How to carry out a SWOT analysis to benefit your business

When growing a business, it can be difficult to figure out how to move to the next level of growth while in the thick of the day-to-day operations. SWOT analysis encourages you to take a step back and think strategically about what exactly your business does and the environment your business is in.

What is a SWOT analysis?

‘SWOT’ stands for ‘Strengths, Weaknesses, Opportunities and Threats’. In essence, a SWOT analysis is a strategic tool that helps you figure out your:

• Strengths: what you’re doing well and can capitalize on,, 
• Weaknesses: what you’re doing poorly or can improve,  
• Opportunities: what you could also be doing, and 
• Threats: what your competitors are doing. 

That information gives you the clarity you need to figure out how to grow your business.

What does a SWOT analysis look like?

SWOT analyses are typically laid out in a matrix split into four quadrants, as in the image below. Two of the factors are internal, that is, they are about your business itself. The other two are external – they’re about the market you’re working in. In each case, one is positive (helpful) and one is negative (harmful).

How to do a SWOT analysis on your business

1. Internal factors

Your company is as unique as you are. It does some things amazingly well – or you wouldn’t have gotten this far. But let’s be honest, in some places there’s, no doubt, room for improvement. This part of the SWOT analysis looks at the factors which are within your control: the internal environment of your company. 

a. Strengths

Your strengths are all about what sets your business apart from the competition. The goal here is to figure out what you do outstandingly well, so that you can do more of it.
Strengths to consider include: 

• A unique or outstanding process, product, or service
• A unique or outstanding piece of technology 
• A strong brand reputation
• A loyal customer base
• Talented individuals or an experienced team

It can be difficult to be objective, but try to be honest. If you’re not sure where your strengths lie, read through positive reviews and feedback and keep an eye out for issues which occur frequently. 

b. Weaknesses

Next consider what you’re not so good at. It’s important to find the root cause of weaknesses so that you can tackle them head-on. Simply eliminating weaknesses can often give your company a boost by itself, before any new improvements are made. Common weaknesses include: 

• Processes, products or services that fall short of those offered by your competitors
• Outdated technology
• Limited brand recognition
• Unhappy customers
• High staff turnover

Look for recurring criticisms in your customer feedback to identify areas where you might be able to do better. It’s good business practice to ask customers for their opinion of your business after they make a purchase.

2. External factors

The world is changing rapidly, and business practices are changing with it. In this dynamic environment, businesses need to adapt constantly if they want to thrive. That’s why the SWOT analysis also encourages you to take a look at factors out in the wider world which might be good or bad for your business. 

c. Opportunities

This is the place to consider the positive changes in the wider world that might be good for your business, and how you can take advantage of them. 

Some factors to consider might be: 

• New technologies that can take your product or service to the next level. SMB SaaS software, such as Payoneer, makes it even easier to manage a small business. 
• Market trends: are there new ways of doing things that you can capitalize on? 
• Competitor failure: Have gaps opened up in the market that you can exploit? 
• Partnerships: is there anyone out there you can partner with to take your business offering to the next level? 
• Diversification: is there an adjacent product or service that compliments your own which you could also offer? 

Plan ways to take advantage of these opportunities, like designing new products moving into a new sector, or researching the benefits of new technologies. 

d. Threats

Finally, consider the external changes that may negatively impact your business. It’s important to be on the lookout for growing threats so that you can prepare for them in advance. You may even find that you can turn threats into opportunities if you’re prepared enough. Threats to consider might include: 

• New technologies that make your product, service, or even whole business redundant.
• Changing customer expectations. 
• Competitors: what are they doing that might negatively impact your business? 
• Economic factors: are there trends that might affect your business? 
• Regulation: are there any new regulations that might affect you? 

Now you can work out how to deal with these threats. Do you need to adapt your product or service, or hire a new member of staff? Whatever it may be, deal with it before the threat bites into your bottom line.

Use SWOT analysis to drive business growth

Now you have your SWOT analysis, you can map a pathway to success. Root out and fix up any weak spots, and double down on the things you’re doing well to maximize success. That will give you a solid foundation from which to navigate the wider landscape as it shifts and changes, taking advantage of opportunities as they come along, while side-stepping the threats. 

It’s a good idea to repeat this exercise regularly so that you’re always one step ahead of the competition and can grow your business in any climate.

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