How to Write a SWOT Analysis for a Business Plan
A Swot analysis is part of the business planning process that helps you to develop your business strategy whether you are building a startup or guiding an existing company. SWOT stands for Strengths, Weakness, Opportunities and Threats. A SWOT analysis organizes your top strengths, weaknesses, opportunities and threats into an organized list and is usually presented in a simple two-by-two grid. SWOT analysis helps you to be able to do a solid strategy for prioritizing the work that you need to do to grow your business. It will help you to analyze your business in a new way and direction. Also, it will help you know how to leverage both your strengths and weaknesses and take advantage of the opportunities and threats that exist in your market.
For a SWOT analysis to be more effective, the company leaders and founders has to be deeply involved because it is not a task that can be delegated to others to do but rather it will need the help of every other person in the company so as to be able to see the analysis from different directions on the company. Different representatives from different department should be selected for the analysis. If you are running a startup business, doing a SWOT analysis might not be so effective but you can make it worthwhile by inviting public eye from different organization especially those who work in your field of business to help you with the analysis. Existing business can use SWOT to analyze their current business situation and determine a new strategy to help grow their business.
SWOT analysis was firstly introduced by Albert Humphrey in the 1960’s and it has been effective since then till now. It’s simplicity allows anyone to make use of it without any prior knowledge.
QUESTIONS THAT CAN HELP TO INSPIRE YOUR ANALYSIS
There are some basic questions that you should be able to ask your team members which will be of good help to your analysis
- Strengths: You should know the strength of your company and how to maximize the maximize it. Strengths are internal and positive attributes of your company. They are the things that you can control, like the process that led to your business success. What are the assets you have in your business? Do you have physical assets like your customer, office equipments and cash? Do you control the business market and how do you control it? All if these are your business strength, they are things that you are in charge of.
- Weaknesses: This is a negative factor that affects the company and saps the strength of the company. The weaknesses affect the growth of the company negatively and you might need to improve on it. There are questions you should ask yourself here: Who are your competitors? What business processes needs improvement? Are there gaps on your team? Is your office location ideal for the business?
- Opportunities: This is an external factor that helps you to know if your business environment contributes to your success. You should be able to know what makes your customers buy from you. What are the upcoming events in your company that will help aid sales? Are there government regulations that will have an effect on your business? And setting you your SWOT plan should help you know how to tackle these questions with immediate answers.
- Threats: Threats are also forms of external factor that you probably might have no control over. As a business owner, you should always be ready with plans to face threats because the truth is; there will always be threats in your business. Sometimes, the threats might be internal, maybe coming from your team mistakes or from one inadequacy or the other and that’s why you should create a contingency plan in your SWOT plan so that your business won’t be caught up in a deep mess when facing threats. You should also be able to know if you have competitors in the market as threats. Is consumer behavior changing in a way that could negatively impact your business? Are your team members working together for the interest of the company? Answer all of these questions and create a good SWOT analysis.
Read Also: How to Apply for Grant Opportunities
WAYS TO USE SWOT ANALYSIS
After you have been able to complete your SWOT analysis, then I can say you are ready to convert it into a real business strategy because the goal of SWOT analysis is to be able to produce a strategy that you can work with for some months. You should note that you cannot get results if you do not complete your SWOT analysis because doing the analysis will help you to know what your business in lacking and how to provide a solution to it. You can’t define a solution without defining the problem first.
The first thing you need to do is to know your strength and know how it will help you create more opportunities in your business. Then, look at how you can use that strength to fight the threats you are facing in your company or rather say in the market, you can now use the SWOT analysis to tackle the problems and produce the results needed. However, you should know that your SWOT analysis help you to provide an action list in hand.
Also, another thing you will have to do is to take a good look at the external factors/opportunities that might help you combat the business weakness so you can avoid threats or so that the threats can be easily identified. Allow me to give a list of the other ways to use the SWOT analysis:
- Relate strength and weakness to physical success factor.
- Be realistic with your strength and weaknesses.
- Use your internal strength to take advantage of your external weaknesses.
- Make a list of your strength and make a list of your weaknesses, then the two and try to find a striking balance between them.
The best way to make good use of the SWOT analysis is to be able to firstly discover the business strength, weaknesses, opportunity and threat and then you can now study them in a chart to proffer a solution.
In conclusion, A SWOT analysis is a great way to guide business-strategy meetings. It’s powerful to have everyone in the room discuss the company’s core strengths and weaknesses, define the opportunities and threats, and brainstorm ideas. Oftentimes, the SWOT analysis you envision before the session changes throughout to reflect factors you were unaware of and would never have captured if not for the group’s input.
A company can use a SWOT for all business strategy sessions or for some segment such as marketing, production, or sales. In this way, you will be able to see how the overall strategy developed from the SWOT analysis will filter down to the segments below before committing to it. You can also work in reverse with a segment-specific SWOT analysis that feeds into an overall SWOT analysis. One other thing you should know is that SWOT has its own limitations too and it has how far it can go in helping with a company’s business plan, but in all, the use of SWOT is of great help to a business, and that cannot be overemphasized.
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