A SWOT analysis can be a very quick and useful analysis of where your business or entrepreneurial idea sits in the present market and can focus you on what your main selling points are. It also shows you what needs a bit more work! But for many, there is confusion over what information goes where in the framework. That is why we have decided to make a ‘SWOT analysis made easy’ guide that we hope will clarify the process, increase your confidence and help to give your business ideas that extra boost they need to take off! Remember: it doesn’t need to be perfect but it does need to be done!
A quick bit of SWOT analysis background
This form of business analysis is not a new concept. In fact it is widely accepted that the SWOT analysis has been around since the 1960 and is attributed to the work of Albert Humphrey at the Stanford Research Institute. Despite it being a relatively old framework, its longevity and continued use in the business world is due to its simplicity and its vast applicability across sectors. And it’s not just for business, it can be applied to many different areas of life in general.
What does SWOT stand for?
S – Strengths
In short, your strengths are the differentiators of your business. What gives you your unique advantage and how you communicate that. This could be your own personal capabilities and personality, a product that no one else in your region can offer.
W – Weaknesses
The opposite of your strengths. You have just identified why you and your business idea are brilliant, now in this section you have to be ruthless. What could you improve on? Is there an internal process that slows down communication or do you lack a skill that, although isn’t crucial to your business, leaves a gap that needs filling? These are your weaknesses. But don’t be disheartened, a weakness means a place for potential growth and greater success. View it as a success waiting to happen rather than a failure.
O – Opportunities
The world changes at the speed of light and daily we see new technologies and innovations (to keep up to date with all the developments, sign up to Flowerista’s newsletter to receive a weekly rundown of the top digital news). These changes can benefit you and your business in many ways, the key is to identify which ones are going to be of use to you, why they will be progressive and how you will utilise them. It’s no small task, but very beneficial for future-proofing yourself!
T – Threats
Yes that sounds concerning but don’t be afraid! Threats are completely out of your control. They could be changes to the economic situation of your region, they could be new entries into the market that you are in, it could even be something as unpredictable as a pandemic. It might seem impossible to predict but, once again, keeping an eye on the news and what political policies might affect you will allow for contingency planning and a chance for you to be, if not ahead of the curve, at least in a more stable position to weather, big economic shifts or major world events. And of course, any threat can be turned into an opportunity, it just depends on your point of view!
IMPORTANT: Strengths and Weaknesses apply to you and your business. Anything internal and anything that you do. Opportunities and Threats are external elements that you can’t control but that you need to be aware of. You don’t exist in a vacuum so keeping an eye on what’s happening around you is wise.
How to create your own SWOT analysis
Whether you are a solo entrepreneur, a freelancer or a company with several employees, a SWOT analysis is for you and can be done as quickly, or slowly as you want. However, we would recommend designating some time without other distractions to focus on this. If you work alone, the potential for you to be too close and involved in your market offering is high, so finding a trusted person to give you a hand would be a good idea. They might be able to see something that you can’t.
Setting up a SWOT analysis framework is easy: take a large sheet of paper or online document (plenty of templates can be found online too and links to these can be found at the end of the post) set up the four columns and ask yourself, without (too much) judgement and with objectivity the following questions:
What do I/we know how to do well?
Which characteristics distinguish me/us from others?
What is the knowhow and what are the capabilities that I/we have that are vital to what I/we do?
What are the intangible assets (such as intellectual property and technology) that are available to me/us?
You will find that these four questions alone give you a very strong basis to work from and plenty of positivity to boost you for the next sections.
What do I/we lack? This could be tangible or intangible assets such as graphic design skills or a stable studio space.
What are the resources that limit us? And why are they limited? Is there a way to improve this? Often the answer is ‘financial limitations’, but limiting factors could include time, space or anything else that you see as a limitation rather than something you lack entirely.
What activities do my/our competitors do better than me/us?
Is our unique selling point clear? Do I need to explain it in great depth and will this be a barrier for potential customers?
Do not be discouraged. Once a weakness is identified, it can become an area of potential growth. You can’t solve a problem if you don’t know about it, but once it’s there on paper in front of you, you can start to create an action plan and, when you revisit your SWOT analysis in the future, you will have data to show progression and development.
What are the underserved market segments that you could provide for?
Are there changing needs of your clients or potential clients that you could meet with your offerings?
Is there scarce competition in a particular geographical location that you are able to fill?
Where can you gain positive media exposure and how will you obtain it?
Who are the new emerging competitors in your field? Consider competitors of all sizes. You might be able to fulfil a service in a more personalised way than larger companies can or find a partnership with a competitor that benefits you both. Coopertition is always an interesting way to combat a potential threat.
What are the legislative and political changes that might affect you? Unless you are also a lawmaker, the likelihood is that you have no control over policy other than if you are able to vote in the region where your business is based. The most important thing you can do is be aware of the current and changing situations and, if necessary, find trusted legal advice. It might sound scary but the key is to stay informed.
Has there been any negative media exposure? This doesn’t necessarily have to be about you in particular. It could be that a service you use has been caught up in some controversy. If it is directly aimed at you, try to approach it with gentleness. Speak to the person giving you the negative review, see what can be done and work to resolve the issue as soon as possible. Again seeking trusted legal advice may be necessary but, there is an English saying that ‘all publicity is good publicity’. Even negative exposure means more people know your brand and this could have the opposite effect to what you expect.
How do I/we respond to natural disasters? The most practical thing you can do is to back up files and make sure you and your business is insured. Don’t cut corners in this aspect because the ‘it won’t happen to me’ mentality is a dangerous game to play.
What to do with your findings?
Once all this is done, the next step is to brainstorm ways to combat weaknesses and threats that are manageable and sustainable for you and those you work with. Once you have a clearer picture, and maybe some outside input, draw up a timeline of how to achieve your goals! Never be afraid to ask for help, you can’t be expected to know and do everything, so a bit of help is an essential.
Finally, repeating this exercise when you feel the need or you start to feel that something isn’t going quite right, is the best way to make sure that you are hitting targets, keeping interest high in what you produce and creating a life for yourself that you want and deserve!
If you want to see more examples of how a SWOT analysis might look for different types of companies, HubSpot has an excellent article here. For more insights into the SWOT analysis process and what it can do for you, Investopedia, Business News Daily and Asana also have great advice!
We hope this guide to SWOT analysis made easy was helpful but if you want to see how to set up, use and put into action a SWOT analysis framework, join us for the next time we play Business’n’Play and be part of the team that gets Jenny closer to her goals and you closer to yours!