Not many bestselling business books from decades past stand the test of time, but for entrepreneurs, Michael Gerber’s E-Myth is as relevant today as ever. The E-Myth is worth the 2-hour read, but allow me to share a one-sentence book review: Entrepreneurs spend too much time working “IN” the business and not enough time working “ON” the business.
In other words, whether you are an entrepreneur flying solo, leading a start-up, or a manager in a large enterprise, far too much time is devoted to the daily busy work that consumes us.
Conversely, not enough time, energy, and, most of all, thought is dedicated to the big picture view of a business and its landscape.
Enter the SWOT Analysis.
Few exercises are more directly aligned with this notion of working “ON” business and potentially more impactful to forming a well-rounded strategy than the SWOT Analysis: Strengths, Weaknesses, Opportunities, and Threats.
The SWOT has its origins in the Madmen-Esque boardrooms of 1960s corporate America but has long since been repurposed and co-opted by businesses, non-profits, and teams of every shape and size. There is an endless supply of templates and models you can find online, but quite simply, SWOT centers on identifying and listing the areas and attributes that apply to your business in each of the four dimensions.
What are the Strengths of your business…people, process, marketing, sales, market? What are the Weaknesses…communication, process, accounting, customer experience, SEO/SEM, staff, suppliers? What are the Opportunities…collaborations, acquisitions, new talent, automation, technology, products, payments? And, what are the Threats…competition, regulatory intervention, raising capital, competitors, new entrants, customer retention? This is just the smallest of samples, as a SWOT analysis is a time to channel your creativity and imagination and the size of your list bound only by the constraints of your imagination and understanding of the marketplace.
SWOT strategies for entrepreneurs
For the newly initiated and already familiar reader. Here are a few of my tested and proven suggestions that can help entrepreneurs make the most of a SWOT analysis for their business:
- Get off the grid. Make every effort to do your SWOT without any of the usual distractions of daily business. This will be challenging for many, but try to do your first draft without the use of any electronic devices…no phone, tablets, smartwatches, computers, or monitors. No group chats, no emails, no texts, no social, and definitely no notifications. Just a simple notepad and your favorite writing instrument will suffice.
- Change of Venue. The simple act of finding a space outside of where you normally conduct business to work on your SWOT can improve the quality of your thought process. Did I mention no electronics on the first pass?
- Look outside…not just Inside. Don’t just focus on an internal examination of your business but make sure to open up your mind to evaluate and include some of the external factors that might find their way into one of the S.W.O.T dimensions. Competitive landscape, your team, regulatory shifts, business interruption, cyber-attacks, and technology investments are but a few examples.
- The Real Work is in the “OT.” Many will find that filling items into the S and W quadrants come easier, but it is essential that you not lose patience if you are challenged to come up with as many ideas for the O and T. By default, these are the more inherently strategic dimensions that are often easily overlooked when you have your head down as an entrepreneur. It requires you to wear at least temporarily the hat of an objective consultant or academic as you examine subjects like the broader industry, the economy, regulatory intervention, staffing needs, or investments.
- Setting Great Expectations. Yes, a SWOT can lead to an “a-ha” moment, but it’s important that entrepreneurs have reasonable expectations, especially when first adding exercises like a SWOT analysis. Don’t be discouraged if there are no epiphanies from your first SWOT efforts. Just the simple act of investing quality time to think about and observe your business through a more strategic and academic lens has its benefits. The cumulative effect of making even little improvements leads not just to linear benefits but exponential benefits. For example, identifying even a small Weakness and then implementing a plan to address that gap can have a compounding effect. The same can be said for doing the same with untapped Strengths, Opportunities, and Threats.
After a year in which the global healthcare crisis pulled all of us inward, perhaps nothing may be more important to your success over the next 12-18 months than committing to work “ON” your enterprise, beginning with a SWOT analysis.
Ultimately, the true benefits of investing your time in SWOT exercises will help you to recognize important insights into your business in real-time and not just during the analysis itself. Indeed, “what’s past is prologue,” as there has never been a better time for entrepreneurs to revisit the SWOT analysis.