SWOT – Strengths, Weaknesses, Opportunities, Threats

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SWOT – Free template

SWOT Template

Strengths, Weaknesses, Opportunites and Threats

Strengths

Sometimes people refer to a business as an organization.  Organized business is a healthy business.  People make a business.  Without people, there is no business.  The people on hand are a strength, the people needed are a weakness. The business elements in hand are the strengths.  Tangible assets like machines, office equipment, and inventory are a component of strength.  Intellectual Property and the plan for using it are also part of the strength of the company. Cash and financial strength count.  Add up everything including marketing, advertising, sales, web, and manufacturing capability.  Be thorough. The strengths carry the business.

Weaknesses

Unfortunately, weaknesses are not as easy to perceive as strengths.  Fundamental errors can carry on and crush a business at an alarming speed.  The easy weaknesses to list include not enough sales, money, projects delayed, and other missed metrics.  But – what needs to change or iterate before the business runs into a weak position?  The good kind of self-criticism and accountability comes into play.  Various heads find their own and company weaknesses and put them down for corrective action.  Brave work to find the missing or weak business elements

Opportunities

The venture inventor invented to meet a need or niche in the market.  The opportunity is to fill the need or niche.  There is more.  To hone in on the opportunity the Voice of the Customer work, the market segmentation, and the value of the opportunity is known.  Is this a “family” product?  What are the adjacencies?  New applications for the invention?  Correctly understanding the opportunity drives the expectations for the bottom line.

Threats

Threats speak to, why not?  Too much competition? Not manufacturable? Founders arguing?  Cash low? Market segment too small?  Invention incomplete?

Summary

The SWOT analysis was invented by a management consultant named Albert Humphrey in the 1960’s. It has stood the test of fierce business and time.  Understanding the strengths, weaknesses, opportunities and threats in a company is fundamental to knowing how to manage the business.

Categories: Planning, Tools

An argument for Business Planning

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Strategyzer created the Business Model Canvas.  It is a practical one-page overview of the business model.   For some, the business model canvas might suit the need.  It is important to think through the enterprise.  A few get into “paralysis by analysis”, but most charge ahead.

Charging ahead is not always leadership.  Sometimes charging ahead is hubris.  Common mistakes made by those without business plans:

1) Acting too few, or one data point.  A customer purchases a widget.  Venture Inventor heuristically assumes that the widget is the next big thing and commits a lot of resources. The one customer was an individual purchaser, a fluke. People lose their jobs.

2) Ignoring a vital corner of the business.  The inventor purchased a one year plan on a domain, missed the renewal date, and the inactive domain held hostage for thousands of dollars.

3) Over 75% of the business comes from one customer.  The customer went bankrupt.  The inventor went bankrupt too.

4) Sale closed. The customer uses the equipment.  Equipment causes a loss due to a product malfunction.  Product liability insurance was not structured properly.  Inventor went bankrupt.

The business plan looks at all aspects of the company and determines who, what, when, where and how.  The business plan is the action plan for the enterprise.  Operating without one is like driving to an unknown destination without a map.

 

 

Categories: Planning