3 Steps to Do Swot Analysis

The SWOT analysis is an important part of the business plan. It is also a very helpful tool for existing companies to identify opportunities and risks in the business model.

The aim is to define measures, how opportunities can be used and risks minimized. Get to know the method using our example of a SWOT analysis and use our free SWOT analysis tool.

If necessary, contact an experienced coach who will assist you with the analysis as part of the supported consultation.

SWOT analysis for founders and successful entrepreneurs

After you have worked as the founder chapter for chapters of your business plan, the last important point before the Executive Summary is the SWOT analysis. Ask yourself in a self-critical way, where deficiencies can be found alongside the many strengths of your start-up. This also leads to the question of the opportunities and, in particular, the risks to your creation.

The SWOT analysis is also an important tool for existing companies and should be implemented at least once a year. The market is constantly changing and the question is, where perhaps new opportunities arise or risks arise

Step One

The SWOT Analysis – English for Strengths, Weaknesses, Opportunities & Threats – begin with the first two letters: S & W, Strengths & Weaknesses.

This involves an objective examination of one’s own strengths and weaknesses. The question is where your company has deficits and in which areas you have strong strengths.

Their own strengths and weaknesses are in relation to the competitive advantages and disadvantages of the direct competitors. In this respect, the first step of the SWOT analysis is based on a well-founded competition analysis.

In the first part of the SWOT analysis, perform all relevant factors for your business model and compare your characteristics with those of your competitors. In your own assessment of the relative strengths and weaknesses – that is, the S & W of the SWOT analysis – try to be as neutral as possible. You can find out more about competition analysis here.

Step Two

The second part of the SWOT analysis is about factors that are and could be relevant to your business model now and in the future – it is about trends. You have already worked out these factors in the market section and especially in the area of ‚Äč‚Äčcompetition.

Write the most important trends for your industry for your SWOT analysis. The best way to do this is to use the “top-down” variant:

The big trends: First, describe the big trends that may be relevant to your market (such as demographic change, economic environment, changing consumer behavior, etc.)

Your market: Mention the key factors that are specific to your market (e.g., customers are increasingly demanding organic products, etc.).

Your competitors: Another important factor for the future development of your company are your competitors – how does the competition situation (eg the top 3 have a market share of 80%, price pressure, etc.)

The goal is that in this part of the analysis, you write down all the trends that are relevant to your business model and which could be especially in the future. In a second step, the max. 10-12 most important out-filtering out trends.

If you then compare these trends to the respective strengths and weaknesses, you can easily determine whether the respective trend can be used as an opportunity or whether an important market change is a risk to your business model.

Step Three

With the strengths / weakness profile, the trends and the resulting opportunities and risks, you have worked out the essential elements of the SWOT analysis.

Now it is important to determine the appropriate measures to reduce the most important risks and to benefit from the opportunities.

In this part of the SWOT analysis, write down in detail how you will react to the most important 3-4 risks and what measures you plan to benefit from the 3-4 opportunities. Use our free SWOT analysis tool, which will lead you step by step to your finished SWOT analysis.

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