A SWOT analysis can help any business become better, hit goals, find weaknesses, and outline concrete next steps to take.
Anyone who has worked at a business or went to business school has had to learn about the benefits of a SWOT analysis. Generally, they help you look at your business as a whole to figure out its individual strengths and weaknesses so you can make your business better overall. It’s easy to think that you have a complete idea of how your company operates, but by taking the time to go through each step, you’ll get a thorough look into your company.
If you’ve never done a SWOT analysis of your company, this article will walk you through what it is, how you can do one, and what you can learn from it. By the end, you’ll have a complete analysis to help your business run better overall.
What is a SWOT analysis
A SWOT analysis got its name from each of the letters representing a different area to look at for your project or business.
S – Strengths
- What makes your company unique
- What your company excels in
- Assets your company has
- Staff and team
W – Weaknesses
- Areas where your company is not as strong
- Limitations – financially, hiring, space, etc
- No clear measures of progress
- What your competitors do better
O – Opportunities
- Upcoming opportunities
- New demand for your product or service
- Media connections
- Being the first or one of the few in an area
T – Threats
- New laws that threaten your business
- Any PR issues
- Negative press
Generally, it can apply to almost any type of business but it can also extend beyond businesses and apply to individuals, projects, whole departments, or ideas that could be started.
Some businesses break these lists down further into internal and external factors. Doing this can help you see the areas you have control over and the ones you don’t.
For example, let’s say you own a restaurant in an area that has cold winters. The fact that foot traffic slows down during the winter is a weakness, but it’s not something you have complete control over, making it an external factor. However, not having enough staff during the busy months is something you can control, which makes it an internal factor.
This is something you can do after you complete a full SWOT analysis. That way, you can create actionable next steps instead of trying to tackle things you can’t control.
Don’t completely discard everything in the external category. They are still factors you’ll want to keep an eye on and possibly revisit when you do another analysis down the line.
When you need to do a SWOT analysis and the benefit of one
A SWOT analysis can help you determine if a business, project, or individual is working efficiently towards its goals. For example, you could analyze a project to see if it’s hitting the right milestones along the way and what could be improved or where it’s getting stuck.
It’s easy to get caught up in the constant daily grind, which is why it’s essential to take a step back and take a thorough look at your business as a whole.
If you have a business or project that is not meeting goals or deadlines, a SWOT analysis can help you figure out the exact reason why this is happening. Along with figuring out any potential issues in your business, it can also help you identify how you can fix it or avoid them in the future.
After you’ve done a SWOT analysis, you’ll be able to set better goals or adjust the areas that are preventing you from hitting them. Once you’re done, you should have a clear outline of the strengths and weaknesses, goals to pursue, and what areas to improve on.
A SWOT analysis can work for multiple areas, too, such as a project, department, or individual.
What you’ll need to do a SWOT analysis
Depending on what you want to analyze, there are some things you’ll need to gather before you start.
Ideally, you’ll do it with a team of people who can help each other see each category from their own angle. It can be done solo, but it’s much easier in a group.
Here are some ideas for what you’ll need to bring before doing a full analysis:
- Customer/client reviews – this can give you ideas into what customers like and dislike about your company.
- Employee thoughts/reviews – knowing what your employees think about your business or project can help direct each of the SWOT analyses as well. This is particularly helpful if you have a large company where not every employee can attend the meeting but you still need their input.
- Brand or project mission statement.
- Benchmarks, deadlines, and goals.
- A list of competitors.
- Any past SWOT analysis.
- Any data that would contribute to your analysis.
- Writing materials, dry erase boards, digital checklists, or anything that will help you keep track of every point mentioned during the analysis.
How to start
The best way to start doing a SWOT analysis is to go through each of the categories one at a time. A tip to organize your list as you go is to not only include internal/external factors, but also to label things by priority or impact.
For most people, this is one of the easier parts to identify and start to outline. Here are some questions you’ll want to ask to get a list of strengths:
- Where does your company excel?
- What awards has your company won?
- What positive traits do your customers or clients mention?
- What factors make your employees the happiest?
- What makes your company unique / your unique selling proposition?
- What can your company use as leverage?
- Do you have a large budget / cash flow / a company you’ve partnered with?
- What is your company known for?
- Where is your company exceeding expectations?
Most of the questions for the strengths can be used in reverse for the weaknesses. A good majority of these weaknesses might be out of your control, but it’s good to take a look at them anyway. These are some you might want to ask:
- What are complaints you hear from customers or in reviews about your company?
- What makes your employees unhappy?
- Do you have any financial weaknesses?
- What are your competitors doing better?
- Is your brand or project new?
- Does your company have a good reputation?
- Do you have a high turnover rate?
- What obstacles are in the way of hitting goals?
- What prevented your company from growing in the past?
- Where is your business doing better than your budget / workforce can keep up with?
- What needs organization or a better system?
Opportunities can be fun for a team to discuss because this is generally where a lot of brainstorming and future ideas will be discussed.
- What are some new ways to hit future goals?
- What companies or people could you partner with?
- Who could you hire that could help your company or project grow?
- How could you increase sales?
- What influencers could you work with or events you could attend?
- Could you offer a new product or service?
- What are some tools or systems you could implement?
Threats are similar to weaknesses due to their potential or already negative impact on your company. These are sometimes factors outside of your control, too, but by keeping an eye on them and discussing them with your team, you can help mitigate the future damage.
- What are your competitors doing?
- Have there been new laws passed that impact your industry?
- Has the market changed?
- Do external factors like weather have an impact?
- Do you have a backup supplier?
- Is your website fully secure?
- Are all of your employees up to date on the latest security software and steps?
What to do with all your SWOT information
Now that you have all four categories outlined, it might be overwhelming to look at. Writing everything out is simply the first half of the process. Now, you need to look at everything and put it into some kind of working order.
For your strengths, look through them all and make sure you have everything necessary to maximize these to their fullest potential. If that means hiring more people to make each one of them grow, then that’s something you’ll have to list as an action step.
For your weaknesses, look at how many of them you can help change or prevent any future damage. See if you can bring on more people, move a budget around, use a new technology, or anything else to transform your weaknesses into opportunities.
For your opportunities, you want to make sure you have a quick action plan to get the ball rolling on the most essential ones. Always try to grab opportunities when the time is right, so make sure you label them by time and priority. These are where a large majority of your focus and action steps should come from. Opportunities are where you’ll play offense and threats are where you’ll play defense.
For your threats, they are mostly things you’ll want to take care of soon and things to keep an eye on. They may require more research to understand how they will impact your company
You’ll also want to spend time combining each area. How can your strengths help your opportunities? Do you have any threats that can hurt your strengths? See how each factor can play off another one. You want to make sure you’re maximizing your strengths and opportunities in every way possible and minimizing your weaknesses and threats.
Overall, a SWOT analysis can give you a deeper look into your company along with an action plan. This gives you the ability to grow your company, focus on what matters most instead of aiming for goals that don’t truly move the needy in your business.