Do your SWOT Analysis

We often get to read and hear insights about the Do's and the Dont's for running a successful business. And we try to blend those ideas into our business as a part of our efforts towards continuous improvement and enhancement of our business. It's good that we try to expand and be better, but we often miss the preliminary step – analyzing ourselves.

When you send your kid for tuition or for activity classes like dance or painting, you analyze your kid's skills and then take the decision to send him for a class. If you see he is weak in a Maths, you send him for Math tuitions, if you see he has a flair for dancing, you send him for dance classes to polish his skills. The idea always is to identify the skills or strengths and then build on it.

Similarly, there is a technique which can help you analyze your business' skills and then decide where exactly you need to work. It is called SWOT Analysis. SWOT analysis is about understanding the four important elements of your business, namely, your internal Strengths and Weaknesses and external Opportunities and Threats. A SWOT analysis is nothing but a study undertaken to identify these aspects of your business which can then help you build the right strategic plans to address each of these aspects. You may see it as a structured planning method for your business which can help you know where exactly you stand and that plans you need to take to reach your goals. This technique is a very commonly practiced by corporates and this article concentrates on how can the concept be extended to a financial advisor.

We will now explore each of these four aspects of our business and will throw light on the questions we shall ask ourselves while exploring each of them...

STRENGTHS:

This section will focus on your strong points.

• What do you think you are good at?
• Find out what others think you are good at?
• How are you positioned better than your peers? Any particular advantage you enjoy over others?
• What is your USP?

List down all your strengths here. I have a large product basket, so I am like a one stop solution provider or I have got good interpersonal skills or I have a rich experience of 10 years, so I have all the knowledge of the industry, and the like. Think and pen down all your strengths here, this section will be a confidence booster.

WEAKNESSES:

Next comes identification of your weaknesses.

• What are your weak characteristics as an individual? You may be weak in communication or you may not be comfortable with technology, etc.
• Do you have the required business vision and strategy?
• Do you have important skills needed for advisory like excel, presentation, marketing, sales, etc.?
• Do you have the required infrastructure and right people with you?
• Also step into the client's shoes to identify your weaknesses. If you were your client, then what are the things that may put you off from you.

List down all your weaknesses here.

OPPORTUNITIES:

Divide the opportunities between the present opportunities, i.e. the ones which are there, which can stimulate your business but you haven't used them yet and the future opportunities, i.e. the factors which will contribute to your business in the future.

• What are the up-selling & cross-selling opportunities in my existing customers?
• Are we asking and getting referrals from existing clients?
• Will getting Certification Courses help in building the business?
• Can I activate clients who are not very active in business?
• What new products and services can I add to my basket to increase wallet share of the customer?

There will be many more, which you need to spot. Identify the opportunities which are there but you haven't explored properly. The idea is to list out opportunities available to you.

THREATS:

Lastly, you have to collect all the warning placards and put them here.

• The existing and probable competitors in your area / city which may pose a threat to your clientèle.
• New business models and technology which offers competition to your business.
• Possible change in regulations that can have an adverse impact on your business.
• Over concentration of business on select few large clients.
• Having limited products / services in your basket.

The idea here too is list out all the threats.

Strategy:

So, take out some time on a weekend, sit in your garden or your balcony, think with an open mind, and put down everything on a piece of paper. This exercise will need a few hours of commitment and brainstorming because you have to look at things which are not explicit. But once you are through with this exercise, you'll a get a lot of clarity about your business and about yourself.

After doing the SWOT analysis exercise, the next step it to devise a strategy to manage your business accordingly. The strategy can be implemented through action plans which can be further broken up into

• short term or immediate plans

• medium term plans of say over 6 months to 1 / 2 years

• long term plans of over 1 / 2 years

The contents of your strategic plan to address each of the four components of a SWOT analysis can be as follows:

Strengths: How to build on your strengths such that you are known for it and it helps you distinguish yourself / your business from the competition. The idea is to capitalise on your strengths to gain the maximum advantage.

Weaknesses: How to either build on your weaknesses or nullify it's negative impact on your business? The idea is to prioritise things which are important for your success and then work on it. If there are things which cannot be worked upon and are not critical to success, you may think of alternative ways to address those weaknesses smartly without allowing them impact your success.

Opportunities: The idea is to explore all possible opportunities and have plans to exploit them using your strengths. Chose the opportunities that have the maximum potential and/or are the easiest to crack to get going in your business. Your medium to long term plans should include action plans for future business opportunities.

Threats: The idea is to have an action plan to counter the existing and potential threats to your business. This may be required to diversify your business, get more services on board, diversify your clientèle, move clients to online platform and so on. Like for opportunities, all your plans should include action plans for future business threats.

Conclusion:

All of us may have done some thinking on our business and its' future direction. SWOT analysis is nothing but just a framework for you to think appropriately. The principles of SWOT analysis can be applied to smaller areas or different product categories, etc., so as to be more detailed. With growing dynamism in the industry, it is high time we also regularly introspect our business and its' environment. Our success in future, regardless of our success in past, will depend on how effective we can manage our internal strengths and weaknesses, exploit the external opportunities and address the threats to our business.

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