Running and growing a business can be comparable to travelling by car before the invention of satellite navigation systems. Route planning your journey first, knowing which roads to take to make your journey more efficient; you could decide not to seek help and travel on experience and instinct with a hope that nothing has changed and you will know where you’re going; or you could use a traditional map to help guide you.
Developing a strategy for your business is route planning your journey ahead. It’s deciding which roads to travel before you start out or if you have already started out when you are seeking to travel in a particular direction.
To do this we need to look inside the business and determine the business’ strengths and weaknesses AND also look outside of the business to look at what our competitors are doing and also what is generally going on in the world.
There are many tools that will assist you in this process – the most widely and incorrectly used of these is SWOT (Strengths, Weaknesses, Opportunities and Threats). Too often this is used only on the business itself and does not consider the external influences. Too often this is where people’s thoughts also stop. SWOT on its own provides only a static solution – it provides the map however it provides little guidance about the best route to take for your business journey.
Let’s first then consider your businesses strengths and weaknesses. To help with this consider 4 main areas:
- Physical aspects of the business
- The space you have, the machinery you have, the technology you have? Do you have any access to rare or unique equipment
- Human
- The human skills you and your employees have – is there anything that’s particularly unique
- Financial
- What’s the financial situation of the business? Do you have capital to grow, buy additional equipment / hire staff? Are you reliant on public sector funding for growth?
- Intangible
- Consider here your contact base, your customer loyalty, customer retention, brand awareness. Aspects that might be difficult to measure.
You should then be able to create a long list of strengths and weaknesses on JUST your business. Consider then the ones that could become important to the business? The ones that are
- Valuable – particularly costly for a rival to obtain
- Imitable – particularly difficult for a rival to copy
- Rare – particularly niche or unique skills, experience, technology etc
- Organisation – ones that your organisation can easily exploit.
Hopefully you should have half a dozen or so of each. You have now populated your Strengths and Weaknesses sections of your SWOT. Please note you have not considered at all external factors and should have just focused on your business.
