Why Complete A SWOT Analysis?
A SWOT Analysis is the perfect tool for small business owners to evaluate their companies.
What is a SWOT Analysis?
A SWOT Analysis is a technique used to determine the Strengths, Weaknesses, Opportunities, and Threats for your business.
Part of your business Plan includes the results of your SWOT Analysis. This is composed of answers to questions in each of the four areas.
Strengths = What your company does well. It should include your superpower, and what you do better than your competition.
Weaknesses = What areas of your business need improvement. Are we well known or unknown? Do we suffer from cash flow problems?
Strengths and Weaknesses are internal factors. Opportunities and Threats are external factors that may be harder to determine. Identifying Opportunities and Threats may require questionaires and other social media methods to determine economic or business trends.
Some questions will be ones you develop by comparing your offerings to your competition. Look at what regulations or market volatility could be considered threats. These include Political, Economic, Social, and Technological factors.
Be sure to include issues like high employee turn-over, location, reputation, ad budget, competition, community focus (tourism, college impacts, sports). Labor pool, etc.
Opportunities = Is our target market growing or shifting in our favor? Is there an untapped pain point or niche market? Are there potential new sources of financing?
Threats = Is our target market shrinking or shifting? Could any indirect competitor become a direct competitor? Any new technology that could work against us?
Each of these areas need thoughtful exploration through questions and answers. Taking time to explore what questions to ask will benefit your company in the long run.
What now?
Time for your business journal. Write about your strengths and how they align with your opportunities. Then see about converting your weaknesses into strengths.
Here’s how –
- Harness your strengths - “Do more of what you’re good at:
- Shore up your Weaknesses – Your honest assessment of your companys’ weaknesses gives you’re an opportunity to grow.
- Seize Opportunities – Knowing where you need to improve gives you an actionable list of targets to aim for. Don’t assume any iron-clad advantages over your competition gives you the freedom to ignore that strength. You must devote sufficient time, energy and money to maintain any advantage you have.
- Mitigate Threats – Threats are external factors and there’s only so much you can do to mitigate any potential damage of factors beyond your control. Every threat and response will be different. At the least, you must respond and monitor all threats at a high enough level to be prepared to make a response. DO NOT IGNORE THEM.
As you complete your Quarterly Reset, review your SWOT Analysis. Compare your action items to your goals to be sure they are still aligned. And don’t hesitate to make necessary changes to either. We’ll look at goal-setting next.
Working ON your Business is as important as working IN your business.
Download a complimentary SWOT Analysis Chart – one with questions and a blank to get you started (courtesy of Wordstream.com) Use your journals and #Write To Your Success!