A SWOT analysis is a good starting point for someone who is charged with creating new business opportunities for a small to midsize advertising agency, PR firm or digital shop.
Part of Steve Jobs’ 12 Rules of Success: Perform SWOT analysis. As soon as you join/start a company, make a list of strengths and weaknesses of yourself and your company on a piece of paper.
This strategic planning method, when used properly, can be a valuable tool for making decisions, setting strategy, and evaluating courses of action. You should use it as an initial step for defining your agency’s new business objectives. It is a helpful tool for reviewing your agency’s current focus and positioning.
SWOT is an acronym for Strengths, Weaknesses, Opportunities and Threats. Strengths and weaknesses are internal factors. Opportunities and threats are external factors. Internal factors are ones that you have control over. External factors are ones you don’t have much control over.
- Strengths: internal characteristics of the agency that gives it an advantage over the competition. What does your agency do well? What resources are available? List your agency’s attributes: people, expertise, credentials, etc.
- Weaknesses: internal limitations that are a liability and create a disadvantage relative to the competitor. They are things that detract an agency from its ability to obtain new business. It could be a lack of expertise or resources, location, positioning, training, etc.
- Opportunities: the external competitive advantages that are helpful to you achieving your new business objectives.
- Threats: external factors that are potential threats to your agency’s new business. These are challenges that are created by an unfavorable trend or development that may lead to deteriorating revenues or profits. Proactively plan for and respond to them.
Ask yourself the following questions from a new business perspective:
- How can we leverage our strengths?
- How can we improve upon our weaknesses?
- How we can capitalize on our opportunities?
- How can we minimize our threats?
The true value of the SWOT analysis is in bringing this information together, to assess the most promising opportunities, and the most crucial issues.
Before you begin, review the following 3 steps and keep them in mind to avoid the danger of it becoming a meaningless exercise.
Step 1 – Collect the Information
Conducting a SWOT exercise for your agency is a straight forward exercise. Begin the SWOT analysis by conducting an inventory of internal strengths and weaknesses within your agency. This shouldn’t be only one person’s perspective. You will need to include others in this process. Plan to interview your agency’s key executives and possibly your entire staff. Use open-ended questions built around these four areas. Keep your SWOT short and simple with a bullet point list. The analysis should become an executive summary.
Step 2 – Prepare a Plan of Action
Unbelievably, 62% of agencies don’t have a planned new business effort.
You should review your SWOT summary with a view of creating a plan that addresses each of the four areas. It serves as a basis for the development of a new business plan that will be your guide for implementing a successful new business program.
The SWOT analysis will act as a filter for lots of information and will allow you to better interpret and identify the primary keys for your new business plan.
Follow the KISS (keep-it-simple-stupid) method. Keep everything as simple as possible including the plan. A one page plan will easily suffice.
Step 3 – Benchmarks for Measurement
Set goals that are realistically achievable within the culture and resources of the agency.
There is a lot of truth to the old cliché, “If you can’t measure it, you can’t improve it.” Conducting a SWOT analysis will allow you to know what agency data needs to be collected to use as a benchmark for key objectives for the future.
The SWOT exercise will provide a clearer direction for new business and will allow you to easily set new business goals that stretch your agency while being realistically attainable.
For instance, a lot of agencies will say, “we want to double the size of our agency over the next year.” Your SWOT analysis provides the kind of information that helps determine if that goal is attainable. It may be more realistic to state the objective as: “We want to increase the agency’s new business by 25% over the next three years.”
You want to set goals that are realistic given the agency’s strengths, weaknesses, opportunities and threats.
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