SWOT like a Pro: How and why to do a SWOT Analysis
If you are in business, you’ve probably heard the term SWOT Analysis. But SWOTs have a tendency to be mysterious or overwhelming, and most business owners, managers, and marketers don’t do them as often as they should. Keep reading, and in no time, you’ll be SWOTing like a pro!
What is a SWOT Analysis?
A SWOT analysis is a useful tool for business owners, managers, or anyone involved in decision-making at any stage of a business. SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. When performing a SWOT analysis, you are looking strategically both internally and externally at your business. In the same way a therapy session with a friend can be helpful by talking through your problems and issues, a SWOT Analysis is helpful because you are putting down on paper the things that are driving you forward and holding you back. Without identifying things like internal weaknesses or external opportunities, you can’t address them and move past them and grow.
A typical SWOT analysis is laid out as a 4-square grid, with Strengths and Weaknesses either in one column or row, and Opportunities and Threats in the other column or row.
S = Strengths
The “S” in SWOT stands for Strengths. Strengths are internal to your business. For instance, a strength may be an expertise or product your business has that others in your industry don’t. Another example may be longevity in the marketplace or 5 star reviews on Google.
W = Weaknesses
The “W” in SWOT stands for Weaknesses. Like strengths, weaknesses are internal to your business. Examples of internal weaknesses might be a small staff, an integral team member who has decided to move on to another job, an off-the-beaten-path location, or other issues that you could potentially overcome.
O = Opportunities
The “O” in SWOT stands for Opportunities. Unlike strengths and weaknesses, opportunities are external to your business. These are things happening externally that present a potential opportunity to your business. An example may be a competitor going out of business, a new technology that you can use to improve your sales or operations, or a newly identified market that you can sell to.
T = Threats
The T in SWOT stands for Threats. Threats are also external to your business. Of all the boxes in your SWOT analysis, threats are the ones you have the least control over. A good example of threats are some of the issues many people are used to dealing with these days, like supply chain problems, transportation slow-downs, pandemics, and a lack of job applicants.
How to do a SWOT Analysis
Now that you know the basics of a SWOT Analysis grid, how do you perform a SWOT Analysis, and what do you do with it?
When performing a SWOT Analysis, for the best results, include more than yourself in the room. Bring in a few top executives in your business, or a few staff members whose opinions you value, or even a mentor or colleague if you are a solopreneur.
Then get down to brainstorming and talking through the four boxes. Discuss and jot down your business’s strengths and weaknesses. Talk through possible opportunities and threats. Write them down in the appropriate grid.
Don’t walk away if you only have one or two items listed in any of the grids. Make sure to dig deep and identify all the strengths and weaknesses, opportunities and threats as you can. Aim for at least four or five per box, more is fine too! Just make sure they are all truly relevant, and that your strengths and weaknesses are only internal, and your opportunities and threats are only external.
Once you feel you have fully explored your SWOT Analysis, what do you do with it? A SWOT Analysis isn’t a sales projection or an annual budget (hard numbers you can work towards and abide by). A SWOT Analysis isn’t a contract or a handbook. It’s a jumping-off point.
Once you have filled in your SWOT grid, you now have the beginnings of a road map for the next phase of your business. Using the SWOT Analysis, make a plan to:
Capitalize on your Strengths
Address your Weaknesses
Maximize your Opportunities
Overcome your Threats
Why and When to Perform a SWOT Analysis
When there’s a change in your business or industry
Many businesses that pivoted during the COVID-19 pandemic did so by starting with a SWOT analysis, identifying what some of their strengths were, and capitalizing on them in this major change in their industry. For instance, clothing stores that saw a dip in sales due to people not working, and therefore not needing new clothes identified the strength that they were set up to make, sell, and ship clothing, and maximized the opportunity that all of a sudden, there was a need and market for face masks. When there is a major shift in your business or industry for whatever reason, be it positive or negative, a SWOT Analysis is a good first step to determining your pathway forward.
When you want to take your business to the next level
Sometimes there isn’t a shift in the marketplace, but you are looking for a shift in your business. Perhaps you want to add a new service, hire new staff, sell a new product, or maybe even enter a new industry. Or, maybe you are at the beginning or end of a business, working through an early business plan or planning for business succession. Take the time to start with a SWOT Analysis so you have your finger on the pulse of your business and can make those decisions with a true understanding of what you have to work with, or maybe even what might be up against you.
You don’t need to do a SWOT Analysis weekly or even monthly. But you also may not be up against any major decisions or shifts in your marketplace over the course of a few years, and if that’s the case, you should still be doing a SWOT Analysis on a regular basis. Plan to do one at least once a year. You may identify a threat you need to pay more attention to, or an opportunity you hadn’t thought much about. It’s a useful tool to help drive your business forward.
A SWOT Analysis is one of the tools we use at Katy Dwyer Design when working with a new client on marketing initiatives. If you’re looking to take your brand or marketing to the next level, consider contacting us today!