July 03 2014
This post comes to us from the Market Leader blog:
SWOT analysis is one of the basic concepts taught at business school. The problem is, however, the only business school many real estate agents go to is the School of Hard Knocks.
But that's OK—you can be a graduate with honors of Hard Knocks University and still benefit from performing a SWOT analysis on your real estate practice.
You may have all of the energy, drive and passion in the world; but without some sort of plan in place, even the most enthusiastic agents can suffer from massive diffusion, and find themselves confronted with too many tasks competing for the next hour of their time. As a result, none of their projects get very far, and the ones that do are poorly aligned with their needs and circumstances.
The standard SWOT analysis, as we know it, was developed by Albert S. Humphrey, a successful management consultant in the '60s and '70s. Humphrey was looking for a tool that went beyond maximizing strengths and minimizing weaknesses; he wanted one that addressed how those strengths and weaknesses interacted with the broader business environment.
SWOT stands for:
Now, let's talk about what SWOT isn't. It's not a business plan. It is, instead, a foundational document that can help you develop your business plan in a more intelligent way.
Most people arrange SWOT in a pie-shape like this:
You can do that if you like, but I believe it's limiting. You need an awfully big circle to write everything in! I prefer an Excel spreadsheet approach.
Use four columns or four paragraphs in your document—your choice.
Here's what an imaginary SWOT analysis might look like:
Strengths
Weaknesses
Threats
Opportunities
Every agent has a competitive advantage of some kind. It might be expertise in a certain neighborhood or with a certain market of people. What is your Unique Value Position, or UVP? What can you do, even as a new agent, that other agents would find hard to replicate, even if they threw a bunch of money at it?
If you're a rookie, you might have to be a bit creative. But every agent has some advantage he or she can use to get a leg up in their first few appointments, at least. The longer you work at it, the broader that UVP can be—but it should still be focused.
Once you have a list of your strengths, weaknesses, opportunities and threats written out, the next step is to develop a concrete plan of action. Your plan should do each of the following:
It's not enough to have just a bullet point. Set a priority and give yourself a deadline for each item.
Here's an example, building on the "Strengths" column above:
And that's just one "Strength." There are other things you can do to capitalize on your strengths and unique knowledge of the business.
Each of these tasks will have its own priority, list of implied subtasks and set of deadlines. It's up to you how far you go.
Of course, at some point, you have to stop typing and start putting your plan into action. Don't fall victim to "paralysis by analysis." Remember that a good plan executed now is better than a perfect plan that you never get around to implementing.
Yes, this SWOT analysis will be an evolving document. You will never be totally done. You can update it and refine it throughout your career, as your strengths and weaknesses evolve and as the market around you changes, and with it, the threats and opportunities in your area.
If you start with a strong SWOT analysis, flesh it out with a plan of action, add a priority to each task and set deadlines, then you are getting very close to a workable business plan.
After that, it is all about your own diligence, energy and execution.
Good luck!