Identifying areas for growth for SMEs

Taking an objective look at your business and the position you’re in right now can be extremely helpful when trying to identify how you can grow. But it’s sometimes difficult to take a step back from something you’ve built from the ground up — that’s where a clear strategy is vital.

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Conducting a SWOT analysis (strengths, weaknesses, opportunities and threats) is a simple and helpful way to clarify your growth goals. It allows you to consider all the factors that are currently affecting your business as well as those that could potentially impact you once you start your growth phase.

Chris Rhodes is a partner at performance improvement specialists Accelerus, a consultancy firm that helps business leaders achieve more. We asked him for his key tips around growing your business SMEs for this guide.

Conducting a SWOT analysis

It’s useful to first determine the purpose of your analysis before working your way through the four stages – strengths, weaknesses, opportunities and threats.

Before you kick off your SWOT analysis, make sure you have a mission statement – one clear objective that will guide your analysis. Once you’ve established what you want to achieve, you can start working through the four elements of the analysis.

1. Identify the strengths

Your strengths are what separate you from your competition and deliver value for your customers – the things you’re doing better than anyone else. Your strengths can be anything from a highly skilled workforce or a unique product, to a great HR team and strong senior management. Think about your core skills, where you make money from and the things you have plenty of experience in.

Although you may be conducting your SWOT analysis with the intention of improving your business, be sure to take time to fully identify all the strengths of your business. For example, you could have a truly unique product, you may have found a new use for a common product, or perhaps your team culture is very effective. Knowing what sets you apart will inform what areas you should focus on.

2. Identify the weaknesses

Where are you underperforming? What do you struggle with? These factors may have limited your growth so far and they’re areas in which you’d like to improve. Think about areas where you’re losing money or are under resourced.

Chris contextualised common weak points for SMEs:

“Very often businesses have been constrained due to inadequate resources or inappropriate financial instruments, a lack of vision and strategy and don’t have the necessary leadership skills.”

It’s important not to dwell on the weaknesses, but instead use them as a platform to think of ways to improve. Every business has to go through the stage you’re at now. Your current achievements are a fantastic platform from which to design and execute the next stage of your business strategy. You may just need a fresh pair of eyes or a new vantage point. However, it’s useful to group the weaknesses you identify so you can prioritise which areas to focus on first, or source some expert help to attack any specific areas of need.

3. Scout out your opportunities

After identifying the strengths and weaknesses of your business it’s now time to look outward, to work out where the opportunities lie. Opportunities are anything in the external business environment that could help you to grow your company and maximise success.

There are some common areas of opportunity that may be a useful starting point for business owners who aren’t sure where to start looking. “Growth opportunities often occur if a business has a good product or service, but has been undercapitalised and hasn’t had the right opportunity to expand within its chosen market”. Scrutinise your market and think about underdeveloped areas. Could you partner with a relevant business for referrals for example?

4. Be aware of the threats

The final stage of your SWOT is to recognise any threats. It’s vital you’re aware of these as they have the potential to hinder your growth moving forward. Incorporate them into your overall strategy with a clear plan of action for how you can overcome or minimise them. “Cash constraints are often caused by rapid growth, poorly planned and executed” Chris warns, so while aggressive expansion might seem attractive, think about developing a careful and considered growth plan.

Once complete, the results of your SWOT analysis will make a great foundation for creating a business growth plan. If the areas Chris has highlighted ring true for your business, think about what steps you can take to remedy the issues. It could be that you need additional funding, outside help to close the skills gap at a leadership level, or a deeper look at your product. Are there unexplored areas in the market that your product could fill?

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