With the economic downturn, many of us have cut back on our business expenditures and reduced our calculated risk-taking in order to maintain the status quo. While this may have helped to keep the business alive, it very likely came with complacency. If you’re ready to break free of the static and blow the doors off of 2010, then it’s time to consider a SWOT analysis.
What is a SWOT Analysis?
A SWOT analysis is a strategic tool that evaluates:
Strengths
The attributes of the organization that are helpful to achieving the objective. Key questions:
- What do you do well?
- What experience do you have?
- What do you offer better than your competitors?
- What services bring in the most money?
Weaknesses
The attributes of the organization that are harmful to achieving the objective. Key questions:
- What areas do you need to improve?
- What resources do you lack?
- Where do you lose money?
Opportunities
The external conditions that are helpful to achieving the objective. Key questions:
- How can you do more for your existing clients?
- How can you use technology to enhance your business?
- Are there new target audiences you have the potential to reach?
Threats
The external conditions which could do damage to the business’s performance. Key questions:
- What obstacles do you face?
- What are your competitors doing that you’re not?
- What’s going on in the economy?
The strengths and weaknesses measure internal factors, while opportunities and threats measure external factors. Each of the four elements combine to help you assess the current placement of your business and develop a plan for moving forward.
The SWOT analysis is typically depicted as a matrix:
Completing the analysis is as simple as dividing a sheet of paper into four quadrants as shown above, asking yourself questions and filling in data in each square.
Tips for a Successful SWOT Analysis
A SWOT analysis is simple and can be very subjective, so it should be completed as part of a larger analysis with other tools. In order to get the most value out of the SWOT analysis and create a solid starting point:
- Be realistic and honest about your strengths and weaknesses
- Keep it short and simple
- Ask for feedback from people outside your company
- Be open-minded and willing to accept constructive criticism
- Avoid over analyzing each element of the matrix
- Be specific
Using the SWOT Data
Once you complete the SWOT analysis, you have identified some of the key issues you can focus on in your business to move forward. Take time to review the results from your analysis and develop a plan by:
- Considering your areas of strength and making a list of ways you can make them even stronger
- Brainstorming ways you can minimize your weaknesses
- Creating measurable goals for each of the opportunities you identified
- Figuring out how you can use your strengths to decrease the threats
The data from the SWOT analysis will give you a big-picture perspective to start your strategic planning process. If you’re ready to take action, use it as a stepping stone to a larger process that will help transform your business.
Alyssa GregoryAlyssa Gregory is a digital and content marketer, small business consultant, and the founder of the Small Business Bonfire — a social, educational and collaborative community for entrepreneurs.
