SWOT-to-unlock-your-brand

Use SWOT to Unlock Your Why Before Your Customer Will Buy

Run a SWOT to unlock your brand promise and build better customer relationships

When you are planning how to reach out to the marketplace, there are some newer marketing theories that can be the key to building meaningful relationships with your customers. Yes, I said marketing theories. These are the rare theories that can be tested and put into practice immediately. For me, the most impactful of these was shared by Simon Sinek during a Ted Talk. He said: “Your consumers don’t buy what you do –they buy why you do it.”

This amazing quote came to my attention through a really cool blog by Michael Brenner. In it, he offers several insights about how to plan to reach your customers—to deliver your company’s core belief to them rather than just your product or service. He tells us brands are three times more successful when they promote their raison d’etre – and how to personalize your marketing efforts to potentials using your “brand purpose.”

How would I do it? I would use CBM’s SWOT analysis tool to identify my company’s Strengths Weaknesses Opportunities and Threats. After delineating these, I’d look for ways to deliver them to my audiences. Start a conversation. Build a relationship. Let me break it down:

  • Worth it to My Reader My core belief for my communications company is—everyone needs to hear my story (content) because I don’t waste their time with stuff they don’t want to hear. Whether it’s a technological white paper on manufacturing IT or a media pitch for a pair of cool headphones, I have done my research. I know who I am talking to. My strength, then, is making sure my content is targeted and meaty enough for the people I get it in front of- so that it won’t waste their time. That’s the S in my SWOT.
  • Too Cute By Far My weakness is my ability to write fun, fearless copy. Yup—I often refuse to make it dull or clog it up with business speak to please a review board at a client company. In all fairness and in their defense, they are in the serious business of selling their products or services through the content I write. The problem with that is this: Sometimes, their audience expects the material to be cut-and-dry, with dry being the operative word. I learned that not everyone has to be amused while swallowing good, important information. I got myself a good editor at an hourly rate and told her about this issue of mine—we even have a code-edit for when she spots me being too “cute” for certain clients. That tells me to tone down a phrase and make it more business-like for my serious clients. I can usually edit myself with these kinds of clients because I am an excellent writer—and I still don’t bore people because I use juicy verbs and shun the passive voice. Weakness transformed!
  • Opportunity, Don’t Knock It The opportunities in the way I present my core belief—you need this, you should read this, you’ll be happy you did — have given me an edge in certain kinds of content—blogging is one and social media is another. My colorful use of language shows my clients that I can excel in these arenas—even business-to-business blogs and social networks are people-to-people, aren’t they? If I continue to sell my blogging and network posts and broaden my reach to new prospects, I can realize a great jump in profits—people need lots of blogs and tweets/shares these days — they’re among the most in-demand content I write.
  • Why Am I Not Scared? The Threat to my r’aison d’etre? The economic realities that my clients face as small businesses serving medium-to-large companies. Their marketing officers are suffering from “next big thing” fatigue—they are expected to jump on every social media or newest flavor of content bandwagon and then show an ROI on these untested tactics. The threat to my core belief—you need this, you should read this—is that it doesn’t get to the person who’s ready to hear it—or they can’t find it—or the company that hired me to write it doesn’t know where to put it. Or worse—we can’t prove that it worked. This threat is met square on by me—by being up-to-date on cost-effective content strategies and educating my clients on these. By becoming an ROI-KPI detective about these approaches to ensure that they can explain them to their bosses. And by really, truly knowing their customer wants and needs before I put one finger on the keyboard. See, that wasn’t so scary.

You can probably see yourself in some of my strengths, weaknesses, opportunities and threats. Run a SWOT on the why of what you do before you sell your what. It’s key to building a lasting relationship with your customers.

The Dangers of Premature Funding – Why You Should Think Twice Before Taking the Money

As you can read on this site, many of our smart bloggers preach the doctrine of lean start-up. Steve Blank wrote a great article on this subject for Harvard Business Review titled Why the Lean Start-Up Changes Everything. The article points out that 75 percent of startups fail, regardless of how much time, effort and funding are involved. The lean approach, the way Blank teaches it, is to test fast, fail fast and learn whatever lessons are necessary to get you to the next level. And this can often be done with far less money than you think.

I’ve been involved with a number of startups ranging from the pure bootstrap -where my partners and I were camped in borrowed office space, sitting on chairs we brought from home – to the VC funded model, where we launched with tens of millions of dollars of other people’s money (OPM). And while the outside money was comforting, it always comes with a price. Other people will have a say in how you run your company and sometimes, in whether you even get to run your own company.

Based on these experiences, as well as what I have learned from my clients and entrepreneur friends, my recommendation is to take the least amount of money possible in the early stages of your venture, for these reasons:

  1. You will spend your own money wisely. Ventures that get big infusions of cash often spend the money in ways that do not advance the needs of the business. A recent example of this is the spectacular failure of the Israeli electric car company Better Place, which took in almost $1 Billion in funding but crashed in a big way. By contrast, if it is your money, you tend to monitor every penny and make sure all expenses are productive and necessary.
  2. You won’t change your business model too often. I’ve been in a situation where a large investor forced us to change our business model instead of staying a course that I believe would have been ultimately successful. Money often comes with some loss of control and this can be a trade-off you later regret. On the flip side, there are investors who add a great deal of non-monetary support so you need to take the cost vs. benefits into account.
  3. You will set habits that serve you well as you grow. By starting frugally, you will develop a pattern of maximizing every dollar. This will help you tremendously whether or not you take funding from outside sources in the future.
  4. When you do ask for money, your valuation will be higher. This is the same principle of how the people who least need a loan from the bank are able to get the money on the best terms and interest rate. We saw this with one of our ventures where the company gave up half its equity in return for a couple hundred thousand in angel funding. The company was ultimately very successful – and while the principals could have self-funded – because they chose not to do so, their share of the upside and control were severely diminished.

For another great perspective on the “lean” model, read the article from Fast Company titled How we founded a startup with Only $600 – and why we wouldn’t do it any other way.” The author, Anna Redmond, talks about how the average startup raises $200-$300K and yet, many of these supposedly well-funded startups don’t make it. In fact, only 30 percent of startups are fully bootstrapped, where the founder supplies all the funding. A good portion of these startups not only survive, but end up accepting outside capital not for survival, but for business acceleration. And as I pointed out above, when you take money in this type of scenario, the valuation and business terms are much better for the founders.

no-march-madness

No March Madness: Keeping Your 2015 Goals on Track

Experts agree—if you start doing something new, it takes at least 21 days for it to become a real habit. So by now, your 2015 business plans are showing you that they either they work or they don’t—whether they should become a habit or be tossed aside.

Whether it’s taking more time to network or figuring out how to gain market share with new or existing customers—every business owner should take the time to reflect, react and reaffirm what your business goals are each and every year. By March of that each new year, you have almost finished the first quarter. Are you incorporating workable changes into your business life? Or is trying to make change making you feel a bit of the “March Madness”?

Where to Look First

A recent article in Forbes posed three great questions to help you start to make new resolutions and refine your business goals:

  • Where do you want to be in 1 year, 3 years, 5 years?
  • With these goals in mind, what will be different for your company? What’s the end-goal?
  • What type of investment can you make in your goals, in regards to time, effort, energy, money? The key question: Is each goal doable?

The same article cited activities such as enhancing your business networking opportunities, recruiting, presenting as a thought leader in your industry, and others.

No March Madness

For me, if I spread myself too thin and try to make too many changes at once, I start feeling a little crazy. There is, after all, work to be done to make sure my current clients are well and happy (and getting their work accomplished in time!).

2015-business-goalsThis year will be about enhancing my entrepreneurial efforts through target market identification and changing my company’s sales model to include new, high-value customers I have not had the time to address. I have scheduled my time to include behaving as a “new business officer” in these environments—and written it all down using the classic goal-setting template—SMART= Specific, Measureable, Attainable, Realistic, Time-Sensitive. I’ve also committed to using The Center for Business Modeling SWOT template to ensure that my activities are aligned with my company’s Strengths, Weaknesses, Opportunities and Threats.

The other things I like to focus on are the three items in the above graphic:    Customers, Investors and Employees. I like to run a SWOT on these three areas, as well. Using the CBM template, I examine where my Strengths, Weaknesses, Opportunities and Threats are in each of these areas.

Challenging Churn

I find many business owners worry a lot about customer churn—but not enough about employee churn. The people who work with me on my client accounts are probably the single most important resource I have—they “fill in the blanks” when a client wants to work with me (they love me!!) but I might not have the skills for a particular project. Recently, I had to hire a business analyst to ensure my client and I had a solid ROI on our focus groups projects.

If you want to make sure that by the end of this quarter, you’re experiencing solid results, let me suggest that you spend some time looking at ways to keep your employees (or contractors) happy. You’ll protect a lot more than your employees—you’ll ensure brand value for your company for years to come.

short-term-business-planning-failure

Why Short-Term Business Planning Failure Leads to Long-Term Success

Using iterative business planning to make sure you have the ability to fail, then succeed.

When I put the term, “business planning” into my Google news search this morning, I was surprised at what I got. Several chambers of commerce were offering tens of thousands of dollars in prizes for new business plans in regional competitions. Others offered workshops. There also were a few choices along the lines of, “Why do you need a business plan? Here’s why!” and several books advertised by Entrepreneur magazine’s publishing group and others.

I think we all agree: You need something in the way of a business plan – but I’m wondering if all of these search results will really help a new entrepreneur decide what.

Expert advice

I have written business plans for my own businesses, for clients and during an executive MBA course. The hours of research I put in left me more confused than ever—and of course, there are always “flavor of the month” directives issuing out of one world-famous management school or the other.

However, one of the most helpful things I learned was just last week. I had a conversation with a man I greatly respect. He teaches in business school, volunteers at SCORE to help small business owners succeed, and possesses just a really insightful business mind. He’s also an “angel investor” so those of you who are looking for financing should perk up your ears. Here are two of the most impactful things he told me that I will incorporate into my next business plan:

It’s in the pudding: Show proof that you’ve actually worked in the marketplace  –Your business plan should show that you’ve come up hard against some real-life business problems when starting your business—and that you have learned how to correct, adjust, and correct some more until you see solid results.

The art of the canvas: Make sure that your plan is flexible—The word my expert used more often than any other is “iterative.” Just last week, I read a blog by Hannah Burmeister that discusses the Business Model Canvas that was originally developed by Alexander Osterwalder in 2008. This template, says Burmeister, is “visually designed to help you develop an actionable business model, focusing on nine different segments. This document gives you the opportunity to determine your:

  • Key partners
  • Key activities
  • Key resources
  • Value propositions
  • Customer relationships
  • Customer segments
  • Channels
  • Cost structure
  • Revenue streams

Keep failing to succeed

Burmeister talks about “actionable” but I would like to add that taking just one action in each of these segments won’t cut it. Any business plan you build must allow you to change course midstream. My angel investor/advisor says that you must, “test-fail-test-succeed” using the steps plotted out by the original plan, but to never stop there. An iterative business plan using the nine different segments of Osterwalder’s canvas is great—but if it’s engraved in stone, he says, it’s not for you.

business planning frameworkYou can take the best of Osterwalder’s philosophy—his emphasis on simplification and visualization—and go even farther using the CBM Business Planning Framework. You can ensure your business plan can move with you to match the speed of your marketplace. It will help you cover all of the Canvas’s main subjects, but will also allow you the flexibility you need to revisit each and adjust to new challenges. I want to thank my expert (and Hannah) for clearing up what started as a confusing Google search today: When I rewrite my business plan, it will be iterative and action-oriented.

iterative business plan model

Three Imperatives to Excite Investors about Your Start-Up

In a recent article from Entrepreneur.com (January 23, 2015) Martin Zwilling tells potential business owners that, “To Investors, Start Ups Without Business Plans Are Expensive Hobbies.” He goes on to say that you can’t just “sketch your million-dollar idea on the back of a napkin” and expect investors to open their wallets. Finally, he counsels that: “Most good ones I see are in the range of 25 pages.” However, my perspective is different.

I believe what Zwilling telling us is this: Get a cogent plan together before you try to drum-up financing for your start-up. But there is no reason this plan has to be 25 pages or longer. It only has to prove that you know how to react to customer demand – both now and in the future.

One of the best ways to accomplish this is to use CBM’s one-page Business Planning Framework to help you quickly validate your customer demand. You should run some initial tests to prove or disprove your assumptions, then change your strategies and tactics so that you are fulfilling what customers actually need – and most importantly – what they will pay for. Showing investors this type of flexibility before they give you money—proving to them that you can test, fail, re-test and then scale – goes a long way to making them invest . Following are my top three ways that this plan – when it focuses on customer demand — will pique investor interest when others fail:

Numbers Tell the Story

Look at the CBM template and identify where you need to inject the power of numbers. What’s awesome about the iterative business plan model you are working with is that you will have sales numbers that show you have already reacted to suboptimal numbers and adjusted mid-flight – to make these numbers grow. Any smart investor will react positively to this type of professional business planning and execution.

Customer First

If you will notice, the majority of the steps in the CBM model have to do with customer or marketplace. That doesn’t mean that the other elements aren’t important — it just means that you are forced to continually think about the single, most powerful engine that will drive your business’s success – customer demand. As you begin to adjust the other “tiles” in this plan — make sure you keep in mind the ramifications on the customer-centric tiles from the changes you’ve made.

Fear of Failure?

There is no such thing as failure when using this type of business planning process. If something goes wrong, you can stay flexible, learn, change — and try other options until you succeed. If you have a phone-book-sized business plan, it might be difficult to even identify where you went wrong. This one-pager focuses your activities much faster — and allows you to see where the customer – not some dusty old plan — is mandating that you change.

Think of it this way – the business plan built from the iterative and flexible process will be a working, living document that shows investors you’re already ”in the fray” and working to make your business work. You haven’t spent six-months researching what your customer needs — you’ve used this iterative plan to actually find out. You are also armed and dangerous to your competitors because you have experience with meeting (or not meeting) customer needs in the markets you serve and are acting based on facts, rather than assumptions. This approach is worth a lot — to investors and to your business.

business planning framework

Ditch the Bulky Business Plan and Get to Market Already

I’m a full-time entrepreneur, but also teach several courses for the SBA, including business planning. My students are probably surprised when I tell them that I prefer that they spend only a small amount of time writing their business plan. Of course they are surprised, especially if another instructor told them all about the virtues of completing a masterpiece of a business plan in order to attract investors and make sure their business had a good chance of success.

Steve Blank, founder of E.piphany and a pioneer in the lean startup movement, obviously agrees with me. He recently stated, “I’d be embarrassed if I was on a faculty teaching ‘How to Write a Business Plan for New Ventures’ … Business plan classes and business plan competitions are dead in the water for new ventures.”

19th-century Prussian general Helmuth von Moltke stated, “No battle plan ever survives first contact with the enemy.” Business plans have something in common with battle plans because no matter how thoroughly they are conceived, reality almost always turns out differently. Franchises are the exception because you are following a well-trod path. In this case, following the long-form business plan is preferable. But most of the time, you are better off creating a short-form plan, testing it in the marketplace and iterating as necessary.

While the intentions behind the long-form business plan are good, in practice, spending a lot of time and energy on the business plan can harm, rather than help, the new venture. I’ve seen new entrepreneurs get bogged down for months (even years) working on deep details of a business plan, instead of what would be far more effective: testing and refining. To put this a different way, I suggest you follow the mantra of “Test, Fail, Test, Succeed, Scale.” To do this, you write a simple overview plan, run small tests to validate your business concept (making your mistakes when the stakes are lower), refine as circumstances dictate, and scale as your tests prove fruitful. At some point (e.g. when you are trying to attract investors) you might want to write the long-form plan, and when you do so, you will find it to be far more accurate and actionable.

In case you are still not convinced, here are four more reasons to adopt the short-form, iterative method of business planning.

  1. It is much faster than writing a traditional plan. When you are starting a new venture, time is your most precious commodity. You should minimize any activity that takes you away from selling to new customers and bringing new products and services to market.
  2. It is more intuitive and easier to complete. Let’s face it: business planning is complex and tedious. Better to do a shorter, punchier version and get to market faster. Your success depends on selling stuff to individuals and companies, not writing business plans.
  3. It is easy for investors and partners to digest. As a sometimes angel investor, I have received a good number of business plans. If the plan makes a “thud” sound when I drop it on my desk, it is probably not going to get a complete read through. But I always have time for a short-form plan, assuming it starts in a compelling fashion.
  4. It is effective. Short-form and iterative business planning gives the business the best chance for success. Your initial marketplace tests, even if unsuccessful, will pave the way towards your future success in a much more effective manner than even the loftiest and most well-written long-form business plan.

Business planning in 2015 is very different from years past. The amount of market and financial data accessible today makes the process infinitely easier. And there are several good single-page business planning formats, including the Business Model Canvas and Lean Canvas, both of which are in widespread use. A more recent addition to the fold is the Business Planning Framework from Center for Business Modeling.

In later posts, I’ll discuss the minimum viable product (MVP) strategy and how it is closely aligned with and supportive of the short-form iterative business planning methodology.

View the Business Planning Framework here.

swot analysis

How to do a SWOT Analysis [Infographic]

When to use SWOT analysis?
Why Use SWOT?
How to do a SWOT Analysis?

Introduction to SWOT

What is a SWOT analysis? It is a simple method of planning that compartmentalizes important internal factors (strengths and weaknesses) and external factors (opportunities and threats) that an organization faces. Simply stated, it is a highly effective planning technique to identify actions that will have a positive impact on business strategy and outcome.

The items revealed in your assessment should be looked at as more than just a list of things you hope to accomplish or may eventually find the time to develop. They are actionable results to drive specific business change. Organizations that ignore or fail to understand, evaluate and leverage their strengths, weaknesses, opportunities and threats will find themselves blindsided by trends in the marketplace and their competitors.

See the SWOT Analysis infographic below.

SWOT

Why Use SWOT?

  • To evaluate a new product or business idea.
  • As a tool to help plan marketing, sales or general business strategy.
  • As a method to improve, re-evaluate, revise or correct an existing offering.
  • To identify a new solution to an existing problem.
  • To uncover potential business challenges.
  • To proactively respond to changes and trends.
  • To better understand how you and your competitors are perceived in the marketplace.

When to Use SWOT?

  • As a way to identify and improve on weaknesses, turning them into strengths.
  • To determine areas where opportunities exist and how best to exploit them.
  • As a tool to help expose and neutralize risks and threats.
  • To better understand your business environment and competitive landscape.

Types of SWOT

SWOT is valuable in gaining perspective on one’s position within an environment. It’s a high level examination often performed early in a project, not as a detailed analysis. It’s best used to understand conceptual or strategic needs instead of tactical execution. Here are some typical types of SWOT analysis:

  • Business Team SWOT – A SWOT analysis performed by an executive team, product team or other business group.
  • Product Launch / Re-launch SWOT – SWOT analysis is commonly used in planning and positioning a product or service offering in the marketplace.
  • Business Launch – SWOT analysis helps Entrepreneurs identify opportunities and position their offering in the marketplace. It’s a key step in building a business plan.
  • 3rd Party (external) SWOT Analysis – An outside inspection can often uncover gaps or deficiencies in strategy. SWOT is an effective tool to gain that external perspective.
  • Marketing or Sales SWOT – From branding to differentiation, SWOT helps define messaging and the unique selling proposition (USP).
  • Personal SWOT – This frequent use of SWOT analysis is to perform a self-assessment of one’s skills and career
    SWOT can be applied to products and services, or departments such as sales, marketing, operations, and financial management.

SWOT as a Business Tool: Strengths and Weaknesses

While SWOT is a highly effective, simple means to gain strategic insight and develop business strategy, it’s important to understand the strengths and weaknesses of this approach. This business tool is most easily described as both simple and flexible. However those two strengths can also be liability.

First, the simple, four quadrant layout of SWOT implies that each quadrant has equal importance. Yet this is rarely true in a given SWOT analysis. For example, when looking at business strategy, opportunities and strengths often far outweigh the importance of weaknesses. Reversing this logic, the opposite may be true when looking at a product relaunch.

Second, it’s not always a straightforward task to transform the results of a SWOT analysis into measurable actions. One challenge is narrowing the list of items in each quadrant to a reasonable number of items where the resulting actions can realistically be addressed.

Getting Started with SWOT

How does one do a SWOT analysis? For each of the four quadrants, identify and rank the points that best describe your situation. It’s often best to prioritize and limit the number of items in each quadrant to keep the SWOT analysis manageable.

Strengths – These represent internal factors (tangible or intangible) that are within your control which impact your organization. Following are examples of questions you could ask to determine your strengths.

  • What are one’s internal strengths or areas of excellence?
  • What areas are most profitable to your business?
  • What types of resources are available to you? (i.e., people, technology, reputation, skills, education, etc.)
  • Where does one have a unique advantage or significant head start?
  • What things are exclusive to your organization that add value or give you a competitive edge?

Weaknesses – Are also within your control, but these factors prevent you from successfully maintaining a competitive edge. Look for things you can do that will aid in achieving your business objective. Following are examples of questions that will help determine your weaknesses.

  • What areas leave you most vulnerable?
  • Which areas of your business cost you the most time and money?
  • What things within your control can you improve on?
  • What factors create a competitive disadvantage for you?

Opportunities – Are factors external to your business that when identified will help you understand the market and environment and position you to profit from areas exposed. Following are sample questions to help you determine areas of opportunity.

  • Where can we take advantage of market trends?
  • Are we using our resources effectively? (i.e., technology, people, skills, etc.)
  • Where can we exploit our strengths and the competition’s weaknesses?
  • Do any products or services offer new opportunity for growth?
  • How are we perceived in the marketplace?
  • How is our competition perceived in the marketplace?

Threats – These are factors outside of your control that represent risks to your business and strategy.

  • Which competitors are coming on strong?
  • How will economic issues impact our ability to thrive and expand?
  • Where are market trends working against us?
  • What are the greatest risks presented by competitors, marketplace trends including consumer behavior?

The Right B2B Marketing Strategy for Your Business

There’s no question that the right marketing strategy for your business will depend on your brand, your business capabilities, your solutions, and most importantly, your market. But knowing the distinct trends can and should influence your marketing priorities.

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Additional SWOT Resources