A SWOT (strengths, weaknesses, opportunities, threats) analysis is an incredibly useful business planning technique that helps you to evaluate your business and build a roadmap for moving forward. At its core, a SWOT analysis seeks to understand your business’ unique place in the market and what options it has for growth.
It’s a great method for minimising risk factors and maximising positive ones that are associated with your objective or current project. It also gives powerful insight into the fundamentals of your business and what aspects of them may need to change.
Let’s take a look at how to perform a SWOT analysis for your business.
Analyse your strengths
This is where you list all of the positive aspects of your business that are helping it such as having a great store location or highly trained employees. These factors are actively adding value to your business and are beneficial to whatever objective your SWOT analysis is being built for.
Analyse your weaknesses
While admitting weakness can be hard for some, it’s essential to be open and honest about where your business is failing so that you can correct it. Examples of weaknesses could be a bottleneck in your logistics or a lack of market share.
You need to make sure that you attempt to address all of these weaknesses or at least as many of them as you can before you move forward. If you come back in a year’s time you should notice that your weaknesses will have changed as your business progresses.
Analyse your opportunities
Now it’s time to take note of the potential opportunities for your business. These are not definite outcomes but are things that your business can potentially take advantage of in order to reach its goals.
Opportunities for your business could be anything from new technology to a change in government; all that matters is that they provide a means of reaching or improving on your goals.
Analyse your threats
The final part of your SWOT analysis is to identify the threats that your business faces. Think of theses as negative opportunities that would detract from your business goals if they became realised.
A threat could be a new competitor entering the market or a change in the law that affects how your business can operate. Threats are not necessarily things you can always overcome, but identifying them is nonetheless crucial in helping mitigate their effects.