Franchise Advice Example of a SWOT analysis Strengths
• Well established and proven franchise model • Good reputation in neighbouring territories • Comprehensive training and support available from the franchisor
• Approved suppliers at preferential terms • Integrated electronic point of sale • Strong demand for product in local area • Market-leading products available • Managing director has 20+ years of people management and team-building experience
• Modern premises recently refurbished • Recently purchased company liveried van
Weaknesses
• Break-even not forecast to be achieved until month 15 • Narrow product line available • Website requires development • High staff cost structure impacting on profi t margins • Inadequate after-sales procedures in place • Lack of car parking spaces • Staff development training plan required
Opportunities
• Professional bookkeeping service available freeing up admin time to focus more on sales
• National TV advertising campaign running for the next three months
• Expansion of local population with new housing estate due to be fi nished next year • New product development in progress • Improvements in external signage • Join local Chamber of Commerce • Expert advice slot on weekly local radio programme starting next month
• Franchisor working on a new customer loyalty scheme
Threats
• Road closure due to burst water pipe impacting business for next three months • New data protection regulations • Business closure – fi re, fl ood, theft etc • Competitors – new, low-cost entrants to the market
• Poor weather conditions impacting distribution channels
• No clear social media policy guidelines in place
Use your analysis
After completing your SWOT analysis, it’s vital that you learn from the information. So, following this, you should: • Develop a plan to build on your strengths as you perceive them, using them to their full potential
• Plan to reduce your weaknesses, either by minimising the risk they represent, or making changes to overcome them
• Make the most of all your opportunities and try to convert any threats on the horizon into opportunities. Try to be proactive, and put plans into place to counter any threats as they arise
“Take advantage of other people’s perspectives when you complete your SWOT analysis. It helps to get an outside view, since your own perceptions may not always match reality”
Comparative analysis The basic SWOT process is to fi ll in the four headings, but the real benefi ts come when you take an overview of everything in each box, in relation to all the others. This comparative analysis will then help to link external and internal forces that will bring about further success for your business.
If you are producing your SWOT analysis as part of your business plan, with which you are going to approach a lender, ensure that you are able to demonstrate more strengths and opportunities than you do weaknesses and threats. Your weaknesses and threats should be mitigated so the lender fully understands the business potential and how you intend to overcome risks to your business.
Avoiding the pitfalls • Don’t just focus on the large, obvious issues. You will need to give all factors careful consideration
• Take advantage of other people’s perspectives when you complete your SWOT analysis. External opinions can often help you to see things more easily, or to be more innovative
• Be honest, open, and clear about those areas where you need to improve or take action
Your business environment will be constantly changing, so remember, a SWOT analysis is a dynamic technique that can be used regularly and not just when writing your initial business plan.
Richard Holden is head of franchising at Lloyds
Banking Group. Visit:
www.lloydsbank.com/franchising
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BusinessFranchise.com | May 2018
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