As a salon owner, can you be brutally honest with yourself when analyzing your business? If so, it might be time to conduct a S.W.O.T. analysis … and you’ll be glad you did!
Every salon owner is proud of his or her business, but is it really as great as it could be? One way to find out is to conduct a S.W.O.T. analysis. The acronym stands for Strengths, Weaknesses, Opportunities and Threats and it’s a popular tool from the professional marketing community that you can utilize to gain a better picture of just how good – or bad – your businesses operates within your community. The good news is that a S.W.O.T. analysis is easy to do and doesn’t cost anything except the time to complete it, and the information gathered can be invaluable in developing any future business plans.
What It Is
The S.W.O.T. analysis is a widely-used marketing tool that provides a handy framework for reviewing a business strategy, position and direction. Ironically, this concept was a result of corporate planning failure. Beginning in 1960, a team of six task team members began working at the Stanford Research Institute to solve big business planning problems. After working for 10 years, interviewing 1,100 companies and organizations and 5,000 executives, the S.W.O.T. method was born. Since its creation, it’s been used successfully by various businesses and industries and can be a huge benefit to salon owners, as well.
S.W.O.T. stands for Strengths, Weaknesses, Opportunities and Threats, and these four words form the backbone of the entire analysis. Simply put, this exercise can help you identify and list each of these elements as they pertain to your specific goal or business plan, then analyze how the entries in each category could affect your ability to execute that plan. And it’s all done by asking some tough questions about your business, and being brutally honest with yourself is an absolute must. In other words, the axiom “No pain, no gain” definitely applies!
Step One
Determine the Goal
The very first step in S.W.O.T. is determining a specific objective, such as gaining more market share, adding additional salon locations or diversifying equipment offerings. Once that goal, whatever it is, is established, a carefully-executed S.W.O.T. analysis is implemented to determine if the objective is achievable, and what type of strategic planning is needed to make it happen. Once that goal is firmly established, it’s time for salon owners, their staff and even their community, to some extent, to start listing those Strengths, Weaknesses, Opportunities and Threats.
Step Two
Internal Factors
It’s often said that the hardest thing to look at is inside oneself, and the same thing applies to your business. After all, the salon(s) that you’ve worked so hard to build have, over the years, become an extension of yourself; so any criticism of them is a criticism of you. If this is the case, then it’s time to toughen up, and S.W.O.T. analysis is a great tool to help you do that.
To begin your S.W.O.T. analysis, start with the two internal factors that affect your business – its strengths and weaknesses. Many of your strengths you already know because they’re what keep clients coming back to tan at your salon. Things such as top-notch tanning equipment, a clean environment and strategic locations within your community can all be considered strengths, so you should feel free to list them as they apply to your overall goal or objective as stated in Step One. Now that you’re feeling good about yourself, it’s time for that proverbial “grain of salt”, i.e., your weaknesses. The key to getting the most out of this step is to be brutally honest in asking – and answering – those tough questions. For example, are you doing enough with your marketing efforts or is your competition offering promotions that you aren’t? What about customer service? Do your clients perceive your staff as friendly and efficient, or do they come across another way? Like when you listed your strengths, think about your weaknesses in terms of how they might relate to the overall objective you stated at the beginning of this exercise.
The S.W.O.T. analysis is a widely-used marketing tool that provides a handy framework for reviewing a business strategy, position and direction.
Because it might be all too tempting to gloss over your weaknesses, there’s a way to verify the accuracy of this part of your S.W.O.T. analysis – check your answers with what others are saying about your business. The first way to do this is by gathering input from managers and staff, but don’t stop there – it’s also good to include your clients’ perceptions of your business. You should already be doing this through random surveys with current and former tanners. Another good but potentially humbling way to double-check your salon’s weaknesses is by looking online; these days, there are many online forums that encourage people to share their experiences – good and bad – with local businesses, and chances are you’ve already been “reviewed.” It’s like playing “mirror, mirror on the wall” – you might be surprised to discover strengths and weaknesses you never knew you had!
Step Three
External Factors
After taking a long hard look at yourself as defined in S.W.O.T.’s second phase, it’s time to focus on those things that are affecting your business from the outside, which are categorized as “opportunities and threats.” Since the third step lists and examines any and all external influences that need to be considered when executing your business plan, remember to list them in the context of your overall goal!
Listing your opportunities should prove to be an enjoyable part of the S.W.O.T. experience; after all, who wouldn’t enjoy a world of infinite possibilities?
If increasing market share was a salon’s Step One objective, some opportunities that could be identified might include adding new upgrade tanning units and/ or spa services to your salon’s menu. This could also include unique and exciting marketing and promotional opportunities within your community, or even opening another salon in an area of town that’s currently underserved. You’re encouraged to list any possible opportunity that could help you achieve your stated goal.
It’s often said that the hardest thing to look at is inside one-self, and the same thing applies to your business.
No matter how good you believe your salon to be, there are always those factors that might threaten its success. And, while most salon owners would quickly make the Tan Tax the first thing on the list, it’s more important to concentrate on more immediate threats to your overall goal – and that would be the dreaded competition. Are competing salons in your area creating a buzz with a popular bikini contest? Or are they operating successful marketing campaigns designed to brand their name and image in tanners’ minds? Are they offering new equipment or services that you’ve been dragging your heels on deciding to offer? All of these things and more could negatively affect your business and must be considered threats … and put on the list.
Step Four
Analyze!
So you’ve established an objective and taken a look at your business both inside and out, discovering every strength, weakness opportunity and threat … now it’s time to analyze. Take all of the information you gathered during Steps Two and Three and use it to plan a course of action for goal setting, strategy formulation and implementation. Remember to be specific, always analyze in relation to your objective and competition and keep everything short and simple in order to develop a plan to address all that the S.W.O.T. analysis helped you discover. Whatever your goal is, it’s something worth doing, and a thing worth doing is worth doing well.
S.W.O.T. analysis might be simple and free, but the information it develops can be priceless. And in today’s uncertain economy, there could be no better time to sit down and take a long, hard look at your business. Just remember to be honest and you’ll see exactly where your salon(s) is today … and where it could be in the future!
