Issue 2 - February 2005

How strong is your practice?
By Tom Deters, DC

If chiropractic intends to position itself to capture a greater share of the health and wellness market, each individual practice must move forward strategically. The first step in strategic planning is to analyze, assess and evaluate the present situation thoroughly.

One of the best and most efficient first-step methods to accomplish this is what I call the “SWOT” analysis — an evaluation of a business’ Strengths, Weaknesses, Opportunities and Threats.

Any planning performed without a SWOT analysis at the core is probably not true strategic planning. As a result, the plan may overlook critical aspects or be flawed, leaving the business vulnerable to either an imminent risk or a missed opportunity.

SWOT analysis takes time, effort and thought. However, it provides you with the golden opportunity to create an individualized map for your personal success.

By conducting a SWOT analysis, you understand how to better utilize your strengths, offset your weaknesses, realize opportunities and neutralize or minimize threats to your business.

STRENGTHS

Strengths are internally focused and fall into two categories — personal strengths and business strengths.

Personal strengths include traits, knowledge, skills, characteristics, capabilities, competencies and communications ability.

Business strengths address operational capabilities, financial analysis and review (looking at revenue streams, sources and mix as well as costs and margins), expertise, relationships, reputation, resources and assets.

Staff feedback and input in all areas is essential to this process. Not only will you get a better and more comprehensive product, you will also build teamwork and buy-in by including them.

Arrange your lists in descending order, from greatest (or most significant) strengths to those that are less significant or have less impact on your business.

WEAKNESSES

Weaknesses are also internally focused. Undertake an analysis of all the areas addressed in the strengths portion of SWOT analysis, but focus an honest assessment of weaknesses, defined as shortcomings, deficiencies or a “lack of.”

Analyzing weaknesses may seem like focusing on the negative and may be uncomfortable, but it is essential. You cannot plan until you understand your present condition — which includes vulnerabilities.

Arrange this list from the most significant weakness to the least significant.

OPPORTUNITIES

Opportunities are externally focused. Research market opportunities (demand, unfulfilled and underserved niches), demographic trends (both local and large scale) and potential or emerging revenue streams (new services, new technologies) in terms of potential impact and magnitude.

If an opportunity exists, identify how big it is and how much time, money and effort it will take to realize it.

Break down this list into categories and priorities from greatest opportunity to least.

THREATS

Threats are also externally focused. Look at things as they exist and at how they will likely play out in the future. Research helps make predictions more reliable.

Although threat analysis overlaps with opportunity analysis in terms of examining market and demographic trends, it also includes competitive set issues, economic factors, governmental regulations or legislation and public perceptions. Break this list down into categories and prioritize them from greatest threat to the least significant threat.

Too often smaller businesses suffer from a myopic view, focusing on their client base and market. The SWOT analysis challenges you to think globally (while acting locally) and stimulates the forward thinking that is required to grow a successful business over time.

For instance, I am still amazed at the number of doctors in California who are scrambling to totally redirect their practice as legislation has affected worker’s compensation. The problem is that they are just starting to change and adapt after the fact when a SWOT analysis (particularly threats research) could have raised their awareness to the fact that such a change was inevitable. They could have planned for the change.

The best time to get into a new business market is during the early phases when you can gain ground more easily and rapidly. An opportunities analysis identifies these early phases. Positioning your practice as a “wellness” practice after a half a dozen such practices in your community have been created may not put you in the most strategically advantageous position.

After you complete a proper SWOT analysis, you can begin your strategic planning and set goals and priorities. In business, often the difference between success and failure is being proactive rather than reactive. The SWOT analysis can be an incredibly powerful first step in predicting, and then creating, your future success.