Doing a SWOT analysis for your business is an important step as you enter the New Year. This is because the business environment is continually changing. As such, you must continually adjust to match up with the evolving environment.
Longevity is one of the goals of business. To stand the test of time, your business must take advantage of its strengths and opportunities. It is for this reason that a SWOT analysis comes in handy for your business.
This post will show you how to do a SWOT analysis for your business and why it is important. Without further ado, let’s get to the crux of this post.
Explaining SWOT Analysis
Many entrepreneurs seek SWOT analysis for their businesses without having a clear understanding of what it means. Before we discuss how to do a SWOT analysis, here’s what SWOT analysis means.
SWOT analysis is an acronym that refers to Strengths, Weakness, Opportunities, Threats. From the word “analysis” you can guess that SWOT is always a list. It presents businesses with their internal strengths and weaknesses and compares them to external opportunities and threats.
Most entrepreneurs believe that only businesses that are yet to begin need a SWOT analysis. That’s wrong. Every business should run a SWOT analysis periodically. This enables a business to assess the changes in the business environment so that they can respond proactively. We advise that as your business enters the New Year, you should conduct a SWOT analysis for your business.
How to do a SWOT Analysis
Before we continue, let’s state an important fact. Your SWOT analysis isn’t a scientific experiment. What this implies is that there isn’t a specific way to run a SWOT analysis. Carrying out one should be based on your business, and its efficiency is dependent on your observation abilities.
The earlier you learn that you do this analysis to plan for the future, the better for your business. You may never be able to make accurate predictions. However, you can make intelligent projections that will help your business grow in the New Year. Here are some steps to help you do a SWOT analysis for your business.
Step 1 – Gather your team
It is impossible to get perfect predictions or projections by yourself. You need the help of other individuals working with your business. When conducting this analysis, there isn’t a thing as too many hands.
Business owners and their top-level employees typically make business decisions. The more of these people you have, the better for your business. You need the number to provide as many perspectives as possible.
Are you worried that some members of your team don’t have enough experience? This isn’t a problem when running a SWOT analysis. It helps you to get a broader view of your business. You can go as far as seeking the views of your customers.
Step 2 – Brainstorm
Like we said earlier, SWOT means Strengths, Weaknesses, Opportunities, and Threats. These four are the different categories that you must touch to get a complete analysis. As such, you should make use of the SWOT analysis template.
The opinions of your team members matter. This means that your brainstorming session should be with your team members. If your team is small, then you can work together to list the items under each section. For a larger team, you may need to create questionnaires for your team members.
In creating your questionnaire, you should endeavour to add every category that is required. The different observations aren’t so important at this stage. What matters is that you don’t leave any stone unturned. Work with your team members to write as much as you can down.
Step 3 – Create your final list
You have gathered the opinions of your team members on paper, great job. Now, you are close to completing the SWOT analysis for your business. It is time to ask for explanations and draw your conclusion.
You should also work with your team members at this stage. Every member can present valid points regarding what to add or remove from each category. What if you are working alone? This isn’t a problem as long as you can be sincere with yourself while digging in.
Sample Questions to help complete your SWOT Analysis
When running an analysis for your business, you need to ask as many questions as possible. In this section, we will suggest sample questions to use for each category.
Strengths
These focus on the positive internal factors affecting your business. Here are some questions to ask to help you find your strengths:
· What are you good at?
· Do you do anything better than your competition? What are they?
· Where does your competitive advantage lie?
· What products or services do you have that no one else presents?
· What do your customers like most about your products or services?
Weaknesses
These factors are internal as well. However, they affect your operations and performance negatively.
· What are you bad at?
· Is your competition performing better in any aspects of the business? What are they?
· What do your customers complain about the most?
· How can you improve your business?
Opportunities
These are positive external factors that may affect your business. Usually, they are out of your control, but you can leverage them.
· What regulations could help your business?
· How can economic changes help your business?
· What opportunities haven’t you pursued?
· How can you acquire more resources at affordable prices?
Threats
These are negative external factors that can affect your business. They are also mostly out of your control. However, with a good plan, you can mitigate their effects on your business.
· Who are your current competitors?
· How can new entrants threaten your business?
· Is the size of the target market declining?
· Are the resources you need getting costlier?
Benefits of SWOT Analysis
In rounding up this post, here are some benefits of a SWOT analysis to your business:
· Helps to review your business idea.
· Great for creating a marketing plan.
· Good for drawing up a contingency plan.
· Helps to evaluate your business.