Written by: Corey Harris & Julie Traxler, Executive Contributor
Executive Contributors at Brainz Magazine are handpicked and invited to contribute because of their knowledge and valuable insight within their area of expertise.
A SWOT analysis is a relatively quick and easy tool to get a better grip on your business and figure out areas to improve what you do. If you’re starting a new business, it’s critical to help you position yourself. If you have an existing business, it’s something you should perform every one to two years to keep you on track for success.
But first, what is a SWOT? Albert Humphrey is credited with creating this approach to identifying your business’s Strengths, Weaknesses, Opportunities, and Threats, and at the surface, it really is that simple. It’s a two-by-two grid where you list everything you can think of in each category. It’s a brainstorm that shows you where you’re strong and where you’re exposed. The real value, though, comes from how you address everything on the list. This is a great tool to have for startups when you begin building out the rest of your business’s foundation.
You can perform a SWOT analysis alone, but it’s better if you include members of your team. Depending on the size of your organization, you can include your management team or possibly everyone. You want enough people involved to get multiple opinions and good conversation going, but too many people may make it unruly. That’s your call to make. If you’re a solopreneur, you can do this alone, but it may make sense to bring in people close to you and your business. This could be your spouse or people in your professional network. And this isn’t strictly for businesses. You can perform a personal SWOT analysis to improve your life in general.
The process of identifying everything in each category should only take you less than an hour, with about ten minutes spent in each category. All you need is people to participate and something to document. We like to use giant sticky notes, but you should use whatever is easiest for you.
These are those things you do well and could be those things your business is known for. They could be internal, such as a well-defined training program, or external, like the product or service you deliver. After you get through the obvious, start thinking about them from different perspectives. What do your customers say about you on social media? What opinions about your business do you think your vendors hold?
These are areas where you know that your business is lacking. Like strengths, they can be internal and external, and it may be easy to list the obvious. Take the same approach by listing everything you can and then viewing your business from different perspectives. This discussion can feel personal at times, and it may be since you are an extension of your business, but remember it’s all about improving what you do. If your staff is participating, make sure they know that this isn’t personal. You want everyone to speak up and let you know what their opinion is.
This is the fun part of the exercise. This is where you get to list everything you can think of that will help improve your business. Just like the other two, they can be internal and external, but this is where you can ask your staff the “if you had a magic wand” question. What would you change if resources weren’t an issue? What are those things you’ve always wanted to change or implement but haven’t been able to for whatever reason? Challenge yourself and your team to think outside of the box, and make sure you don’t stifle any creativity by shooting something down. Ask them what annoys them about what they do. Nothing stone should be left unturned. This is brainstorming, and there are no wrong answers.
Threats are kind of like weaknesses, but they’re things that haven’t happened to your business. They are anything that would disrupt what you do or how you perform. They could be big or small threats, they could be easily spotted and dealt with, or they could sneak up on you with no notice. They could be natural disasters, key employees leaving, or changes in laws that could impact your business. The more threats that you identify, the more secure you can do your business.
The Follow Up
Now that you have everything listed, it’s time to review what you’ve completed. First, did you notice any conversations about whether something was a threat or strength? Was a weakness an opportunity? If so, that’s completely normal. It’s possible for one thing to exist in more than one bucket, so keep them in each if that happened. For example, a key employee could be a strength because they’re the best at what they do, but if they left for any reason, your business could be threatened.
At the beginning of the pandemic, we spoke with a dentist who is also a partner in a merchant services company. His knowledge of and connections within the dental industry made it easy for him to sell his credit card processing services to other dentists. Ninety percent of his business was dentists, and he viewed all of this as a strength until the pandemic closed 90% of his clients, quickly making it a weakness as well.
Begin your review by prioritizing everything you listed in each category. Pick the top five or so that are the most important, and define each. You want the definition to be descriptive enough that anyone who isn’t familiar with your business can understand what it is. After that, you’ll want to create an action plan to address each.
For strengths, you’ll want to list all the ways that you can protect them. These are what separate you from your competition, and you don’t want to lose them. Just like unused muscles atrophy, you will lose your strengths if you fail to continue working on them.
Your plan for your weaknesses should be to get rid of them altogether. That doesn’t mean they’ll eventually become a strength, though they could. It just means it’s not something that causes problems now. It’s also possible that you’ll never get rid of one or all of your weaknesses. Simply identifying them and creating a way to address them when they arise in your business is a great solution.
Opportunities need to be prioritized by how realistic they are and the resources required to implement them. That doesn’t mean your team's wild wishes should go in the trash, but you want to have actionable items by the end of this exercise. It may also help break them up into “nice to haves” and “need to haves” when you prioritize. And just because the “needs” need to happen, the “nice to haves” may be quick wins you can take advantage of now.
Last, you’ll want to plan for your threats. If your list isn’t too long, it’s a good idea to address them all. Prioritize by determining the likelihood of occurrence and impact to your business, and then start listing how you can mitigate the threat. This could be as simple as having insurance cover a loss or as complicated as creating a disaster recovery plan. Your comfort level with each risk will determine what you do and how you mitigate. The most important part is that you are now aware.
Now that you’ve performed a SWOT analysis and have an action plan for each category, you’re ready to improve your business. Hopefully, you could identify areas that you weren’t previously aware of, and you now have a written list of things to improve. Don’t let it end here, though. As you take advantage of opportunities or strengthen weaknesses, add more to your list and reevaluate your SWOT at least every two years. Your business will thank you for it. Connect with Julie Traxler and Corey Harris on their LinkedIn, Instagram, Facebook, or Twitter or visit their website.
Julie Traxler and Corey Harris, Executive Contributors Brainz Magazine
Julie and Corey started their company, SB PACE, due to the 2020 pandemic to assist small businesses. Since then, they have expanded into helping start-ups, companies looking to improve, and small business mergers and acquisitions. They wrote the book on small business disaster preparedness and continued to help small businesses by leveraging their knowledge and experience working for Fortune 500 companies and Big Four consulting firms. Julie and Corey are the experts small business owners turn to when looking for sustainable, long-term success.