As a business owner, you never switch off. There’s always going to be work-related thoughts buzzing around your head. These thoughts can flood in all at once and feel overwhelming at times. It’s crucial you maintain good health while running a company, and a SWOT analysis can help. It’s an excellent tool that will put your mind at ease and give you clear and organized goals. How do you conduct a SWOT analysis with proper example?
How to Execute The Perfect SWOT Analysis (With Examples)
A SWOT analysis gives you a holistic overview of your business. This overview is crucial for growth because if you don’t know where you are in the present, how can you create goals for the future? You don’t have to be at a crossroads or in a crisis to do a SWOT analysis to save your struggling small business. It’s actually something that businesses of all sizes should be revisiting every six to 12 months.
What is a SWOT Analysis?
A SWOT analysis is the process of organizing, analyzing, and acting on your businesses’ strengths, weaknesses, opportunities, and threats (SWOT). Strengths and weaknesses are internal, meaning that you have the capacity to control them. Opportunities and threats are external, meaning that, while you have influence over how your business responds to them, you can not control them.
It’s crucial to differentiate between internal and external when executing your SWOT analysis, as, without this differentiation, it can be difficult to create strategic goals. An example of an external threat might be customers leaving you for a competitor. This would be a particularly large threat for a B2B ecommerce business, as they rely on contracted customers rather than individual sales.
Whilst there’s no way for a business owner to control their customer’s decision, they do have influence over how they choose to react to it and can use methods of customer service to avoid it happening in the first place.
Conducting the Perfect SWOT Analysis
The aim of a SWOT analysis is to create a basis from which you can make strategic changes to improve your business situation. Whether you’re looking to protect your small business or initiate global change, a SWOT analysis is a great tool to use for situational analysis.
The SWOT analysis will assist you in identifying and capitalizing on opportunities while minimizing dangers in order to acquire a competitive advantage over your competitors. A plan like this helps you to understand where your brand is in the industry right now to build a strong brand image.
SWOT First Step
The first step in conducting a SWOT analysis is to gather data or business intelligence both internal and eternal perspectives. Gauging a holistic understanding of your business requires widespread research. For internal factors, i.e., S&W, your employees and customers are the most important people to look to for information. Through conversations, surveys, and interviews, gauge an understanding of your company’s internal operations.
For external factors, i.e., O&T, you will need to research beyond your immediate team and customers. Look for trends that are at various depths of danger. For example, these trends might be impacting businesses locally, nationally, or globally. Hone in on specific happenings within your industry. Do this by checking national reports and assessing what affects your competition.
SWOT Second Step
The second step in executing the perfect SWOT analysis is to put your thoughts into a SWOT diagram. This will require selecting a team of people to meet and share thoughts. Go beyond the executives, make your team of people as diverse as possible. Having multiple perspectives contribute to your SWOT diagram will ensure it is well built from all angles.
Here is an example of a simple SWOT diagram for a chicken farm business:
Aim to list around 10 bullet points under each section. Having the table fit in one space is crucial to get a well-rounded view of your business. If your SWOT diagram is looking too busy, group certain points together. For example, if you have “great customer reviews” and “hold on to long-standing customers” in your strengths section, summarize them by saying “good reputation with customers.”
Questions While Conducting a SWOT Analysis
To help brainstorm and get the ideas flowing, here are a few questions to ask yourself whilst conducting a SWOT analysis:
- What are some of the advantages of your products and services?
- What experience do you have in the business?
- What are the advantages of your geographical location?
- Do you need to expand your team to gain a depth of experience?
- Are there any financial disadvantages to your business?
- What are some bad customer experiences you have had?
- Are there any partnerships you could invest more money in?
- How could technological innovation impact your business for the better?
- Are there any political changes that open opportunities for your business?
- What would happen if we lost a partner?
- Are there new competitors entering your industry?
- What imposed policies are going to affect the long-term costs of your business?
How to Use Your SWOT Analysis
Now that you have the perfect SWOT diagram, it’s time to put it to good use. The first thing to know is that the internal factors, i.e., S&W, are present, controllable factors. The external factors, i.e., T&O, are things you can prepare for when considering the future and are generally considered uncontrollable factors.
When compared and contrasted with opportunities and threats, strengths and weaknesses provide valuable information about the struggling business‘ state and potential. Situational analysis adds value by bringing all of this information together and assisting the organization in evaluating and prioritizing essential concerns.
To understand the potential uses and actions to take from your analysis, think of SWOT like this:
Things you can bump up. For example, if your company culture is a strength, could you integrate it into your marketing strategy?
Pick the most urgent and act on that first. If one of your weaknesses was productivity speed, and another was communication in work force management (WFM), you would address these WFM issues first. This is because a cohesive WFM leads to higher levels of productivity.
Capitalize on Opportunities
Prioritize the most tangible opportunity. It’s the first step in seizing one. An opportunity may relate to technological advancement. In 2021, 2.14 billion people were expected to buy goods and services online, compared to 1.66 billion in 2016. From this research, you may consider investing in the best digital marketing tools to suit the needs of growing digital buyers.
Respond to Threats
All you can do is be aware of your threats and prepare for a response to them. For example, if you notice a competitor’s post on social media receives a negative response from customers, you can analyze what went wrong and avoid making the same mistake.
Execute The Perfect SWOT Analysis
After all your hard work doing a perfect SWOT analysis, don’t let it sit there and look pretty. You need to use your findings to create actionable initiatives and goals. A SWOT analysis is a great tool that has the capacity to increase your business productivity. Use your SWOT learnings today to make changes that will benefit your business in the future!