A SWOT analysis is a structured approach to evaluating the position of your business; it’s an essential tool for business owners to use in my opinion, and it helps that its free and easy to do as well. SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. Strengths and weaknesses are factors that form the internal environment of a company (namely what you bring and are in control of for the business), while opportunities and threats are said to be the uncontrollable factors coming from the external environment (like competitors, European law, financial legislation, etc).
The completion and updating of a SWOT has the potential to shift the direction your business takes. It helps you work on the areas you need to and promote the things you already do well.
Until I started my business back in 2013, I hadn’t worked with a SWOT since High School, so it took some time to complete mine and fully understand how useful it could be.
Why Use a SWOT?
A SWOT can help you understand what you need to work on and also what you need to watch out for. It helps you understand in plain, black and white what you already know and do well, which as small business owners we tend not to focus on too much.
You can use a SWOT to help you strategise and prioritise what you need to learn more about and strengthen your position and direction for your business.
The internal and external elements of your SWOT are something that can be and should be compared. For example, are your strengths better or worse than your competitors, and do any of your weaknesses provide opportunities that you could work on? Many of the things you jot down may overlap and can be a strength, a weakness, an opportunity, or a threat all at the same time. T
SWOT and the Situation Analysis
I only mention this here, as I did personally confuse these two myself when I first started, so I hope you find this section helpful. They're both very strategic tools and can be used to assess a business or project's current state, but they serve quite different purposes and have distinct scopes that they cover. Here’s a breakdown of the differences:
SWOT Analysis
Purpose: Focuses on identifying specific factors that can impact a business or project positively or negatively.
Situation Analysis
Purpose: Usually known to provide a comprehensive overview of the current environment in which a business or project operates.
Components:
When Should We Use Each:
Use a SWOT analysis when you need a quick, focused tool to identify and prioritise specific factors affecting a decision or project.
Use a situation analysis when you need to comprehensively understand the broader context before making strategic plans.
Both tools are complementary and can often be used together. For example, a situation analysis may provide the detailed data needed to inform a SWOT analysis.
How to Conduct a SWOT Analysis for Your Business
It’s important that you start with purpose! Why and what are you looking to analyse as part of your SWOT? Are you focusing on the business as a whole, maybe a department of even your place in the market? You can naturally make it blended, but that could potentially make it a very large project.
Then think about the overall goal of the SWOT. Is it for making decisions about your direction, sorting out further staffing, or working on your knowledge?
You might find is advantageous to bring in your friends, family, friends, family or partner to work through it. They will have an understanding of your business and maybe be able to help you see the woods through the trees!
Then look at your data points (as mentioned above) and start bringing in your ideas and putting them into the traditional SWOT square that you have seen. Initially I used to use just sheets of paper but now I use a whiteboard, but an Excel spreadsheet does the job too.
Ask Targeted Questions for Each Area
Strengths (Internal)
Weaknesses (Internal)
Opportunities (External)
Threats (External)
Once Your SWOT is Complete
Obviously, you now need to act upon your findings. You’ll need to prioritise them based on Impact (how significant is this on my business or on me?) and Urgency (do I need to do this immediately?). I then use the Traffic Light System of Priority and colour code them accordingly.
The job to do now is to work on each of these SWOT items: to build on your strengths, overcome your weaknesses, take advantage of your opportunities, and work on eliminating your threats
I like to print out this as an image and put it up on the wall in my office and other clients have used post it notes, a form of infographic, or simply put it into a diary system for action. Do whatever you feel is most comfortable for you. Whihj one will you do?
I then revisit this every 6 months as a minimum but you can update this as often as you want of course.
You’ve now got the tools and insights—now it’s time to take the first step! Subscribe to my newsletter today for more expert tips and exclusive content delivered right to your inbox.
Working with clients Nationwide from base in Mullingar.
