- Every business has its strengths and weaknesses, as well as its opportunities and threats. Those are internal and external factors that affect the way that particular business operates and shape the company.
- SWOT analysis is a very well-known method of identifying what the company or the person does best or worst and what are some of the other potential things that could either harm or open up opportunities for the organisation.
Editor's Update 07/07/20:
The journey of being a successful entrepreneur is no small feat. There are many bumps and roadblocks, and you'll have to keep your hands firmly on the wheel to stay on track. That being said, you shouldn't feel discouraged by the challenge. An entrepreneurial mind certainly has its strengths, but it also has its weaknesses.
Here are the 5 common strengths and weaknesses of entrepreneurs:
- Calculated risk-takers
- Hardworking and often willing to make great sacrifices
- Great communicators
- Passionate and capable of inspiring others to work towards their vision
- Goal-orientated and driven
- Hesitant to delegate tasks
- Overworking and bad time management
- Having a biased perspective of the business
- Sometimes bored by the administrative aspects of business
- Many entrepreneurs have little management experience
What is a SWOT analysis and why is it important?
A SWOT analysis is an incredibly effective method many businesses use to identify their Strengths, Weaknesses, Opportunities and Threats (SWOT). Strengths and Weaknesses are internal things in your business, and Opportunities and Threats are external things like your industry or your competitors.
Breaking down the SWOT analysis process
Here's a break down of each element that makes up SWOT analysis:
Strengths can be what you excel at, activities that you love doing, a higher level of education you may have, skills you may have that your competitors don’t, talents that can give you an advantage, and/ or things you have achieved.
Weaknesses can be things you really dislike doing, things you avoid doing through fear, or something else holding you back; education that your competitors have that set them ahead of you or negative work habits and personality traits that may be stopping you from achieving your best. It’s important to be brutally honest with yourself when doing this part, so you can really dig out what it is that’s holding you back from achieving all you want.
Opportunities are pretty self explanatory. These can be in your business, for example, changing procedures to make things more efficient. They can also be external opportunities like changes in your industry that you could adapt to, or perhaps something your connections could assist you with. It’s not always what we know, and it can be who we know that could produce an incredible opportunity.
Threats may be direct competitors, obstacles that are holding you back, new technology that you are not trained in, and may not be able to adopt, and even your own mindset that could be stopping you from taking advantage of every good thing that comes your way. If these threats aren’t identified and eliminated, they could be the very end to your business and your entrepreneurial career.
Benefits of a SWOT analysis
A SWOT analysis has many benefits for both individuals and businesses. It provides vital information the business owner needs to work out the most strategic plan for the survival and growth of their business. Include this assessment in any business or marketing plan, and it is worth its weight in gold.
This exercise can also be very useful for individuals as well.
Whether you want to get an advantage in your market, want to increase your profit, or want to take your business to a whole new level, knowing where your strengths and weaknesses lie, and your opportunities and threats are, can be very valuable information.
Doing a personal SWOT analysis can help you identify exactly where you need to improve your skills and abilities, and also let you know what opportunities could present themselves. It also lets you know where the threats are, so you can identify them easily and plan to either navigate around these or even turn them into opportunities.
It’s really good to do this self assessment so that you can really know where you are at and exactly where you could go.
A SWOT analysis can also help you identify how to play to your strengths and how to manage your weaknesses. It can help you work out where your opportunities for growth are, and also help you to eliminate any threats that would stop you from moving forward and really achieving your goals.
How to do a personal or business SWOT analysis
It’s really quite simple. Just divide a piece of paper into four quarters. Title the first square Strengths, the second Weaknesses, Third Opportunities and the Fourth Threats.
Now get ready to really work things out. The harder you work and the more detailed you are in this exercise, the more you’ll get out of it. Remember, what you put in, you get out, so why not give it everything you’ve got?
Here are some very useful questions to ask yourself to fill in each section.
Strengths (this is no time to be modest):
- What advantages does my education level give me over my peers/competitors?
- What skills do I have that give me a competitive edge?
- What talents do I possess that could elevate my position?
- What would my staff or peers say are my strengths?
- What are my values or ethics and how are they different to others in my area of expertise?
- What achievements am I most proud of?
Weaknesses (be brutally honest here):
- What skills or education do your competitors have that you don’t?
- What would your peers and family members say your weaknesses are?
- What negative work habits and personality traits do you have?
- What do you avoid doing because you either don’t like it or because you lack confidence?
- What new trends are happening in your industry?
- In what areas is your industry growing?
- Could new technology help you advance?
- How could your connections help you? It’s not always what you know, right?
- What are the obstacles you currently face in your business?
- Who is your competition? What do they have that you don’t?
- Will new technology or certifications demands slow your progress?
- Do you allow negative thoughts and limiting beliefs to hold you back?
- How is your industry changing in ways that could affect your advancement?
It's best to also get someone who you know well, and who you trust to look over your finished SWOT analysis. This could be a trusted friend, spouse or co-worker. Ask them to be honest with you, as this will give you insight into areas you may not see, whether that be positive or negative. Being brave enough to ask more than one person could really give you an edge and the opportunity to learn even more about yourself than you may have already known.
How to apply your SWOT analysis results
Take your results and study them. Ask yourself what you can do to utilise this fully. What you have in your hand is gold, so make sure you make full use of the tool you have.
Match your strengths and opportunities and take MASSIVE ACTION in those areas. The more action you take, the better result you’ll get. Taking action in these areas immediately may give you an advantage over your competitors who are still sunning themselves or on leave.
If you find that taking action is a problem for you, then this is something to add to your weaknesses… A lot of businesses fail due to lack of action. If you can’t act because something is holding you back, or you have fear around putting yourself out there and taking the bull by the horns, then it is vital that you get this sorted as quickly as possible.
Once you have done this and identified the areas to take MASSIVE ACTION in immediately, match your weaknesses with your threats to assess the issues and problems to improve on. It is very possible to find ways to turn your weaknesses into strengths and your threats into opportunities. Let’s look at this closer.
What do I do with my weaknesses?
What are the weaknesses you wrote down? Look at each of them carefully and see what positive things you could extract from them. For example, if one of your weaknesses was a poor mindset around money, then something positive you could do would be to seek out someone to help you in that area.
If like a lot of business owners I know, you have issues with staff and one of your weaknesses was the ability to deal with that effectively, then that would be a perfect opportunity to hire a negotiator or gain the skills you needed to be able to deal with this better.
Imagine if you had your values and your staff’s values completely aligned. All working towards a common goal to achieve what you have planned for your business. How would that benefit you if the people working for you were all on the same page and all working towards the same values and results? It can be done, you know.
Having a clear mind and a positive outlook can certainly turn most weaknesses into strengths. Being able to negotiate and compromise possible threats into win-win situations can not only eliminate these but can also turn them into amazing opportunities that you didn’t know existed.
If you want to really take your business to the highest level, I recommend doing this exercise at least every few months. As your business grows, you’ll find new strengths and opportunities, and as we are all like an onion with many layers to unpeel, you’ll also find new weaknesses and threats. Doing this every few months will identify these quickly, and then you’ll be able to deal with them so much better.
You could even consider doing this more often too. For example, if you were to do this exercise each time you started a new goal or project, you could work out very quickly exactly what you needed to gain to achieve this particular goal that much sooner.
Imagine having a clear picture of this before starting your next project or goal? What insights would you see and what action steps would you be able to put in place to ensure its complete success? Consider for a moment the laser focus you could have with this knowledge before you started? This would surely be an amazing recipe for success.
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