A SWOT analysis is a standard practice among business owners and marketers. Most marketing experts recommend every business conducts a SWOT analysis at some point. It can help you realize areas of growth, and areas where you should protect your business. Doing a SWOT analysis once every six months to a year can be incredibly helpful for the growth of a business. However, many business owners aren’t sure how to do a SWOT analysis, as it can take a lot of work. In this blog post, we explain what a SWOT analysis is and how to do one.
What is a SWOT Analysis?
SWOT stands for strengths, weaknesses, opportunities and threats. A SWOT analysis is the process of evaluating these factors to better understand your business. It is very helpful to get a new perspective on your business to ensure you are doing everything correctly. Conducting this analysis can benefit your marketing efforts, as well as shape your business’ strategies and tactics. Although it may take a while to do a thorough analysis of your business, it is an excellent idea to spend some time on this.
The strength aspect of your analysis is where you focus on where you stand out among your competitors. This is where you highlight the area where you know your business is doing a great job. An example of a strength could be a patent you have over a successful product. Or, it could be your team’s amazing customer service skills. No matter what your strengths are, be sure to write them down.
With your strengths recognized, you can focus on maintaining, and continuing to improve those strengths. After you recognize your strengths, make sure to take steps so as not to lose them. This will help you continue to have leverage over your competitors and to keep giving your customers an incentive to use your services.
Just like how every business has strengths, every business also has weaknesses. Similar to strengths, it is also important to recognize your weaknesses. Take a look at where your competitors are doing great and where you are falling behind. An example of this could be that your competitors have a better selection of products or services. Or, they could have better customer reviews or testimonials. Although it can be challenging to sit down and think about areas where your competitors are stronger than you, it will be very helpful. When you know where your business falls short, you can focus on improving those areas.
Your opportunities are where you look at the future successes of your business. Think about where you can take your business and areas where you can grow. Are there any areas where you can improve your business or your services? Perhaps you could focus on growing clientele in a particular city. Or, you can introduce new and improved products. Additionally, you can look into things where your competitors have not taken advantage of. Anything you can think of that will serve as a great business opportunity should be put down for this area of your analysis.
While you have opportunities, your competitors likely have some great opportunities as well. And other than having strong competitors, there could be other external threats that can negatively impact your business as well. A popular example of this is a recession or food supply shortage happening, and that may affect your business. Or, a new competitor can come to town with better prices than your business’. Unfortunately, every business in a capitalist market has a few threats. But, when you can easily recognize your threats, you can think of ways to overcome them.
Now that you know what each segment of the SWOT analysis means, let’s discuss how to conduct your analysis. There are many ways you can conduct your analysis. Many people will run market reports or take a look at their sales over a period of time when putting their analysis together. Truthfully, it just depends on how thorough and detailed you want your analysis to be. However, most business owners have a great idea of their business’ SWOT details. With that being said, you can make it as detailed as you want it to be.
Step One: Look at Your Business Versus Your Competitors
The first step in your SWOT analysis is to look at your business versus your competitors. As mentioned above, you can look at market reports, your profit from the last quarter or year, or simply the products offered by your competitors. The whole goal of a SWOT analysis is to be more self-aware of your business versus your competitors. So, compare every area of your business and recognize where you excel, and where you could improve.
Step Two: Consider the Future of Your Business
Most business owners have plans for the future for their business. Whether it be adding more products or services, or expanding your business into different ZIP codes, you likely have plans. Mark down these plans for your opportunities section and consider how you can turn them into strengths. Also, be sure to consider the future of your closest competitors versus your business. They likely have plans as well, so be sure to include that into your threats section.
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Step Three: Consider the Future of Your Industry
With the opportunities and threats portion of your SWOT analysis, you should also consider the future of your industry. When you do this, you will better predict the opportunities you can take advantage of with your business. This may look like new industry technology, or it may look like a brand new product. No matter what it is, consider the future of your industry so you can better outline your opportunities and threats.
Your Business’ SWOT Analysis
The way your SWOT analysis looks is completely up to you. If you want it to be incredibly detailed with numbers, then you can do so. Or, if you want it to be just a few bullet points, that works as well. As long as you are able to take an unbiased and outsider perspective of your business, your SWOT analysis is doing its job. If you have someone helping you with your marketing, be sure to share your SWOT analysis with them, as it will be very helpful information.
We hope this blog post helped you to make your SWOT analysis and better your business. If you have any questions about creating your business’ SWOT analysis, feel free to contact us. We can provide marketing consulting and help you figure out where your business is better than competitors and where it can improve.
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