One of the easiest ways to figure out how efficiently your agency is running is by performing a SWOT Analysis… but what the heck is that? Long story short, a SWOT Analysis is a technique for assessing (S)trengths, (W)eaknesses, (O)pportunities, and (T)hreats in your business (mindtools.com).
So how is a SWOT helpful? You can use it to get the most out of your agency’s current resources, and it will show you how to use your assets to your best advantage. It can also reduce your risk of failure by eliminating obstacles that could catch you unaware. The best takeaway is it allows you to easily craft a strategy to distinguish yourself from your competition and dominate your market.
How to Do a SWOT Analysis
Let’s break it down: Use this template to begin.
Make sure to approach your SWOT Analysis with one of two mindsets: either to kick off your business strategy, or to analyze your current strategy.
In both cases, you will need to conduct this analysis with your team so you can accurately incorporate the entire range of functions in your agency. This paints a bigger, more detailed picture of where your agency currently stands.
Now we’ll get into what questions you should ask for each area of the analysis.
Think of strengths as things that your agency does well; it helps to view these areas of excellence from the lens of how it distinguishes you from your competition. What are some advantages that your business has? Examples could be having a highly motivated staff, access to more carriers, or a strong relationship with other local businesses.
Then flip your perspective! Ask yourself what your competitors see as your strengths, what factors in particular tip the sale in your favor?
This is important to note: something is only a strength if it gives you a clear advantage.
This can be a touchy topic because nobody really likes to talk about what they could be doing better or what is potentially hurting their business. The hard truth is you have to be honest with yourself. This SWOT Analysis will only be helpful if you include all the information about your agency. So, it’s best to be realistic and address any unpleasantries head on.
According to PestAnalysis.com, “weaknesses (like strengths) are inherent features of your organization,” so focus on your team, resources, operating systems, etc. What in an area you could improve on? How about a sales pitch that isn’t bringing home the bacon?
Again, take yourself out of your own perspective and consider how other agencies in your market see your business. Do they have similar weaknesses? Are they aware of your weaknesses? Figure out where they are doing better than your agency, and improvement will come easier!
An opportunity is a chance for something positive to happen, but that you’ll need to work to achieve.
They usually require you to keep an eye on current trends outside your agency, so try to widen your focus to take in industry trajectories. Examples of opportunities for independent agents include shifts in your carriers’ interests or in technology you use. Being able to spot and take advantage of opportunities can mean the difference between your agency taking the lead in your market or being left in the dust (clearpointstrategy.com).
To get you started, think of a current opportunity you haven’t taken advantage of. These don’t need to be game changers, just easy means to increase your competitiveness. Are there any upcoming workshops you can take (PST check out the ASNOA U Virtual Road Trip!!!)? What’s trending in the insurance industry? What’s trending in your markets?
Going back to widening your focus, keep your eyes on government policies as well as changes in social trends and demographics.
What’s a Threat, and how does it differ from a Weakness? Great question, here’s the short answer: Threats are anything outside your agency that can negatively affect your business. Think shifts in market requirements, a shortage in prospective new hires, etc. To limit the impact these threats have on your agency you have to anticipate them, which means you must first identify them to avoid growth stalls.
The Coronavirus pandemic is a perfect example of a threat, think about how it affects your ability to meet and communicate with your clients! Obviously as independent agents you have more options to offer prospects, but you’ve got a problem if something prevents you from reaching your audience. What about cybersecurity? Hackers are only getting better, and more and more small businesses fall victim to horrific cyber-attacks now than ever before. Think of how you can combat this and set your agency up for success through any unexpected occurrence.
When you get down to it, a SWOT Analysis is just an easy way to check in with your business. It provides a sound foundation for improvement and is an excellent starting point to determine specific growth opportunities. Let us know if you found this helpful, or if you want more details about how to conduct your own SWOT Analysis! Reach out to firstname.lastname@example.org for more information!