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A SWOT analysis is a quick and simple way to identify your company’s attributes and setbacks. Using this method, you’ll sit down with your team and learn what the company’s Strengths, Weaknesses, Opportunities, and Threats are. The first half of the SWOT analysis is your internal component, the second half is the external factors affecting the business.
The best part about a SWOT analysis? There are no special circumstances that need to be in place to use it. You can do a SWOT analysis as often as you want, and we’re going to show you how. Using these SWOT analysis examples, you’ll feel better about performing your next (or your first) analysis with your team.
Start Here
Once you’ve gathered your team, it’s time to get started with either a four-square SWOT template or just a pen and paper. You’ll want to brainstorm for each of the four sections and record what the team has to say about each. Start at the beginning and work your way through the acronym. Once you’re finished, we’ll go over what happens next.
Strengths
The first stop is your company’s strengths. Where do you shine? What are you good at? You can also consider tangible assets in this section as well, such as capital, the value of your inventory or the value of the business as a whole. Do you have a lot of working capital or plenty of cashflow? That’s certainly a strength. Do you have a good team behind you? That’s definitely a strength.
Focus on the internal aspects of the business for this part of the analysis. We’ll focus on the external factors that affect your business’s success when we reach the second half of the exercise. Be sure to let everyone speak, as you may learn something you didn’t know before, or gain a better understanding of a particular aspect of the business.
Weaknesses
Again looking internally, it’s time to look at what you don’t do well. And let’s be honest; this part is not fun. Be careful here, as pointing out weaknesses also comes with pointing the finger at times. It’s important to keep things unbiased during the analysis and simply focus on the objective weaknesses of the business itself. The analysis is not for pointing out who’s at fault for the business’s shortcomings.
Which areas does your business need improvement? Does your team work well together? Are you hemorrhaging money? Are your customers unhappy with your customer service or products? These are heavy questions, but crucial ones. Be honest with yourself here. Sugar-coating the truth is only going to make it harder to improve and doesn’t benefit anyone. The naked truth isn’t always pretty, but it’s certainly more effective than a lie or half-truth.
Opportunities
Now that we’ve covered the internal factors of the SWOT analysis, we can move to the external. Opportunities are a great place to start, as they encompass many things that affect your business. Are there any current opportunities that could be beneficial to your business? Do customers, critics, and the competition view your business in a positive light?
It’s also important to look closely at your market or industry during this part of the analysis. What changes have occurred or are occurring that you can take advantage of, or that may present an issue to the business? Can you take advantage of these opportunities indefinitely, or is there a limited window of time in which you need to act?
Threats
Last, but not least, we come to the next external factor: threats. These are usually things that are imminent and mostly out of your control, and present a significant risk to the business as a whole. If you leave this part of the analysis out, you’re setting yourself up for greater pain down the road. It’s tough, but you must look closely at your threats and begin strategizing how to reduce or eliminate them entirely.
Threats can be anything from your competition to shifts in consumer behavior, government policies, or the industry itself. All of these things can affect your business at any given time, often without warning, so it’s a good idea to have a plan in place for sudden threats. A SWOT analysis is a great safeguard for such occurrences.
Once Your Analysis is Complete…
Once you’ve completed a thorough SWOT analysis, it’s time to move onto your strategy. Where will you go from here? How can you leverage the strengths you discussed to combat sudden threats or improve on your weaknesses? How do your threats and opportunities affect the way the business will function? Where do you want to be in the next year? Your analysis is pretty much useless without some kind of strategy in place after it’s complete. Brainstorm ideas with your team on how you can move forward, and be sure to set obtainable goals for the near and distant future to continue improving. Good luck!