According to numbers from Facebook in December 2020, nearly buymalaysianfollowers one-third (31%) of small businesses in the U.S. are currently not operational.
This was in large part due to the restrictions in place that affected many small businesses.
Regardless of whether you’re operational or not, you’ve likely realized that you need to identify places…
…where you can be better prepared and can improve your positioning and readiness for new and emerging realities, trends, and customer needs.
One of the best ways to identify these positions is by doing a SWOT Analysis. Let’s get into it!
Today, we’ll be showing you how to perform a SWOT Analysis, why it matters, and what you can do with the information.
In order to effectively market your business, improve your products, build better relationships with your customers, and retain top talent…
…you need to know what works for your business and the people in it, and what doesn’t.
In this post, we’ll discuss:
- What a SWOT analysis is and why we use them
- How to perform a SWOT analysis step-by-step
- Questions to ask yourself if at any point you get stuck during your analysis
- What to do after you’ve completed the analysis, including how to create and prioritize your task list
A disclaimer before we get started:
A SWOT analysis can feel a little bit like an attack sometimes. You may find yourself taking some of the results personally.
Don’t do that though. Don’t.
Remember that a SWOT analysis isn’t intended to be a criticism of your business or of you, as a business owner. It’s not a moral judgment.
It’s simply a tool for you to use to take an honest look at your business and figure out what you can do to make it better.
Some of it may hit you on a personal level, but that’s normal, and it’s a feeling you have to push aside so you can do what’s best for your business.
What Is A SWOT Analysis?
SWOT stands for:
It is an assessment tool used to help you identify the areas where your business is excelling and the places where you need to improve.
Why Do You Need To Perform A SWOT Analysis?
As we mentioned before, a SWOT analysis is used to identify where a company is excelling and where they have room for improvement.
This is typically used to assess the situation before a new strategy for growth or marketing is created.
It’s a good idea to perform a SWOT analysis every 6 months to a year.
And anytime there’s a big change coming, like if suddenly people can’t visit your store anymore.
If you’re doing it properly, you’ll have new breakdowns every time and will have a new priority list to work on until the next SWOT holiday.
Can we make that a thing? Every business gets the day to focus solely on their SWOT?
Who Should Be Involved In The SWOT Analysis?
No SWOT analysis, no matter how good it is, will be useful if you don’t have leadership on board to make the necessary changes.
Or, to at least make a plan to make the necessary changes.
So before you start, you’ll want to get buy-in from the leadership team.
However, this shouldn’t be a top-down exercise.
You’ll want to get input from your customer service team, marketing, product development, product fulfillment/shipping, and Human Resources.
Be sure each department is represented, but don’t just choose the managers or department heads.
You want to hear from folks who are in the weeds, so to speak; those who are intimately familiar with the day-to-day processes and realities.
Steps On How To Perform A SWOT Analysis
We’re going to walk you through what to include in each quadrant and how to format everything.
And then, we’re going to walk you through each category and give you some questions to ask yourself and your team to help if you get stuck.
A SWOT analysis can be intimidating and confusing, so we recommend breaking it down into categories and focusing on one at a time.
Here’s the order in which we typically complete a SWOT analysis:
Step 1: Establish your question or objective for your SWOT Analysis
Step 2: Gather data, research competitors, and ask for employee or industry expert input
Step 3: List your businesses strengths and weaknesses, opportunities and threats
Step 4: Establish priorities for addressing your SWOT findings
Step 5: Create a strategy and put team members or contractors into motion
Step 6: Reevaluate and revisit your SWOT regularly
Step #1: Establish your SWOT objective.
Before you dive headlong into your SWOT analysis, you need to establish an objective or have a question you’re answering.
You need to do this to keep your analysis focused.
It can be easy to fall down a rabbit hole of every single strength, weakness, opportunity, and threat.
You may soon find yourself with dozens of ideas for unrelated things (like marketing, creating new products, expanding services, etc).
We like to phrase our objective as a question, so if we find ourselves getting sidetracked, one of us can pose this question and get us back on track.
Here are some example questions:
- Should we expand our services to include ____ [new service]?
- How can we improve our digital marketing plan and efforts?
- In what ways can we improve our customer retention?
We’ve found that starting with the objective or driving question helps to focus efforts and discussions right from the beginning…
…and ensures everyone is working toward the same goal.
A SWOT with no objective will get chaotic quickly, so avoid those when possible.
After you’ve established your objective or question, it’s time to gather data, research your competitors, and ask for input.
Step #2: Gather data, research competitors, and ask for input.
You really can’t perform a SWOT analysis in a vacuum.
You can try, but it probably won’t get you very far, because you’re only relying on your perspectives and knowledge.
Getting input from others is crucial, and so is gathering hard data so your analysis is based on fact and measurables, not on hopes and dreams.
As the title suggests, step 2 actually has 3 steps within it:
- Gather Data
- Research Competitors
- Ask for Input
Let’s look at each in turn.
1. Gather Data
This is exactly what it sounds like. You’re going to gather hard numbers (or get as close as you can) for the objective or question.
If you’re dealing with getting more sales, start by collecting data for:
- how many sales do you get now,
- how much those cost you,
- what the average order value for those sales is, and
- how you get those sales (marketing channels, sales team),
2. Research Your Competitors
What are your competitors really good at? What do customers love about them?
What does their internet presence look like? What is their ordering and shipping experience like?
You’ll need this information so you can identify the things you do better than your competitors and things you do worse than them.
3. Ask for Input
Even if you’re the owner or you’ve worked in the industry for a while…
…you don’t know everything there is to know about your business or the customer journey.
That’s why we like to seek out the opinions and experiences of others in and outside of the company.
When we ask for input, we like to do a few things:
- We send our questions before we meet with team members.
We’ve found that tailoring questions to the individual for their department or position works best.
We also like to ask team members to summarize their answers as one-sentence bullet points.
We like to limit them to 2 or 3 bullet points per question.
Some folks work better when they have some extra time to think about the question and mull over their answer.
We have found we get better, more fully formed answers and ideas if we give folks some time than if we put them on the spot in a meeting.
- We meet with team members individually instead of in a group.
Some folks will gather everyone together and do a one to a two-hour brainstorming session to get ideas out there and prioritize them at the same time.
We’ve sat in on a few of these in-person group sessions and we don’t think they work well, personally.
First, some employees may be unwilling to speak up if they think their comments will be perceived negatively by leadership.
It’s also easy for louder employees to dominate the conversation, meaning not all ideas will be heard.
Second, we’ve seen so many of these meetings devolve into operations or digital marketing campaign discussions, or check-ins.
When that happens, these conversations aren’t productive or a good use of company resources.
To alleviate some of that, we recommend you assign one person with the task of completing the SWOT analysis.
This person can schedule one-on-one discussions with the team members you want to be involved in the process…
…so that they can speak candidly (not negatively, just candidly).
Step #3: List your business’s strengths and weaknesses, opportunities, and threats.
Now we’re getting to the bits that you think of when you do a SWOT analysis.
This is where we’ll do the majority of the work brainstorming ideas, and identifying issues and potential solutions.
Let’s go over what you’ll include in each section and some questions you can ask yourself or your team if you’re feeling stuck.
Focus on those things that you do exceptionally well in this quadrant.
This can be anything from culture to shipping times to product design.
Maybe your Instagram is growing like crazy, or your Facebook business page is getting tons of likes and follows.
Try to include a mix of tangibles and intangibles here. Having good ideas is definitely a strength.
Use hard data here when you can like if your new sales team has improved sales a lot, look at how much…
…since this will help you later on when you’re judging how successful you were with your execution.
Here are some questions to ask yourself if you’re struggling to come up with strengths:
- What’s something our current customers compliment us on?
- What’s something we’ve been officially recognized for (have you won awards for anything)?
- What does our team do really well?
- What are we experts in? What makes us experts?
- When customers come to us from a competitor, what do they say is the reason?
This quadrant is for things that you don’t do well.
Look at this honestly and really listen to your employees and customer feedback without taking it personally.
Here are some questions to ask yourself if you’re struggling to come up with weaknesses:
- What negative feedback do we receive from customers most often?
- What stops prospects from becoming customers?
- What is delaying our processes internally?
- What are we doing inefficiently? Is there a better way to do it?
- What resources, knowledge, or skills do we lack?
This quadrant is for opportunities you have for growth.
You should focus on things you’d be able to do if you just had one or two different circumstances.
So, don’t get too head-in-the-clouds here. That’s not to say you shouldn’t throw those ideas out there.
But, it means you should focus on developing the ones that can be accomplished in a 6-month to 1-year timeframe.
Those big lofty goals can be added to your long-term development plan. Work on this separately from your SWOT tasks.
Here are some questions to ask yourself if you’re struggling to come up with opportunities:
- Are there any current or projected trends that we can connect to our business or product?
- Is there a skill set or person we’re lacking? Could we create a role and hire someone to fill that and join the team?
- Who can we support? What can we do to support them?
Speaking of skill set, check out this post next to learn the top marketing skills in 2021.
And, the final quadrant is for threats that could take business from you.
These threats can be from competitors or industry changes, market shortages, or big extenuating circumstances, like 2020.
You should list internal and external threats here because both play a large role in the health and success of your business.
Here are some questions to ask yourself if you’re struggling to come up with threats:
- Are there any big changes coming to the industry (i.e. privacy changes affecting digital advertising)?
- Are there new competitors or products that could replace our business or product?
- What supply chain issues have we had this year? Are they expected to continue?
- Have we seen a decline in sales? How much? (Hard data is essential here)
- Could any of our weaknesses prevent us from meeting our goals?
Step #4: Establish priorities for addressing your SWOT findings.
Now that your SWOT analysis is complete, what’s next?
You’ve got this list of areas you’re killing it at, and know what you need to do to improve upon, but how do you start?
You’re going to need to create an action list and prioritize the items on that list.
Then, you delegate to employees or contractors, outsource to a digital marketing company, or complete the tasks on the list.
Let’s quickly review how to do that.
· Create an action list
Your completed SWOT is essentially a quartered-off to-do list. But it will require some polishing and restructuring before you can just go.
Look at each bullet point and rephrase it as a task. Then, list any subtasks that need to be completed within that task.
Don’t worry if you can’t think of every task, or if you can’t phrase your task well.
That doesn’t matter at this point as long as you have a good idea of what you need to do.
You can’t do everything all at once, and you shouldn’t put that pressure on yourself or your team.
So, what you need to do is to prioritize each of the actions on your list.
Sort tasks by:
- Tasks that you already have resources for.
- Tasks that you can quickly/affordably get resources for.
- Tasks that you can’t get resources for – but there’s a workaround.
- Tasks that you can’t get resources for – no workaround.
Start with the tasks that you have resources for now.
If you have more than one task on this list, do the one your team is most interested in to get the ball rolling.
Step #5: Create a strategy and put team members or contractors into motion.
Now that you’ve identified the best ideas and prioritized them, it’s time to put everything into motion.
Hopefully, you’ve got a team or contractors you can rely on to delegate some of the work. Use the resources available to you.
You can organize this however you’d like by using your priority list from the last step to guide you.
Step #6: Reevaluate and revisit your SWOT regularly.
How often should you perform a SWOT analysis? What does “regularly” mean?
Well, it can mean whatever you want it to.
However, we recommend performing a SWOT analysis at least once a year.
You should also perform a SWOT:
- Before you introduce new products or services (if they’re quite a bit different from what you already provide).
- If there are changes to your internal teams (i.e. you add a new department or you hire a marketing director).
- When big changes are coming to the industry or world (like 2020).
We hope this helped answer your questions about what a SWOT analysis is, why you need one, and how to perform one.
You’ll get better at these as you go, so don’t stress out about this Click Here too much.
Use as much data as you can, and if you find that you don’t have any hard data, start collecting it now so you have it ready for next time.