When it comes to planning your business activities over the next period, it’s not unusual to fall into one of two buckets – full of ideas and issues to solve… or completely blank.
Fortunately one simple tool can help you navigate this, regardless of which bucket you find yourself in – the SWOT.
SWOT stands for Strengths, Weaknesses, Opportunities and Threats. The tool is simple but extremely helpful in both exploring and organizing information that can help or hinder your business. This information should then be used to leverage aspects of your business or build mitigation strategies to safeguard it.
Before we continue, let’s quickly define what each part of the SWOT refers to.
What is a SWOT?
Strengths | Internal strengths of your business that provide it with an edge over competitors
Weaknesses | Internal weaknesses of your business that could put it at a disadvantage either now or in the future
Opportunities | External opportunities that your business can leverage
Threats | External threats that your business should be prepared to handle
Generally, you’ll find that the Strengths and Weaknesses are focused on internal elements of your business. Examples of this are: Brand & Marketing, Internal Processes, Company Culture, Unique Selling Proposition, Competitive Advantage, Skills and Resources, Supply Chain Advantages, Partnerships
On the other hand, Opportunities and Threats are focused on the external elements within which your business is situated or operates. These could be: Economic Climate, Industry Trends, Market Size, Consumer Behavior, Disruptors, Government Regulations
Why you should conduct a SWOT analysis
A SWOT analysis is used to collect and organize information on your current and future business landscape – both internal and external. Very often, you’ll get caught up in the day to day. Running a business is not easy! But you need to stop and take a look at the big picture – both within your business and outside of it – in order to identify elements of your business or your business environment that you can leverage or minimize risk against.
It’s important to note that a SWOT is a tool to help you gather information and put it down in a structured format. It does not automatically pop out a plan of action to mitigate risks or act on opportunities. To do that, you’ll need to build an action plan after completing the SWOT.
Best practices for a great SWOT analysis
To make it easier, more engaging and definitely more actionable, I like to ensure my SWOT has been explored from all angles and that the points in it are relevant and informative and very importantly, not generic. You shouldn’t be able to apply the same SWOT to another business or brand. For it to be useful, it really needs to be specific to your business.
So the trick is – the value of the SWOT is in the questions you ask and how deep you go into the research and findings.
For example, you might have “great team” as a strength. Or you can make that more informative by saying “team members continuously and naturally grow by cross-skilling each other as they work collaboratively with one another on projects”.
A weakness could be “lack of resources”, or it could be more useful with details such as “there is no customer data analytics role and an overall lack of customer data analytics skills across the team”.
An opportunity could be “expand to Market B” or it could be “develop customer acquisition strategies in Market B”.
Lastly, a threat could be “COVID-19”, or it could be “due to COVID-19, my typical customers are less likely to spend money on this product”.
As you can (hopefully) see, the suggestions for each of the examples above almost gives away an actionable activity that your business can focus on either growing or mitigating.
When should you use a SWOT?
A SWOT analysis can be done whenever you want to plan activities to drive the success of your business. This could be done annually or even every 6 months.
A SWOT is one of the first steps carried out in strategy planning – which can be done once every few years, or as a one-off when a major change occurs. During times of disruption, SWOTs are helpful in framing your business within the environment and identifying opportunities to help your business survive or even thrive!
Action: Conduct a SWOT analysis
Below are some questions to get you started on your SWOT. You can use this downloadable SWOT Questions and Template to write down your answers.
What are you most known for?
What do you do or deliver that delights your customers?
What do your employees love about working in your company?
What do you do better than all your competitors?
What internal advantage do you have that none of your competitors have?
How have you been able to build up your customer base/following?
What are you unable to do well?
What required skills are not available within your workforce?
What do your competitors do better than you?
What are your customers’ most common complaints?
What processes are not standardized (and therefore variable, in effectiveness and efficiency)?
What areas of the business could be more efficient with automation?
What are your competitors leveraging that are also available to you?
What government or business-support resources are available to you?
What are the current trends in your industry?
What changes are happening in your market(s)?
What products could you be offering that you’re not currently offering?
How can you get a larger share of the customer pool?
What is happening in the market that could cause customers to buy less from you?
Are there any disruptors that you need to be planning to mitigate risk against?
Are your competitors gaining market share, and if so, how?
Is your data secure or is there a risk of a data breach incident?
Is your supply chain secure?
Is your target audience diminishing?
A final word on SWOTs
SWOT is a simple and easy tool to use and it’s available to everyone all the time. The difference between a good SWOT and a great SWOT is in the information you put into it. A great SWOT will make it so much easier to identify what activities to plan for in the upcoming period of time, what to look out for and where your opportunities lie. Take the challenge now and create the best SWOT you’ve ever created. You never know – you could identify some things that change the trajectory of your business!
Have you used a SWOT before? Are you considering using one now? What challenges do you have when using a SWOT? Post your comments and any questions below, and if you can help anyone else out with an answer, don’t hesitate to do so! As always, if you’ve found this article useful, share it with someone who’ll benefit from it as well!
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