A SWOT analysis is an incredibly simple, yet powerful tool to help you develop your business strategy, whether you\u2019re building a startup or guiding an existing company.<\/p>\n\n\n\n
SWOT stands for Strengths, Weaknesses, Opportunities, and\nThreats.<\/h3>\n\n\n\n
Strengths and weaknesses are internal to your company\u2014things that you have some control over and can change. Examples include who is on your team, what do you do well or better than your competition, in what areas are you an expert in the minds of your customer base, where are you short of capacity or talent, are you positioned to be nimble, do you have the cash flow you need, are you lacking technology, or skill that would allow you to excel.<\/p>\n\n\n\n
Opportunities and threats are external; things that are going on outside your company, in the larger market. You can take advantage of opportunities and protect against threats, but you can\u2019t change them. Examples include competitors, prices of raw materials, and customer shopping trends.<\/p>\n\n\n\n
A SWOT analysis organizes your top strengths, weaknesses, opportunities, and threats into an organized list <\/p>\n\n\n\n
When you dedicate the time and effort to do a SWOT analysis,\nyou\u2019ll be more knowledgeable and prepared to develop strategies for\nprioritizing the work that you need to do to grow your business.<\/p>\n\n\n\n
You may think that you already know everything that you need to\ndo to succeed, but a SWOT analysis will force you to look at your business in\nnew ways and from new directions. Seek opinions of anyone that knows your\nbusiness well for an outside look at your business. Those outside, objective\nperceptions might not be anything you have identified, but could be very\ntelling for you. Look at your strengths and weaknesses and determine how you\ncan better utilize them to take make or take advantage of opportunities and\nthreats that exist in your business space. Look at your opportunities and\nthreats and analyze how you can capitalize on the opportunities and protect\nyour business from the threats.<\/p>\n\n\n\n
Who\nshould do a SWOT analysis?<\/strong><\/h3>\n\n\n\n
Certainly, business owners and the company leaders need to be deeply involved. You can get input from employees as to how they see the company, but to be the most effective, the top-level decision makers must be involved.<\/p>\n\n\n\n
For best results, you\u2019ll want to gather a group of people who\nhave different perspectives on the company. Select people who can represent\ndifferent aspects of your company, from sales and customer service to marketing\nand product development. Everyone should have a seat at the table.<\/p>\n\n\n\n
If you\u2019re starting or running a business on your own, you can\nstill do a SWOT analysis. Recruit additional points of view from friends who\nknow a little about your business, your accountant, or even vendors and\nsuppliers. The key is to have different points of view.<\/p>\n\n\n\n
Existing businesses can use a SWOT analysis to assess their\ncurrent situation and determine a strategy to move forward. But, remember that\nthings are constantly changing and you\u2019ll want to reassess your strategy,\nstarting with a new SWOT analysis every six to 12 months.<\/p>\n\n\n\n
For startups, a SWOT analysis is part of the business planning\nprocess. It\u2019ll help codify a strategy so that you start off on the right foot\nand know the direction that you plan on going.<\/p>\n\n\n\n
This does not have to be a day-long meeting. It can be broken down in chunks of an hour or\ntwo once a week until you have really analyzed and documented the four\ncategories. For some companies, a couple\nof hours is enough.<\/p>\n\n\n\n
Gather people from different parts of your company and make sure\nthat you have representatives from every part. You\u2019ll find that different\ngroups within your company will have entirely different perspectives that will\nbe critical to making your SWOT analysis successful.<\/p>\n\n\n\n
Spark the analysis with these questions <\/strong><\/h3>\n\n\n\n
Make sure everyone involved knows what falls under each\ncategory. Give examples of each and ask the team questions to get the process\ngoing. These questions can help explain each section and spark creative\nthinking.<\/p>\n\n\n\nSWOT Defined
<\/figcaption><\/figure>\n\n\n\n
Strengths<\/strong><\/p>\n\n\n\n
Strengths are internal, positive attributes of your company.\nThese are things that are within your control.<\/p>\n\n\n\n
What business processes are successful?<\/li>
What assets do you have in your team, such as knowledge,\neducation, network, skills, and reputation?<\/li>
What physical assets do you have, such as customers, equipment,\ntechnology, cash, and patents?<\/li>
What competitive advantages do you have over your competition?<\/li><\/ul>\n\n\n\n
Weaknesses<\/strong><\/p>\n\n\n\n
Weaknesses are negative factors that detract from your\nstrengths. These are things that you might need to improve on to be\ncompetitive.<\/p>\n\n\n\n
Are there things that your business needs to be competitive?<\/li>
What business processes need improvement?<\/li>
Are there tangible assets that your company needs, such as money\nor equipment?<\/li>
Are there gaps on your team?<\/li>
Is your location ideal for your success?<\/li><\/ul>\n\n\n\n
Opportunities<\/strong><\/p>\n\n\n\n
Opportunities are external factors in your business environment\nthat are likely to contribute to your success.<\/p>\n\n\n\n
Is your market growing and are there trends that will encourage\npeople to buy more of what you are selling?<\/li>
Are there upcoming events that your company may be able to take\nadvantage of to grow the business?<\/li>
Are there upcoming changes to regulations that might impact your\ncompany positively?<\/li>
If your business is up and running, do customers think highly of\nyou?<\/li><\/ul>\n\n\n\n
Threats<\/strong><\/p>\n\n\n\n
Threats are external factors that you have no control over. You\nmay want to consider putting in place contingency plans for dealing them if\nthey occur.<\/p>\n\n\n\n
Do you have potential competitors who may enter your market?<\/li>
Will suppliers always be able to supply the raw materials you\nneed at the prices you need?<\/li>
Could future developments in technology change how you do\nbusiness?<\/li>
Is consumer behavior changing in a way that could negatively\nimpact your business?<\/li>
Are there market trends that could become a threat?<\/li><\/ul>\n\n\n\n
Now to the SWOT analysis<\/strong><\/h3>\n\n\n\n
Doing a SWOT analysis is similar to brainstorming meetings, and there are right and wrong ways to run them. I suggest giving everyone a pad of sticky-notes and have everyone quietly generate ideas on their own to start things off. This prevents the loud overtaking the quiet and ensures that all voices are heard. Make sure that the space is collaborative, inclusive and non-judgmental. This is not the time to shoot down anyone\u2019s idea or criticize. You never know where an idea might take the group even if the initial idea gets thrown out.<\/p>\n\n\n\n
Tackle one aspect at a time, don\u2019t try to think about all four\nat the same time, things will get messy quickly.<\/p>\n\n\n\n
After five to 10 minutes of private brainstorming, put all the\nsticky-notes up on the wall and group similar ideas together. Allow anyone to\nadd additional notes at this point if someone else\u2019s idea sparks a new thought.<\/p>\n\n\n\n
Once all of the ideas are organized, it\u2019s time to rank the\nideas. I like using a voting system where everyone gets five or ten \u201cvotes\u201d\nthat they can distribute in any way they like. Sticky dots in different colors\nare useful for this portion of the exercise. If you do not have the numbers for\nthat approach to work, give voting members value points that they can attach to\nideas to see which ones rise to the top.<\/p>\n\n\n\n
Based on your voting methodology, you should have a prioritized list of ideas. Of course, the list is now up for discussion and debate, and someone in the room should be able to make the final call on the priority. This is usually the business owner, but it could be delegated to someone else in charge of business strategy.<\/p>\n\n\n\n
The Next Step<\/h3>\n\n\n\n
With your SWOT analysis\ncomplete, you\u2019re ready to build it into concrete strategy. After all, the\nexercise is about producing a strategy that you can work on during the next few\nmonths.<\/p>\n\n\n\n
Look at your strengths\nand figure out how you can use those strengths to take advantage of your\nopportunities. You may not have really tapped the potential of your strengths\nbecause you never focused or thought about them the way this process has\nenabled. How can your strengths combat the threats that are in the market. Now\nthat you have identified the threats, you may be able to cut some of them off\nat the pass. Use this analysis to produce a list of actions that you can take.<\/p>\n\n\n\n
What weaknesses were\nfound? What can be done to correct those\nweaknesses? What investment needs to be\nmade to build up that area of your business? \nDo you need new\/different employees, technology, assets?<\/p>\n\n\n\n
Take the list of actions,\nmarry it with your calendar and start placing goals on it. What do you want to\naccomplish in each of the next months or quarters? Make sure that tasks that\nwill achieve the goal are assigned to the best person and that they know the\npriority and deadline for each.<\/p>\n\n\n\n
You\u2019ll also want to do\nthis by analyzing how external opportunities might help you combat your own,\ninternal weaknesses. Can you also minimize those weaknesses so you can avoid\nthe threats that you identified?<\/p>\n\n\n\n
The Payoff<\/h3>\n\n\n\n
This process will empower\nyou to know how you can change your business, where it needs to be changed, what\nstrengths you should leverage more, what weaknesses you need to correct, what\nare the opportunities and threats. It\ncan be very powerful and with your goals and\nactions in hand, you\u2019ll be a long way toward completing a strategic plan for\nyour business.<\/p>\n","protected":false},"excerpt":{"rendered":"
SWOT: Strengths, Weaknesses, Opportunities and Threats. The exercise every business should complete to stay relevant and successful<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[23,4,6,7,71,115],"tags":[62,110,43,176,180],"yoast_head":"\n
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