A SWOT Analysis is a structured analysis tool that you can use to identify your business’s Strengths, Weaknesses, Opportunities, and Threats.
The purpose of a SWOT Analysis is to plan out – and then to execute – concrete actions to overcome weaknesses and obstacles, and to vanquish the threats your business faces to its survival.
A SWOT Analysis can be performed in 4 stages:
Stage 1: Create The Brain Trust for Your SWOT Analysis
You should gather employees who have a complete grasp of the key areas internal to your business. These are the people who understand their areas better than anyone else. (This isn’t always the boss)
You should also gather key customers, vendors, and other allies external to your business who know your products and services, who have a good grasp of your market and what you are trying to accomplish, and who can provide an informed, objective viewpoint.
A few days before the meeting, ask each member of your brain trust to collect and review information on your business and on any external factors which they believe can influence your growth and stability – either positively or negatively.
Generate a good competitor analysis, and a thorough customer profile, and gather up at least 6 month’s worth of records on Key Performance Indicators in your business. Each of these sources will be used to prompt ideas during the meeting.
Stage 2: Brainstorm (Perform Divergent Thinking)
A brainstorming session is a meeting where the participants engage in divergent thinking to generate lots of ideas. There are rules, and a particular structure, to follow when running a brainstorming session. You want to ensure that it stays on track and productive.
As the business owner, you must decide whether you have the skills and objectivity to chair this meeting yourself, or whether you should use an external meeting leader. An open and honest atmosphere must be created which avoids judging or disagreeing with brainstorming ideas as they are being generated. And you must try to draw out and record weaknesses and threats to your business – no matter how embarrassing or difficult they may be personally for you to face.
Set aside at least 2 hours or more for the brainstorming session to generate all the information necessary.
During this phase, take each report you brought to the meeting, one at a time, and record all ideas that were generated. Honestly and openly review internal operations (such as finances, business relationships, marketing programs, management and personnel issues, as well as production and distribution processes) to identify your strengths and weaknesses.
Also make sure to review external elements to your business such as your competitors and their offerings, your customers and their feedback, and your suppliers and their value.
Keep it moving and don’t get bogged down. Constantly work to create a productive atmosphere where weaknesses can be identified and recorded. Always remember that judgement and analysis come later during the convergent thinking phase.
Honestly and openly assess your business environment and your market to identify and record opportunities and threats.
Stage 3: Consolidate and Converge the Ideas Identified for Analysis
The purpose of Brainstorming is to generate as much raw material as possible so that it can be analysed into useful and constructive ideas that get things done to benefit your business.
When you feel that the divergent generation of ideas has been exhausted, discuss the ideas that have been raised and organize their common components together. Consolidate the weaknesses together. Crystalize the opportunities exactly. Distill out the threats so that they are not generalized – but very specific and real – so a door can be opened to their handling.
Stage 4: Verify, Assess, Execute & Review
Identify any additional information you need to confirm what you have come up with in your SWOT Analysis. If necessary, carry out further market research and seek outside sources of information to verify that your conclusions are correct.
Draft a report which identifies areas where you have an advantage (or disadvantage), and craft specific, action-oriented projects which can be executed for success.
Create and distribute small, actionable to-do lists with clear end results to key employees to tackle weaknesses, to capitalise on strengths and opportunities, and to deal with the threats that you have identified.
As the business owner, oversee the execution of these action plans from your SWOT analysis. Make sure that your action plans are implemented fully. You should see conditions improve and key performance indicators rise as a result.
If not, there was something missed: Find it.
Use your SWOT Analysis as a review tool before important decisions, so that your decision-making remains informed and effective.
Review as conditions change in your business and on the ground.
If you have any questions on how to perform a SWOT Analysis on your business, contact us.
We can help.