How to carry out your SWOT analysis

SWOT is an acronym for Strength, Weakness, Opportunities and Threat. It is a very important business tool for existing and new business. It helps you to determine ahead of time the strength and opportunities of your product/service as well as the weakness and threat it could face in the market or the industry where you want to operate.

This simple tool helps you to identify and document the internal strengths and weaknesses of your business as well as external opportunities and threats. It is very vital to be able to differentiate between your internal and external factors. This means that, for example, whatever would exist even if your business never exist or go into extinction is an external factor. A good example is new equipment. Your internal factors are things that have to do directly with your business. A good example is competent employees.

Furthermore, it helps you to diagnose your business industry, external environment, regulatory requirements, competitive advantage etc, before starting out your own business. When you are able to spot your strengths and opportunities, automatically your weakness and threat can be easily managed.

Here is a practical guide on how to carry out your own SWOT analysis:

Highlight your Strengths

This is the first and basic step. You must be able to list what you consider to be the strength of your business. A very good example could be your skills/expertise, financial resources and unique selling point. It could as well be your existing patents, intellectual property, partnerships, collaborations and technical support you currently have or will soon secure, awards and recognitions you have achieved before that can make your brand stronger.

Highlight your Weaknesses

Let me tell you that absolute honesty is mandatory when carrying out SWOT analysis for your business. What would you consider to be the weaknesses of your business, viewing it from your competitors’ vantage point? You must list these clearly. You need to identify both your internal and external weaknesses such as new untested product, weak brand, low level of adoption by target market, etc.

Highlight your Positive Opportunities

You need to expressly state the opportunities in the business environment that will assist the performance and growth of your business. You must consider the political, economic, social, technological, legal/regulatory and physical environmental factors (PESTLE) in your community, country, region or continent that may influence your business. 

Highlight Threats to Your Business

The threats to your business are also external factors that could stem from your business environment. It means the challenges and risks that you have to deal with. It could be political, economic, social, technological, legal/regulatory and physical environmental factors (PESTLE) in your community or country.

You need to know that after you must have clearly developed your SWOT analysis, it is very important that you carefully establish strategic ways to implement them and prioritize what needs immediate attention and what can be dealt with later.

Finally, you need to show how you will enhance your strength and use it for competitive advantage, how you can reduce your weaknesses, how you can exploit the opportunities and how you can reduce the threats, risk and challenges. It is at this juncture that you have a workable SWOT analysis.