What Does A SWOT Analysis Include?
1. Strengths
Start with something positive! Take a look at your business strengths. What advantages do you have over the competition?
To help answer this section without missing something important, try to ask yourself these questions:
- What is unique about your organisation and/or product or service?
- How does this give you an advantage in the market?
- What makes customers choose you over someone else?
- What are the cost-effective systems you have in place to maximise profit against resources?
Remember to take a look at your strengths from three angles: your internal perspective, that of your biggest competitor, and the view of your customers.
2. Weaknesses
Nobody likes to point out their faults, but it’s essential to business survival to continually assess and address your weakest points if you’re going to survive.
Your weaknesses are something your competitors can take advantage of (imagine their SWOT analysis – what makes THEM unique against you?), so it’s vital to know where improvement is required.
Ask yourself:
- How could customers view your offering as less suitable/valuable than a competitor?
- What internal processes need improvement?
- What characteristics does your business have that need addressing? (For example, do you have a culture of too many meetings, or could some people be remote workers to save on resources and draw a greater talent pool?)
- What factors make you lose sales? Consider every stage of the sales funnel for this.
Your weaknesses can be turned around, if you look at them objectively and understand where improvement can be prioritised. For example, if you realise that you lose sales because your staff are inexperienced at closing, it’s time to invest in some coaching.
3. Opportunities
This part counts so much towards future-proofing your business. Identifying opportunities should be a constant part of your day-to-day business tasks, and can be done as simply as making time to read industry press and local news.
Before looking at external opportunities, read back over your strengths. Is there anything here that opens up possibilities for new opportunities? Perhaps you have a unique eco-friendly product that solves business problems as well as helps the environment. Is this patented? If not, consider doing so – you could make revenue from leasing the rights out, or from being the sole manufacturer.
Things to consider when looking at opportunities include:
- Latest industry trends
- Changes to legislation either in your own country or one in which you operate (or would consider operating in at some point)
- Events, conferences, trade shows, and expos that you could attend or apply for a speaking slot
- Developments in technology that affect your industry or product offering
- Changes in buyer behaviour (such as the shift from broadcast advertising to social selling seen over the last decade).
4. Threats
A threat is specifically an external factor which could negatively impact on your business. For example, if a competitor launches a very similar product or service in your local area, that is considered a threat as customers may choose the competitor over you.
Other threats can be on a larger scale, such as the financial markets. While you can’t prevent changes to these threats, by identifying them you can find ways to mitigate the risk.
For example, if your business relies on the production of a certain chemical, and the price of this goes up, work out how you could combat the impact this has on your business. Do your existing prices have a built-in buffer for this situation? Is there any way your business could absorb such price hikes – or would you need to restructure your pricing and pass raises on to customers, and how would this affect your business success?
Other threats could include bad media coverage. Whether there is a legitimate reason for it (such as a company failing leading to a settlement over a lawsuit) or a disgruntled customer or ex-employee spouting off on social media, have an action plan in place.
Ensuring your staff know that nobody is ever to comment to the media for any reason is a good place to start! Appoint only one or two spokespeople and ensure they are fully briefed and statements are reviewed before release. Handling grumpy customers on social media is easier, but does involve additional staff training to make sure they turn around any negative situations into positives.
A SWOT analysis doesn’t have to be incredibly lengthy, but the more detailed it is, the more prepared you are for the future. It’s a great tool to use to direct your business strategies, and will help you to identify how to continue business growth even in times of adversity.
We know you’ll face plenty of challenges running your own business, so to help you out we’ve created a SWOT analysis template that you can download for free! To claim your free download, click the button below.
