How to Build an Effective SWOT Analysis + Downloadable Template
What is a SWOT Analysis?
SWOT is an acronym that stands for strengths, weaknesses, opportunities, and threats. It is often separated into four squares divided into a cube (as shown below). They are particularly useful for businesses so they can uncover issues with their business that they were never previously aware of.
How do they help business owners uncover issues?
Is your business operating at top efficiency? Before you spout off a corny excuse bringing up how busy you all are this season, I want you to really think about this question.
Is your business performing at the highest level that it can and doing what it needs to maximize sales? More often than not, the answer is no, and there are a number of ways that your business could better position itself. Keep in mind that this doesn’t mean you’re a bad business owner, companies like Apple, McDonald’s, and Home Depot still have issues with their operations even though they’re worldwide conglomerates. There are many ways to figure out the problems that are holding your business back, and the most effective is by building a SWOT analysis. Not everyone needs an expensive consultant to come and order them around, you often know exactly what is wrong with your business, you just never took the time to sit down and lay them out with your team.
For example, say you own a bakery and decide to run a SWOT analysis to see if there are any areas where you can save some money. So you get your assistant manager and supervisors together to list areas where you’re spending the most money under the “weaknesses” section. After making a long list of items, you notice that you’re spending more on cookie dough than you originally thought. You take this into consideration and research if there are any cheaper options for cookie dough while maintaining the same quality. Due to your research, you end up finding another supplier that is able to get you a similar quality of cookie dough for a lesser price. So you order a small amount to test the quality before you make the full transition over to the new supplier.
If you never would have taken the time to build a SWOT analysis in the first place, then you never would have found out about the other supplier that could potentially save you some money on cookie dough. This demonstrates the real strength of SWOT analysis and how it can positively affect your business by bringing up issues you were never previously aware of so they can be addressed. Also, we’ve attached a useful downloadable SWOT analysis template for you to use whenever you need some help putting one together.
Free downloadable template
Now that you’re better aware of what a SWOT analysis entails along with how to correctly put one together, make sure you click on the link below to be taken to your own downloadable SWOT analysis template that can be used whenever you need it!
Before you start the SWOT
Before you even get started creating your SWOT analysis, it’s important you do the correct preparation beforehand so you get the most out of the task. Not only that, but it’s important you speak with your group of supervisors, assistant managers, and anyone else that you’ll be inviting to the meeting beforehand so they may also properly prepare for the occasion. Your first step should be to create a company profile for your business that goes over what your business does, the problem that it solves, and who the typical customers are. Although this may seem like a no-brainer, it really helps the process of creating a SWOT analysis and accurately lays out the components that go with it. You should also do a outline of the issues that are facing your business so you have a basic idea of what you should bring up.
Set the tone
Make it clear from the beginning that you, nor anyone else, shouldn’t be afraid to bring up any issues that may be hurting the company. This may involve calling certain employee out that include members of management, but it is a necessary step of the process if you want your SWOT analysis to be as effective as you want it to. A strategy that you may find to be helpful is to send an email to each individual employee so that they can give input that they weren’t comfortable bringing up in front of everyone. It is also good for letting them put in ideas that they couldn’t think of before.
Now that you have a better idea of what the SWOT analysis is and how it can help your business, let’s break down each section of the analysis so you can get a better understanding of each. But before we move on, it’s important you understand that a SWOT analysis is great for not only uncovering the internal factors that are causing your business to suffer, but also for exposing the external factors that are holding your business back as well.
Strengths
The first section of the analysis are the strengths. Listing out your strengths is important because it’s always good to understand what your business is doing correctly so that you aren’t completely frustrated when building your list. That said, make sure that you build your list of strengths on things that are under your control so that it stays with the theme of the rest of the chart.
To give you a head start, take a look at this list of questions that can be used to help uncover the strengths of your business:
- What do we do well?
- What is the most common compliment brought up on your Yelp reviews page?
- What advantages does your business have?
- What do you all do better than any other business in your field?
- What resources are unique to the business that you can use that others can’t?
- What are we known for?/ What do our customers like the most about us?
- What is it that we’re doing that no one else can replicate?
- What are our assets?/ Which of our assets is the strongest or most valuable?
- What makes our employees better than employees at other businesses?
- What areas do you have the most experience in?
- How does your location affect your business?
- What is the Unique Selling Proposition of your business?
Before we go any further, it’s important that you understand what a unique selling proposition is and what it has to do with the strengths of your business. A unique selling proposition is defined as the factors that separate a product or business from its competitors, this includes things like cost, quality, time, etc. It can also be thought of as what your business has that other businesses don’t. Unique selling propositions are often times used as slogans so that it becomes synonymous with the company.
Some examples of unique selling propositions from famous companies include:
FedEx: “When it absolutely, positively, has to be there overnight.”
DeBeers: “A Diamond is Forever.”
Domino’s Pizza: “You get fresh, hot pizza delivered to your door in 30 minutes or less or it’s free.”
M&Ms: “The Milk chocolate melts in your mouth, not your hand.”
Now that you better understand what the strengths section of your SWOT analysis should entail, let’s move onto the weaknesses.
Weaknesses
The next section of your analysis are your business’s weaknesses, this is one of the most important parts of the overall analysis so it’s important you pay close attention and take it seriously so you can ensure you get the most out of it. Also, don’t be hesitant to write down issues that could bother certain employees, if you feel like your management team needs some work then make sure you write it down. Running a business can get ugly but it’s the only way you’ll hit the goals you want to hit. Here are a list of questions that can jumpstart your list of weaknesses for your SWOT analysis.
- What areas need some improvement?
- What do you need to avoid?
- In what areas do your competitors have a direct advantage over you?
- Are you bringing in enough profit?
- How big is your customer base?
- What is the most common complaint on your Yelp reviews?
- Are your employees trained well enough?
- What areas are you lacking in knowledge or experience?
- Is there any way that your customer service can be improved upon?
- What are the resources that we’re lacking?
Don’t just ask yourself these questions, make sure you also let your employees take a look at these questions so they can provide insight you may not have been aware of.
Opportunities
The opportunities section of the SWOT analysis is often overlooked but is just as important to the overall analysis as any other part. Which is why you shouldn’t gloss over this and should put as much effort into it as you did with the strengths and weaknesses sections. Keep in mind that this section is called opportunities for a reason, these are specific areas where your business can grow and increase sales. So do yourself a favor and don’t hold anything back. With that said, here are some questions to get a better sense of your business’s opportunities.
- What popular trends are there in your industry?
- In what ways is the market changing?
- Any changes in lifestyle or population that can affect your business? An example of this is adding gluten-free items or adding more kid-friendly items to the menu because more families are moving in.
- Are there any local events that can help us get our name out there?
- Did we recently miss out on any opportunities?
- What is the ideal type of opportunity that we should be on the lookout for?
- What areas are your competitors lacking where you can come and take some of their customers?
Opportunities are where your business really makes breakthroughs and increases sales in areas you’ve never previously considered. This section is going to take a lot of research, so make sure you’re taking your time and thoroughly going through which opportunities can strengthen your business.
Threats
Last but definitely not least, we have the threats portion of the SWOT analysis. Many make the mistake of mixing up their weaknesses with their threats, it should be understood that while they may appear to be similar, threats represent an entirely different set of issues than weaknesses. Threats are typically out of your control and while you may not be necessarily able to completely avoid these threats, you are able to minimize them to the best of your ability. Here’s a list of questions to get to the bottom of your business’s threats.
- Are there any new business openings that can potentially take some of our sales?
- Have there been any negative mentions of our business from influencers on social media?
- What obstacles are we facing to reach our goal?
- Is everyone on staff happy with their wages and benefits?
- Are there any changes in government policy that have affected your business? For example, many states have passed legislation regarding predictive scheduling that can be an issue for you if you’re not careful. If you’re not sure your scheduling systems are built to handle this, take a look at the features Deputy has that can help out your business.
- Do you think there may be a change in your consumer’s tastes?
- Has there been an increase in prices from where we get our supplies shipped?
- Are there any new apps out there that could affect how we operate?
Conclusion
A SWOT analysis can be one of the best tools your business has for uncovering issues you all were previously unaware of but the only way you can get the most out of it is if you do it correctly. Do your research beforehand and make sure to bring it up with your team so they can also prepare to bring up the issues that are really holding you guys back.
If one of your pains is having to deal with employee scheduling, make sure to click on the button below to begin your free trial of Deputy so you can see it in action for yourself.
