Whether you’re new to running your own small business, or whether you’ve been going for a while, conducting a SWOT analysis can help your business get on the right track. I tend to glaze over when someone talks about something that sounds like it will be difficult, or something that I might not understand, but SWOT analysis is a very simple concept, which can give you great insight into your business and generate ideas to take your business forward.
What is SWOT analysis
The term SWOT is an acronym devised from four words; Strengths, Weaknesses, Opportunities and Threats. Conducting analysis on your business in these four key areas help you look at internal and external factors that affect or have the potential to affect your business. It’s a good idea to conduct this analysis before you set up your business and marketing plan as it will help you develop your business strategy.
You could also consider performing a SWOT analysis on your competitors, as this will give you valuable insight into their strengths and weaknesses…and may identify opportunities for your business that they haven’t thought of.
Where do you start?
A SWOT analysis is about making a list in four key areas:
Strengths – list what your strengths are…the aspects of your business or project that gives you an advantage over others. What do you do well?
Weaknesses – these are factors that put you at a disadvantage to your competitors – what don’t you do so well?
Strengths and Weaknesses are the internal factors of your business.
Opportunities – what are the opportunities you can see for your business? You might be able to spot opportunities from new technology, new potential markets for your products or services, or even lifestyle changes or local events.
Take a good look at your strengths and see if any of those can be converted into opportunities. Similarly, you may be able to work on your weaknesses to eradicate them and open up new opportunities.
Threats – do you have any hurdles you have to overcome with your business? Are any of your weaknesses a serious threat to your business? Look at what your competitors are doing to be successful – is there something you can change to compete? Of course, there are other threats to take into consideration, such as bad debts or loans.
Opportunities and Threats are the external factors of your business.
Who can help you?
A SWOT analysis can be completed by you, but it’s always good to have another opinion, so draft in some help. Ask friends, employees (if you have them) and maybe even some of your customers – ask them what they think are your strengths and weaknesses. You may be surprised at the answers and it may help you to pull together a strategy to help you succeed further or improve an area of your business.
Once you have all the information you need, you can devise a strategy to capitalise on your opportunities and reduce your threats. Concentrate on these two areas first as they are the most likely factors that will affect your business and your future success.
Then you can work on your weaknesses and protect and increase your strengths.
When you have completed the analysis, go through your business and marketing plan to see if you can enhance any particular area of your plan.
Print off my FREE Conduct a SWOT Analysis worksheet and get started now!I