of decades ago, we would compare the quality of a product to similar but competing products, the quality of products today, and their specifications, are so similar that we no longer make major decisions based solely upon the perceived quality of an item. Those intangibles have become critical criteria in our selection process.
One of the most important and most overlooked intangibles in the business world is the value of providing great customer service. However, what is great customer service? Nearly every business has a department named “customer service”, but how can you distinguish between good service and great service?
The simple answer is that good customer service is when you have an individual service representative that listens to the customer and helps to set the problem straight. Great customer service is when any member of your business is capable of doing the same thing. Customers who call when they have a problem are happy when they get a problem fixed. But when your entire team of people works together to make a customer satisfied, the customer knows that your company is one that stands behind its products and will do what it takes to keep them happy.
It all boils down to the reality that satisfied customers may or may not decide to buy your products again. Happy customers cannot even consider the possibility of going somewhere else. Great customer service will set you apart from the competition.