What is a SWOT analysis and how do I use what I find?
A SWOT analysis is an overview of your business, identifying strengths, weaknesses, opportunities and threats. Taking time to do it properly, involve the right people and learn from your findings gets business growth off to a great start. In this blog, we consider the question, “what is a SWOT analysis?” and look at how you can use yours to grow your business.
What is a SWOT analysis?
SWOT stands for strengths, weaknesses, opportunities and threats. A SWOT analysis is your opportunity to look at each of these areas in turn, identifying points under each heading for your specific business. Used correctly, it’s a great business development tool.
The strengths and weaknesses should be the good and bad things found within your organisation. They cover matters like personnel, premises, strategy, focus and product quality. Because they take place within your business, you have the power to address them. If you find your business lacks a team member with marketing knowledge, for example, you can either train someone up, recruit or outsource.
Opportunities and threats are the good and the bad things happening outside your organisation. They include local matters like who your competitors are and the character of the area you serve. But they also include huge international concerns like supply chains, wars and global economics. While you cannot control the opportunities and threats themselves, you can control how your business responds to them.
How can I use a SWOT analysis to grow my business?
Once you’ve done your SWOT analysis, the next step is to examine your findings.
Think back to your opinion of your business before you did the SWOT exercise – how accurate were you? If you were right then well done! But if you thought you were doing better than you were, do you need to invest more time in your business or deepen your understanding of how to run it? And if your initial opinion was pessimistic, could some business coaching help you improve your confidence?
Then it’s time to look at each section in turn and note down action points.
Strengths
Strengths won’t necessarily give you many action points. These are things that are already working well. However, it’s important to note that they probably didn’t happen by themselves. If you have a strong team member, for example, think about what you did to recruit them and consider whether you could replicate the process to find another high-calibre employee. Also consider what you might have to do to keep your best team members so they remain a strength of your business.
Weaknesses
Weaknesses are the issues within your organisation that you have the power to control. So if you have identified that you need some new software, for example, you can solve the problem by investing in what you need. Even if you cannot afford it now, seeing the business weakness should help you plan ahead for the future spend.
Opportunities
The list of opportunities should spur you into action too! Maybe you offer customer service training and a new shopping centre is about to open near you – could the retailers become your next clients? Or maybe you run a hotel by the sea – would businesses like to hold conferences there in your low season? You’ve identified the opportunities and now it’s time to act on them.
Threats
Some threats are easier to address than others. Professional bodies representing specific industries may respond to threats on behalf of their members, as happened with the rise in employers’ NI contributions. Joining one of these bodies will strengthen their voice and increase the chances of turning the tide.
Even if you can’t take direct action, identifying threats can help you be more aware of them, and manage how you respond. If, say, prices rise, examine your business and work out if you can make savings in other areas.
The bigger picture
Acting on strengths, weaknesses, opportunities and threats will help you take control, tackle problems head-on and ultimately take your business forward. Incorporate them into your business strategy and goals – they’re your road map to success.
Outsourced business support in your area
If your SWOT analysis has highlighted areas for improvement, Get Ahead can help. And if it’s time to take your business to the next level, take our quiz – reflect on your current processes and gain valuable insights to help your business grow.
