No matter what stage your business is at, a SWOT analysis can help you strategize and develop your business plan.
Why? A SWOT analysis is a compilation of your company’s strengths, weaknesses, opportunities and threats.
It may seem like it’s a way to figure out what you already know, but if done correctly, a SWOT analysis can help you to look at your business for different perspectives. To achieve the maximum benefits from this strategizing session, gather as diverse of a group of employees as you can to help enrich the discussion. Ask people from sales, marketing, accounting, buying/product development, IT and every other department too so that all corners of your business are represented.
By listening to how each department is performing, you can discover ways leverage the strengths, weaknesses, opportunities and threats that exist in your market.
Business SWOT Analysis
The SWOT analysis is an opportunity to look not only at yourself but at your competitors as well. It can be a way to get strategy brainstorming going or a more serious strategy formation tool.
Strengths and weaknesses are often internal to your organization, while opportunities and threats generally relate to external factors. For this reason, SWOT can be used interchangeably with Internal-External Analysis.
Here are some questions you should ask about your business when examining the Strengths, Weaknesses, Opportunities and Threats of your business.
What advantages does your organization have?
What business processes are successful?
What do you do better than anyone else?
What unique or lowest-cost resources can you draw upon that others can’t?
What advantages do you have over your competition?
What is your organization’s Unique Selling Proposition (USP)?
What assets do you have in your team, such as knowledge, education, network, skills, and reputation?
What physical assets do you have, such as customers, equipment, technology, cash, and patents?
What could you improve?
What should you avoid?
What factors lose you sales?
Are your competitors doing any better than you?
What business processes need improvement?
Are there tangible assets that your company needs, such as money or equipment?
Are there gaps on your team?
Is your location ideal for your success?
Is your market growing and are there trends that will encourage people to buy more of what you are selling?
What good opportunities can you spot?
What interesting trends are you aware of?
Does anyone on the team have a talent or connection you can utilize?
Is there a high-cost opportunity that would require a loan or outside funding to achieve?
Are there changes in technology and markets you can leverage?
Are there changes in social patterns, population profiles, lifestyle changes?
Are there upcoming events that your company may be able to take advantage of to grow the business?
Are there changes to regulations that might impact your company positively?
What obstacles do you face?
What are your competitors doing?
Are more competitors entering the market?
Are quality standards or specifications for your job, products or services changing?
Is changing technology threatening your position?
Do you have bad debt or cash-flow problems?
Could any of your weaknesses seriously threaten your business?
Will suppliers always be able to supply the raw materials you need at the prices you need?
Is consumer behavior changing in a way that could negatively impact your business?
Are there market trends that could become a threat?
Hint: When looking at opportunities, look at your strengths and ask yourself whether these open up any opportunities. Alternatively, look at your weaknesses and ask yourself if eliminating them could open up any opportunities. When you find a threat or weakness that could have major repercussions, deal with it immediately or put a contingency plan in place. Ultimately, protecting from losses is more important than striving for growth when thinking short term.