If you are like many business owners you have watched as your business “misbehaved” during the current economic downturn.  If you are tired of the results you are getting then maybe it is time to SWOT your business bottom line!!!

Of course I am talking about a SWOT analysis.

When faced with a business or a business unit that is under performing it can be very helpful to go to back to the basics. By analyzing Strengths, Weaknesses, Opportunities and Threats a business owner or manager can assess areas that need improvement, areas they may want to focus on and how environmental factors may impact performance.  The SWOT analysis begins by taking stock of internal and external factors.   If we look at each component separately we see how each is used in the analysis. As that song from the 1940’s tells us, “ you’ve got to accentuate the positive, eliminate the negative, latch on to the affirmative and don’t mess with Mister In-Between”

Strengths (internal) – if you have never gone through the process of doing a SWOT analysis it can be quite eye-opening. If you have performed a SWOT analysis don’t be so quick to assume that what were once strengths are no longer providing you a competitive edge.  What are the areas that we are better than the competition?  Can we take advantage of those areas to greater extent than we have previously?  Don’t assume that you will have a competitive edge in the future just because you have one today (or had one yesterday). You need only look to the mobile phone market over the last few years to realize how fast a market can change.

Weaknesses (internal) – this is, in my experience, the area that most people struggle with when doing a SWOT analysis.  We don’t want anyone else calling our baby ugly and we sure don’t want to do it ourselves. However, this is the area that has the most potential for getting managers and owners on the same page with regard to viewing business performance.  Managers often disagree as to the reasons why a business isn’t performing better with regard to market share.  A sales manager may assume that it is because of product mix or service issues, for the production manager it may be facilities or lack of order lead time. One thing is for sure, this can be the most spirited discussion in the process.

Opportunities (external) – Ok, I admit it. It is hard to look at opportunities when your business is struggling, the economy is a shambles and frankly you just don’t have any cash. But, this is exactly the time to look at opportunities.  You may find: New vendors, Competitors leaving the market and opening new markets for your products, strategic partnerships that can add more to your bottom line.  Not everything requires additional resources. Sometimes it is a matter of reallocating the resources that you have.  There are opportunities out there. Don’t stick your head in your sandbox;  go find someone else’s sandbox to play in.

Threats (external) – let’s face it. You only have to pick up the paper to know that business, particularly small business, is under attack on a great many fronts.  If you read the paper, watch TV, or browse the web you can’t help but have the opinion that the business, economic, and political landscapes are a shambles.  Oh, and let us not forget your competitors who, in the face of declining revenue and profits are on the attack. Your competitors are looking to get into your sandbox. Do you know who they are? Are you actively reaching out to all of your customers? What are the threats to your business? Do you know or do you think you know?

 Whether you use SWOT in a very structured manner or attack it in a “brainstorming” session it may just help look at your business in a different way. However, as with any tool, SWOT should be used with caution.  Misuse can have an adverse effect on your business. But, if you are concerned about the behavior of your business, maybe it is time to give your bottom(line) a little SWOT