Analysing your business SWOT
A SWOT analysis focuses on the internal strengths and weaknesses of you, your staff, your products, and your business.
At the same time, it looks at the external opportunities and threats that may have an impact on your business, such as market and consumer trends, changes in technology, legislation, or financial issues.
The traditional approach to completing SWOT is to produce a blank grid of four columns, one each for strengths, weaknesses, opportunities, and threats – and then list relevant factors beneath the appropriate heading. Don't worry if some factors appear in more than one box and remember that a factor that appears to be a threat could also represent a potential opportunity.
Know your strengths
Take time to consider what you believe are the strengths of your business. These could be seen in terms of your staff, products, customer loyalty, processes, or location. Evaluate what your business does well relative to your competitors. Also try to include some personal strengths and characteristics of your team as individuals.
Recognise your weaknesses
Take an objective view of every aspect of your business. Ask whether your products and services could be improved. Think about how reliable your customer service is, or whether your supplier always delivers. Try to identify any area of expertise that is lacking in your business.
Be as honest as you can in listing weaknesses. Don't just make a list of mistakes that have been made, try instead to see the broader picture and learn from what happened.
Get an outside view on your weaknesses – your own perceptions may not always match reality.
Be prepared to hear things you may not like.
Spot the opportunities
The next step is to analyse external opportunities; these may relate to competitors who are under-performing, technology that could benefit you, legislative changes, new market trends, and consumer buying habits.
Watch out for threats
Some threats are tangible, such as the knock-on effects of a global economic crisis or a new competitor arriving, but others may be only intuitive guesses that result in nothing. Even so, it's much better to be vigilant because if a potential threat does become real, you'll be able to react much quicker having already considered your options.
Think about the worst things that could realistically happen, such as losing your customers or facing a new product better than your own. Listing your threats will help you to plan for these risks.
After completing your SWOT analysis, it's vital that you learn from the information. You should:
- Develop a plan to build on your strengths, using them to their full potential.
- Plan to reduce your weaknesses, either by minimising the risk they represent, or making changes to overcome them.
- Make the most of all your opportunities and try to turn threats into opportunities. Try to be proactive, and put plans into place to counter any threats as they arise.
The basic SWOT process is to fill in the four boxes, but the real benefit is to take an overview of everything in each box, in relation to all the other boxes. This comparative analysis will then help link external and internal forces to help your business prosper.
Focusing on a few, limited issues
Don't just focus on the large, obvious issues, you need to consider all issues carefully.
Completing your SWOT analysis on your own
Take advantage of other people's perspective when you complete your SWOT analysis. Distance can often help you to see things more easily, or to be more innovative.
Minimising or downplaying weaknesses and threats
Be honest, open, and clear about those areas where you need to improve or take action.
Using your analysis for too long
Your business environment will be constantly changing so remember a SWOT analysis is a dynamic technique that can be used regularly.
- Business Gateway Scotland – Guide to strategic planning.
- Invest Northern Ireland – Support on developing strategy.
- GOV.UK – Guide to writing a business plan.
- Shell Livewire – Guide to doing a political, economic, socio-cultural, and technological (PEST) analysis.