How to Perform a SWOT Analysis

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Discover the basic process for conducting a SWOT analysis, and take action to enable your business to achieve its goals now and in years to come.

Have you ever stopped to think about what your strengths and weaknesses are? What about reflecting on opportunities that may be at your fingertips, and the threats that may potentially stop you from grabbing ahold of them? Countless times throughout your life, probably without even knowing it, you’ve performed a personal SWOT analysis. As for your company, there’s no time like the present to dive in and identify its business strengths, weaknesses, and the opportunities and threats both as they pertain to a specific goal and, somewhat similarly, to identify the general health and viability of your overall business at a point in time.

SWOT analysis explained

In the 1960s, Albert S. Humphrey at Stanford University, wanted to understand why some companies fail while others prosper. His research laid the foundation for what we now call a SWOT analysis, and it continues to help businesses thrive in times of need.

SWOT is the acronym for strenghs, weaknesses, opportunities, and threats.

Strengths and opportunities are what you have at your disposal to achieve a particular goal; they are advantages. Internally, they represent positive features of your business and can include dedicated personnel, high-level expertise, and money available for investment. External to your organization, they might encompass a favorable economy, the dissolution of a competitor, or new legislation favoring your industry.

Weaknesses and threats sit at the other end of the spectrum and highlight the impediments to reaching an objective; they are liabilities. Internally, you’re looking at the subpar aspects of your business, such as insufficient funds, adverse legal action, or inexperienced staff. Externally, you want to name the threats that stand in your way—market competition, regulatory changes, and economic downturns are common threats.

Examination of the four elements reveal what your business needs to focus on with regard to a specific goal, and provides you with the framework to move forward with a plan of action.

How to condut a SWOT analysis

Step 1: Gather info

Now that you know what a SWOT analysis is and represents, it’s time to really think about how you’re going to sit down with your team and analyze what makes your business tick. Just like the process of writing a paper in college was about writing too much, and then editing the paper down to the really good stuff, a SWOT analysis works the same way.

Congregate with your team in front of a whiteboard, and list everything working for and against achieving your stated goal. This first step is simply information overload, and if it is to work as intended, there can be no sacred cows when performing a SWOT analysis. Write down all your businesses’ strengths and weaknesses, opportunities and threats with respect to your objective. If assessing its overall well-being, you might ask where your company stands in the past, present, and future? What makes it good, and what areas could be improved upon? Who are our competitors? Where do we see this business going in a year, five years, or ten years from now?

Step 2: Take a step back

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After brainstorming dozens of aspects of your business both internally and externally, it’s time to assess. Take a deep dive to look at what you have listed under each quadrant. Some may be too unrealistic, and others may not be just what the company needs to focus on right now. Regroup and refine the analysis to line up with the mission and values of the company. Ask yourselves, what strengths should be leveraged? What weaknesses need to be eliminated? What opportunities are feasible? What threats can be downplayed?

Step 3: Develop a plan of action

A SWOT analysis means very little if you don’t take action to achieve change. People are often afraid of change and what lies ahead, but if analyzing your business should teach you anything, it should be that change isn’t something to be afraid of. Be the decision-maker, and aim to turn what you’ve discovered into a plan. Everyone has different ideas for how action can be carried out, so harness everyone’s individual ideas to create a successful business plan for moving forward.

To conclude

No business is the same, and exploring what makes your company truly stand out is key to maintaining a successful, thriving business.  Once you understand the strengths that makes you unique, weaknesses that could be improved upon, opportunities you need to work towards, and threats that you face, it makes it all the easier to create an actionable plan.

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