SWOT analysis it is the easiest model for the strategic planning, that will enable you to examine your business internal and external environment, whether its a start up or an established one.
Not only it allows you to explore the present performance of your company, but it also can give you valuable insight into its account in coming months or even years.
Being an entrepreneur, small business owner or starting your own business is not simple or easy. It requires hard work and planning.
There are so many tools out there that you can use for planning, but the easiest one to apply fast and efficient is called SWOT analysis.
In order for your business to get started, and stay ahead of the competition, you need to know what you market need and want and how you can serve it better
To make your business successful in the long run, one must look at their operations from a broader perspective, you can call this strategy.
What Is SWOT Analysis?
To put it merely, SWOT acronym stands for:
• S - Strengths
• W - Weaknesses
• O - Opportunities
• T - Threats
In a few words, a SWOT analysis will list all the plus and minus points of your business.
It will help you to identify its strengths, weaknesses, opportunities, and strengths from internal and external viewpoints.
It does not involve complicated calculations; on the contrary, it is a beneficial to-do list that conditions you to think about your online business's future.
According to the SWOT analysis, a business's strengths and weaknesses are the internal factors that arise from within the system.
In contrast, the opportunities and threats are external factors that occur from the surrounding of your business.
The strengths and weaknesses shed light on your business's presence, while the opportunities and threats target the future, i.e., what could happen in the future?
As a business owner, or manager, you can control the strengths and weaknesses, while it can be challenging, but with effort, you can overcome them.
Examples of the strengths and weaknesses of an online business
• Product or service quality
• Product or service price
• List of Customers
• Marketing strategy
• Your personal or team’s strengths
• Intellectual assets (copyrights, trademarks, and patents, etc.)
• Capital and funds
Do not worry about be accurate, its up to you to decide as to what you believe are your strengths and weaknesses during the analysis process.
Opportunities and threats are external factors that are usually out of your control.
One can try to navigate them or influence them positively, but they are beyond your power at the end of the day.
Some examples are:
• Commerce regulations
• Size of the market
• Current trends
• Climatic conditions
Every Businessman or Entrepreneur Should Do A SWOT Analysis
Whether you are launching a new service or product or already running a successful business, we highly recommend taking the SWOT analysis for your strategic planning.
If you need financing for your business, then it should be included in the business plan.
Businesses that are established and already running must perform a SWOT analysis every year. It will give you the following advantages:
• The smooth running of established business
• Timely anticipation of problems
• Make improvements and changes
• Make an advantageous business moves throughout the year
• It helps to detect the pulse of your customers and the industry as a whole
Steps To Conduct A SWOT Analysis
There is no objective or scientific way to perform a SWOT analysis or measure how well to do one.
It all depends on your observation and how well you can recall all the local and foreign factors which can affect your business.
It is more about the right planning than making accurate predictions which is impossible in the long run..
Step 1: Peek The Right People
The first ingredient you will need is to peek the right people in your team. Yes, its not common for most entrepreneurs to have a team to support them with business operations.
It is crucial to collect different opinions from people who possess diverse expertise in their field in order to have the resources to make informed decisions
Having valuable input will benefit your business even if it means asking for it from people who do not necessarily understand your business thoroughly, friends, family or even customers.
This input will only make your business stronger and provide valuable insight.
Step 2: Brainstorm And Analyse
Once you have finalized the brainstorming team, sit down and exchange ideas will everyone involved. Listen everything and don’t just pick people who will agree all the time.
If you have a small group to brainstorm, you can list the strengths, weaknesses, opportunities, and threats together.
If you are lucky and your team is more prominent, you can ask each team member to make individual lists and submit them.
At this stage, you must include everything that pops up for each category. Don't miss out on anything, no matter how insignificant it might seem.
Step 3: Start Filling In The Gaps
You must have four big lists now, after exhausting everyone's ideas. Fill in the gaps where more information is required.
Take this opportunity to ask your team all the specific questions to determine each item's importance on the list.
Every group member must choose three top items in each category. A pattern will form in a short time, pointing out the things you should focus on for success.
It can be only you, too, working on the SWOT analysis. As you are personally involved in every step of your business, you are the best person to have insight into its running.
You know everything, or at least more than the beginning of planning, which is essential and can impact it to become successful.
Some Helpful Questions To Get The Ball Rolling
Working solo or in a group, brainstorming can be challenging. Here are some helpful questions that can get you started.
We recommend giving them a try, add yours or delete irrelevant ones, so you do not miss out on any crucial details.
Strengths are the local, strong points of your business that affect its performance. They are usually constant, but you can control them to some extent:
• Things we are good at doing?
• What things can we do better than our competitors?
• What factors give us a competitive edge?
• What can we do that nobody else does?
• What are the main advantages that we possess?
• What are our company's best resources?
• What benefits do our employees offer?
• Which are the most valuable assets of our online company?
• What are our customer's favourite things about our services?
They are the negative and local factors that affect the performance of your business. They can be constant, but you can control them to some extent:
• What are our weaknesses?
• What advantages do our competitors have over us?
• What is the most common complaint of our customers?
• What is the main disadvantage of our team?
• What holds us back?
• What resources do we not have?
• Which areas do we need to improve on in our business?
Opportunities are the foreign factors that positively impact a business. They are mostly beyond your control, but they can be used to your advantage with some planning:
• What changes can benefit our online business?
• Will the changing market help us?
• How will the current economy prove to be beneficial to us?
• What opportunities must we tap in to boost our business?
• What new options are available to us?
• Is the cost of our goods declining?
• How can we acquire and integrate useful resources that will boost our business?
Threats, as the name suggests, are the external or foreign factors that negatively affect your business.
Mostly they are beyond anyone's control but, a timely contingency strategy can help neutralize the damage:
• With whom do we face the most competition?
• Which new enterprises in the market can pose a threat to our profit?
• Is the size of our demand on the downfall side?
• Will the latest changes in the market affect our online business negatively?
• Are our goods and services becoming expensive?
• Is the supply chain we are dependent on becoming scarce?
• Will the new laws or regulations impact our business negatively?
• How reliable or unreliable is our manufacturer?
How To Use Your SWOT Analysis Effectively
Those who own a business, often go through the constant, frequent, and inevitable dilemma of choosing what to give your attention and resource allocation.
Despite whatever level of success your business is on; this dilemma will remain.
It is where SWOT Analysis comes to the rescue when facing such difficulties; its job is to help make such decisions with more ease and accuracy.
Narrow Your Lists
What you need to do is to start narrowing down the lists which got made by using pointers from your brainstorming session till they fit on just a page.
Next, you will have to narrow down the prepared list to two things, how influential a specific factor is, and the chances of it taking place.
Even after the page-long matrix has been made, it is a wise choice to preserve the uncondensed list still.
Even if the main focus is not that list, you should keep it around to ensure nothing will be left out if it becomes critical in the future.
At this stage you have to create a strategy for whatever is on the final list.
That, will enable the exploitation of any advantages and disadvantages, and manage any potential weaknesses and threats it might possess.
The prepared strategies need not be too detailed and clear for anyone involved, especially for those ones that you get put into practice first.
Check these powerful tools as well...
We have also prepared two more simple tools to help you managing your online business.
Read here about the one page marketing plan, a useful and simple to use tool of how to prepare a marketing road map.
Download the free template for one page marketing plan here and use it as many times as you want it.
Finally you can read more about the AIDA model, here. A unique, powerful and easy to use tool for your marketing communications needs.
This tool is used from all medium and big sizes organizations and business worldwide due to simplicity and effectiveness.
Download the free template for AIDA model here and use it as many times as you want it.
In conclusion, SWOT analysis is an easy but extremely powerful tool if you want to achieve your goals in a structured step by step way.
This model is so powerful that you can conducted as a quick exercise while having your morning coffee.
Believe me, you will find at least one or two aha moments about creative ways to improve your strengths or manage better some weaknesses.
Having completed this analysis you will be able to have a crystal clear insight on what works well for you and what you need to be fixed or edited.
We have added a free SWOT analysis checklist which you can downloaded here for free.
It will help you to have a ‘visual’ assistant which will assist you to customise this plan according to your needs.