Have you ever done a SWOT Analysis of your business?
It’s kind of like taking a snapshot of what you’ve got, or what you are coming up against. It’s fairly simple to do, yet an incredibly powerful tool to have in your business plan and a growth planning tool to use throughout the year.
SWOT stands for Strengths, Weaknesses, Opportunities, and Threats.
Identifying points in each category can help you prioritize what you need to work on for short term and long term gain. It’s equally beneficial if you are in start-up, growth, or succession mode.
When you analyse your company, you look internally to the business for your Strengths and Weaknesses. External factors are listed as Opportunities or Threats. You then review all the inputs to determine where you may need to focus your efforts to achieve your current business objectives.
Let’s dig into the details of how you can do your own SWOT Analysis.
This is a great exercise to involve your team, so that you can get different and objective points of view in each SWOT area. You may be limited for ideas if you do the SWOT process by yourself, but this is dependent on you and if you’re good at objectively considering all situations. Some people are good at this.
Your team could include employees, vendors, or other stakeholders. If you are a one-person operation, seek input from family, friends, trusted advisors, or even customers. The key is to be a good facilitator and demonstrate to the “SWOT Team” that you truly want their opinion so that you can gather their valued and objective input. There is no point in the exercise if people tell you what they think you want to hear, this is about gathering what you NEED to hear and understand.
SWOT Components Breakdown
To get a better understanding of what to identify for each section, here’s a breakdown of each component of the SWOT categories. The following suggested questions to ask yourself and your SWOT team are not exhaustive. They’re a starting point to dig deeper and get ideas to expand and layer ideas and input.
What positive attributes or assets do you and your company have?
- Do you have a prime location, or professional facility? i.e. high traffic road, commercial kitchen
- What personal assets do you or team members have? i.e. knowledge, education, skills, connections
- What physical assets do you own? i.e. equipment, livestock, established product line
As implied, this is a list of negative aspects that undermine your strengths.
- Are you lacking proper equipment or other physical assets?
- Do you need qualified staff to complete certain operations?
- Do you need patents, certification, or other official status?
Look at factors outside of your company, things you have no control over.
- Is there a market segment growing or trending?
- What relationships can you capitalize on? i.e. local grocer, co-marketing partner, distributor
- Are there upcoming events for promising exposure?
Threats are also uncontrollable elements. By acknowledging them you can better prepare to deal with each situation as they arise, or identify work-arounds.
- Are certain competitors controlling the market or new ones entering it?
- What changing costs impact your ability to be profitable? i.e. energy costs, cost of goods, tariffs and taxes
- Are you inhibited by certain regulations? i.e. regional, provincial, federal
After a brainstorming exercise, the simplest way to organize your SWOT points is to place them in a grid with four squares, one for each topic, and your bullet points listed in each section. This diagram is a very simple example:
When you go through the SWOT process, plan it in three simple stages:
- Brainstorm ideas
- Edit and qualify input
- Analyse data and create summary statement
When you begin to facilitate this SWOT process, give the team a 5-minute summary. Fully explain to them what the focus of this exercise is (e.g. growing the business, a new product launch, a joint venture, etc.), and explain the SWOT categories to be discussed in the brainstorm session. As the leader, point out some of the critical Weaknesses and Threats that need to be included. Make it clear to them that you appreciate and respect their unbiased feedback.
SWOT Brainstorm Session
Your role in the brainstorm session is to objectively facilitate a discussion on each SWOT category, focussed on gathering input.
Start the conversations with Threats and Weaknesses. By first recognizing these vulnerable areas, and getting them out in the open, the team knows there are no taboos. Then, you delve into the company’s Strengths and Opportunities which usually lead to a positive finish. If facilitated correctly, the brainstorm session can result in a very constructive experience.
The brainstorm session is meant to generate ideas of all kinds. It is not a time to qualifying or judge an individual’s contribution. Instead, receive each input with respect.
It’s important to clarify input that might be a mistake of what you do (e.g. we grow sweet peppers, not hot peppers), but don’t correct an idea or opinion. For example, if a participant suggests placing an ad in a local online Farm Blog, don’t tell them that you’ve done this before and it didn’t work. That shoots them down and tells the group you’re not “open” (maybe your ad was poorly designed or timed wrong!). With your “buts” and corrections, you will shut people down and miss out on their valued, objective input.
- Accept any and all input as good. Write each point down. If they relay things you already know, write it down. Write it all down.
- Show your appreciation for everybody and continue to encourage participation. That will create momentum to foster more ideas.
- Expand and add layers to good or bad ideas. This can lead to uncovering even more creative concepts.
Farm Food Drink has been brought in to develop a SWOT analysis for organizations and businesses, and many times we get much more “substance” simply by how we facilitate and openly gather information. You can do this, too!
Edit & Qualify SWOT
After the brainstorm session, it’s time to schedule a separate meeting with key management or stakeholders. Or if it’s just you, then schedule a focused time to go through the information you have gathered. This part of the process is where you distill and refine the brainstorm input, down to manageable and comprehensive outputs.
- Remove concepts or input that are not relevant.
- Combine ideas where there is overlap or duplication.
- Reduce and transform comments into concise bullet points.
- Highlight key learning bullet points.
- Create the full SWOT, inputting relevant bullets into the proper quadrant.
- Refine each quadrant by identifying the top 5 or 6 most relevant points.
SWOT Analysis & Summary Statement
When you look at your four completed SWOT categories all at once, it helps you to better analyse where you may need to focus, and what to prioritize.
Refer back to your objectives of doing the SWOT Analysis in the first place. Consider how you can leverage your strengths to take advantage of your opportunities or to ward off or prepare for threats. Look deeply into what you need to focus on to achieve your business goals.
Now it’s time to summarize your findings into a short, comprehensive paragraph. As a reader of this SWOT Summary Statement, we should see and understand the link between your SWOT summary and your business or marketing strategy.
At Farm Food Drink, when we do a SWOT Analysis, we like to summarize our findings with a SWOT Summary Statement (in a plan we show this just below the SWOT grid). We briefly describe what should happen as a result of the analysis relaying how the SWOT’s outcome is affecting your business objectives, whether that’s for your overall business plan, your upcoming year, or for a new product launch, etc. This summary is the link between the analysis process and what your strategy is going to be (listed in detail within our business or marketing plan). Depending on the business and your situation, that may mean taking action on weaknesses, or capitalizing on strengths, or a combination of both.
SWOT Process Conclusion
The SWOT Analysis Process can be very powerful. Besides analysing the general health of your business and discovering how you can grow, you can also use it for different types of business goals like:
- New product development
- Food production (equipment) expansion
- Leasing of a farm field for new crop expansion
- Scaling into a cross-border market
- Succession planning
- Analyse new or key competitor
(who the SWOT process may suggest is a key collaborator!)
Business Planning shouldn’t just happen once a year, and that goes for a SWOT analysis, too. Try to look at your plan and SWOT quarterly, semi-annually, at least annually to keep abreast of how your business is evolving and should evolve, all affected, objectively by your businesses situation and external influences. If you are interested in learning more about how to conduct your business plans, have a look at our business planning workshop schedule or ask for our help in growing your business.