• What is a SWOT analysis

What is a SWOT Analysis?

One of the simplest and most useful tools when first putting together a business plan or a piece of research, The SWOT analysis helps you to narrow down and identify your Strengths, Weaknesses, Opportunities and Threats in order to plan and strategize more efficiently. 

Its main function is to help an organisation look into both itself and the external environment to identify how it can improve and where its strengths lie.

When to use a SWOT Analysis?

The SWOT Analysis is very flexible and can be applied to a whole host of different scenarios such as:

• Exploration of a new product or marketing plan
• Finding out areas to improve your business
• Changing key partners or suppliers
• Expanding the business
• Selecting the channels you use for marketing and communication

Elements of a SWOT Analysis    

So how do you actually do a SWOT Analysis? Simply take your business, product or idea and organise it into four main areas to get a broad but succinct look into how you should proceed. 

Strengths

• Your unique selling points
• What problems you solve for your customers or clients
• Your competitive advantages
• The price point of your product or service
• Quality of product or service compared to wider industry
• Valuable relationships or partnerships

Weaknesses

• Competitors offering lower prices or better quality
• Supply lines
• Financial restrictions and cashflow
• Timescales or deadlines
• Limitations in communication and advertising
• Staff levels
• Reliability of data and market research

Opportunities

• New market developments that go in your favour
• Competitor weaknesses or gaps
• Development of new industry trends
• New innovation and technology
• Better supply lines or new potential partners
• New investment opportunities

Threats

• New legislation that could impact your product or service
• Product or service only has seasonal demand
• Negative or controversial publicity
• Competitors develop rival products or service
• Key staff leaving the business
• Environmental and economic changes

Using the SWOT Analysis           

There’s a lot that goes into business planning and research, so putting the above points into a grid or table format will significantly help you get many different elements together into one place. Identifying your weaknesses is an important first step to countering them and knowing your strengths will help you make them stronger. 

Seize any potential opportunities that you are able to identify and be prepared for any possible threats and you will have taken an important step towards a more resilient and reactive business.

Have a look at our business planning section for more articles and attend one of our workshops with expert speakers to help your small business grow to its full potential.

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