So you’ve got a brilliant business idea, a new product you’re considering diversifying into, or a new service you’re looking to introduce. You’ve jotted down some ideas, conducted some initial research and maybe even some basic calculations.
But now you’re ready to flesh it out a bit more, and work out exactly how to ensure it will be a success.
Enter, the SWOT analysis. Strengths, Weaknesses, Opportunities, Threats. These four little words have been helping businesses create strategies to distinguish themselves in the marketplace for over 50 years. It’s all too easy to get lost working in the business rather than on the business, which is why this simple but effecting task will provide you with a broader, birds eye view of your business and your position within your industry.
By using this four-part template, you will get a clearer understanding of your strengths and weaknesses and give you insight on how best to move forward.
How to do a SWOT analysis the right way
It’s important you get the right people involved when you sit down to do your SWOT analysis. Ideally founders, managers and senior team members should be part of the discussion, but it is also beneficial to have a range of people who have a different view of the company.
New staff members will see things very differently from the founder, and it’s important to be able to capture all these views.
Equally as important is having people from different departments contributing to the analysis such as product development, marketing and sales.
If you are a small business owner or you work for yourself, then try asking a trusted friend or adviser who knows a bit about your business to be involved in the discussion to help generate extra points of view.
A SWOT analysis should only take an hour or two, so grab a cup of coffee and get started.
Step 1: Find a good template to work with. We’ve created a free SWOT analysis template in Conceptboard that you can use, to help get you started. If you don’t have an account yet, you can sign up for a free account here.
Step 2: For the first five minutes or so, encourage all participants to use the sticky note tool to add all their thoughts onto the virtual board under all four subjects. This ensures all voices and ideas are captured.
Step 3: Now it’s time to group similar ideas, and clarify any points as well as remove all duplicates. If a certain point triggers more ideas, encourage participants to add them to the board. This can be done on Conceptboard by selecting the hand tool and dragging the sticky notes into groups, or clicking on them and hitting delete.
Step 4: Tell all participants they each have five votes that they can allocate to any idea they think should take priority. We recommend using the pen tool with a large pen width to allocate votes by drawing dots on each of your preferred sticky note.
Step 5: Through this voting system, you should now have a clearer idea of the ideas you should be focusing your efforts on. Remember, not every idea requires action. Decide which will benefit your business the most, focusing on your niche or this particular new product. It’s now up to the decision maker to turn this into a list of priorities and a plan of action.
What are the four elements of a SWOT analysis?
What does your business do well? And what specific characteristics give your business an advantage over others in the same category or industry?
These can be general or specific strengths. Don’t think about what your competitors do; think about what YOU do well.
- Do you have loyal customers?
- Do you have robust processes?
- What makes your business unique?
- What factors have helped you succeed so far?
- What special tools or skills do you have?
- Do you have a strong brand reputation?
- Are your staff members talented in one certain area?
- Do you have a real passion for something?
This is the section where you note down any areas that you fall short. What areas of your business need extra work/time/dedication?
This is the time to be brutally honest, as it will certainly help you in the long run!
- What could you improve?
- Do you or your industry face any external criticism?
- What factors lose you sales?
- What vulnerabilities do you have?
- Do you have any staff shortages?
- How strong is your reputation?
- Do you have any budget restrictions?
- Are there any geographical limitations?
What environmental or situational elements can your business use to its advantage?
These are often external factors that are already available, but that you are yet to take advantage of. It can often help to think about the strengths you’ve already listed and then ask yourself whether these could open up any opportunities.
- What interesting trends are you aware of?
- Are there are new technology advancements?
- Are there any social changes such as population or lifestyle changes?
- Are there any local attends or groups you could partner with?
- Are there any trade barriers that have been removed or government grants you could apply for?
- Have there been any changes in your industry recently?
- Are there any opportunities to diversify or branch out into a new direction?
This is the time to think about external threats to your business that could have negative consequences. Threats can be current issues, you are aware of such as a new competitor or more overarching issues such as legislative changes.
- What obstacles do you face?
- What are your competitors doing?
- Are quality standards or specifications for your job, products or services changing?
- Is changing technology threatening your position?
- Do you have debt or cash-flow problems?
- Could any of your weaknesses seriously threaten your business?
What to do with the results?
Once you’ve finished filling out your SWOT analysis, you should consolidate the most important priorities and start building them into a plan. It’s important to note any areas of crossover and see whether a threat could be overcome using a current strength. For example: A new piece of technology is taking over the market, but you already have a staff member who knows how to use this technology, so they could help train other staff members.
You should now have a much clearer view on where things stand and decide how to move forward.
Your next steps may include a revamped business plan, a launch strategy, or reaching out to an agency for guidance on a specific topic.
The most important thing now is to act while it is fresh in your mind! Your brain will probably be spinning with ideas and strategies, so channel that brainpower into action and business success.