SWOT Analysis is one of the most powerful tools for any business. However, it is especially useful at the startup stage of your operation, a time when you need a full, objective overview of your company in its current state, the situation it is in and potential opportunities it can leverage as well as threats it needs to protect itself from.

A well created SWOT Analysis will allow you to take a good look at your business and formulate a plan for its growth and expansion. For that to happen though, you need to make sure that you do all of the following when creating your SWOT Analysis:

Conduct Proper Research

The biggest danger in any analysis is guesswork. It is easy to use estimates and wishful thinking in your answers, however, if you want your SWOT analysis to give you a clear and complete picture of your business, you need to ensure that you conduct all necessary research before committing anything on paper.

Objective Answers

It is easy to fall into a trap of looking subjectively at your business while working on your SWOT Analysis. The key to having it done properly is to have it fully objective. When thinking of your strengths, don’t overestimate anything, be precise and if you must, give details and examples of each strength to make sure that they are real. When working on your weaknesses, let what you think of yourself do not determine the answers but be brutally honest.

Actions Based on Results

There is no point in creating a SWOT Analysis if you do not act on the results. Once you have completed your analysis, formulate a plan to leverage your strengths and opportunities and minimize weaknesses and threats. Make sure that you commit them to paper, write a list of tasks to complete and create an action plan to make it happen.

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There is no point in creating a SWOT analysis and then not doing anything with the results. However, it can be quite difficult to analyze the information you have gathered and building an action plan based on it.

Maybe you see your business as evolving naturally and don’t need to implement your SWOT analysis results rigorously, or perhaps you simply don’t know how to use your findings to improve your company.

What follows is a short guide on what to do with SWOT Analysis results.

The goal for creating a SWOT Analysis is to give yourself a broad overview of your business as well as to identify opportunities and issues in your business. All this data enables you to do the following:

• Improve your strengths
• Eliminate weaknesses
• Leverage opportunities
• Defend your business from threats

The best approach to this is by asking yourself such questions as:

• What can I do to make my strengths even more powerful?
• What do I need to change to eliminate or minimize my weaknesses?
• How can I use the opportunities to my advantage?
• What should I do to protect my business from emerging threats?

But remember that the most important thing here is action. Since SWOT Analysis is a descriptive exercise, it is easy to stop there and do not implement your findings at all. In fact, this is a quite common mistake many startups make once they created their SWOT Analysis results.

Biggest danger with processing SWOT Analysis results

There is one thing you must be aware of when analyzing SWOT data. It is very easy to fall into a trap of using it to justify your actions and decisions so far, no matter how right or wrong they were.

The goal of SWOT analysis is to give you an objective outlook on your business, therefore you need to make sure that any previous decisions or course of action must be kept out of your SWOT.

Also, when working on such elements as weaknesses and threats, you must be objective about yourself and your business. What you think of yourself does not matter, you must give an objective overview of you and the company here.

• RELATED: What is a SWOT Analysis
• RELATED: 20 Questions to Ask During a SWOT Analysis
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Creating a SWOT Analysis marks a huge milestone in launching a business. Having it done gives you a full overview of your business idea, what will work, what elements need improving and what you should look out for.

SWOT Analysis is an acronym for Strengths, Weaknesses, Opportunities and Threats. To describe it as simple as possible, it is a tool that gives you a chance to look at internal (strengths and weaknesses) and external (opportunities and weaknesses) elements of your business. SWOT Analysis allows you to look at your business and figure out what you need to work on, what parts of it you should improve (or modify, even at the concept stage of it) and what potential problems may await for you in the future.

Let’s look at the four elements of a Swot Analysis in detail.

Strengths

This element is all about why you should succeed? In here you have to list all the strengths of your company. Some of the questions you need to answer here are:

• What makes your company special?
• What do you do well?
• Why customers would enjoy doing business with you?

and more.

Weaknesses

In order to succeed in business, you need to be aware of your business’ weaknesses. Any limitation or a resource you are lacking will affect your company’s performance. You need to think what you can improve in the business, what is blocking its development.

This is the part where you have to be brutally honest with yourself.

Opportunities

The third part outlines the opportunities that you could leverage to grow your business. Maybe there are some emerging trends you could use to your advantage? Or perhaps you are aware of some customer needs that are not being met by your competition?

Threats

Lastly, you need to look at any threats to your business. These would be any obstacles on your way to success. These can be actual or even potential, things you are afraid of. Debts, cash-flow, slow sales but also competition, new trends, equipment and many more could pose a serious threat to your company and you need to be fully aware of those.

The important thing to remember when creating your SWOT analysis is that you must be brutally honest. This is not the time to disguise things, you need to be fully aware of them in order to be able to overcome any obstacles.

• RELATED: 20 Questions to Ask During a SWOT Analysis
• RELATED: What to Do with SWOT Results 
• RELATED: How to Get the Most Out of Your SWOT Analysis

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Image by Flickr user, hanspoldoja licensed under creative commons license.

One of the most effective ways to create a SWOT analysis is by asking yourself certain questions regarding the four elements of SWOT. Below is a set of questions you can easily use to create your own SWOT Analysis.

Strengths

• What are your assets?
• Which one is the strongest?
• What differentiates you from competition?
• Is your business debt free? Or are you personally debt free?
• Do you have any specific sales/marketing experience that can help you grow a client base quickly?

Weaknesses

• What expertise do you lack?
• In what areas your competition might be better?
• Do you have a steady cash flow to keep the business afloat?
• Do you have any debt?
• Is your business idea changeable, adaptable or are you fixed to one idea only?

Opportunities

• What (possibly new and emerging trends) might impact your industry?
• Are your competitors failing to service the market properly?
• Are there any new trends you could use to leverage new services?
• What external changes might present new opportunities?
• Is there any demand on the market no one seems to be fulfilling that you could use to your advantage?

Threats

• Is there a better equipped competitor on the market?
• Do you have to rely on 3^rd parties for crucial aspects of your service?
• What new developments might affect your customers’ situation?
• What if your supplier runs out of their stock, do you have plan B?
• What if your main marketing idea fails?

Some of these questions are tough, I know. Some require you to look at some aspects of the market you possibly wouldn’t like to know about (better competition, your finances, your personal debt that might affect the future of your business and so on). Others might reveal what you don’t know about yourself, or your idea and that is all the point of it.

Give honest answers to all those questions and you will better understand the nature and the environment your business will be facing.

What to do with a SWOT analysis data

Well, the real work starts once you have your SWOT Analysis right in front of you. Now is the time to think how you can leverage your strengths, minimize or even eliminate the weaknesses, overcome the threats and use all the opportunities to your advantage.

What I always recommend is to make a list of actions you should take on each of those items and simply work on them one by one. This will ensure that you will tackle them all, maybe even before your company launches (that is what I plan to do).

• RELATED: What is a SWOT Analysis
• RELATED: What to Do with SWOT Results
• RELATED: How to Get the Most Out of Your SWOT Analysis

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