How to conduct a SWOT analysis for your small business
SWOT analysis is a practical way to evaluate your business for better decision-making and growth. It helps you know what you are doing well. What can be improved, and how can you protect your business? A well-conducted SWOT Analysis will consider both internal and environmental factors of your business, some of which you may need more control over. It is crucial to involve your team members to analyse all aspects of the business comprehensively.
You can use SWOT Analysis at different times in your business. It is essential when a big decision is about to be made. Either you are thinking of a new initiative or improving old company policies. If analysed well, the exercise will show you your business scoreboard. It will reveal where your business is performing well and where you need to improve your business operations.
Components of a SWOT analysis
Strengths: These factors make your business stand out from the competition. It might be a solid social media presence, a robust financial balance, or a strong brand identity.
Weaknesses: These are factors that are affecting or have the ability to harm your business. Most times, these factors need your immediate attention and do not make your business perform at its best. It might be a poor social media following, debt or other unfavourable factors.
Opportunities: These are the factors, most times external factors, your business can take advantage of to take it to the next level. An example of such opportunities can be a new government policy.
Threats: These factors can cause potential harm/problems to your business. In most cases, they are factors you don’t have control over. An example might be a rise in the cost of raw materials.
How to Conduct a SWOT analysis
It is good to involve the team members in generating various ideas when conducting a comprehensive SWOT analysis. Here are the steps you need to take to run your analysis. Decide on the goal you want to achieve in conducting the SWOT analysis. So before you run the SWOT Analysis, you have to be clear about the goal you want to achieve. Carry out proper research of every part of your business. You need to know and understand your business, staff, competition and industry. As you will need your findings to conduct the analysis.
- What is your business’s unique selling proposition (USP)?
- What are the things that make your business special?
- How do people remember your business?
- What areas consume a lot of time and money?
- What do your customers dislike about your business?
- What skills do you lack?
- Is there an untapped market you can expand into?
- How can you build a distribution?
- Can you reduce operational costs?
- What competition will you face soon?
- What are the factors that can affect the reputation of your business?
- Is the interest of your target audience changing?
Create a plan to address the issues you discovered in the process above by answering the questions below:
- How can you use your strengths to seize the opportunities you discover?
- How can your strengths nullify the threats listed?
- How can you reduce the listed weaknesses to make good use of the opportunities?
- How can you minimise your weaknesses to address the listed threats?
As a business owner, take time to go through this process with your team and develop strategies for your business growth.