A SWOT analysis is a great way to determine the strengths, weaknesses, opportunities, and threats that exist for your business. It also an essential element for your business success. It is a great tool to use when you start your business and to use periodically as your business grows.
You can do a SWOT analysis for almost any objective you have for your business as well as planning your marketing and sales strategies.
To perform a SWOT analysis, you’ll want to create four quadrants with the labels, strengths, weaknesses, opportunities, and threats. You’ll want to label the quadrants into two parts, strengths and weaknesses as internal, opportunities and threats as external. Focus your SWOT analysis only on one specific area – i.e. over all business, business growth, marketing, sales. If you have additional objectives, consider working on them in a separate SWOT analysis. As you consider your specific area, write down the information you gather in each corresponding quadrant.
Consider all the factors that can affect that particular objective, such as the political, economic, sociocultural, and technological issues that you may face in the future with your industry. Because this is your own business, you may also want to include personal issues that may affect your business continuity. For example, being a single mom of two, nearing retirement age, key employees, etc. are factors that might affect your business or your ability to do your business.
Once you write down all the factors you can think about in each quadrant – i.e. strengths, weaknesses, opportunities and threats – you’ll want to review them. Here are some questions you may want to consider: How do your strengths affect your opportunities? How do your threats affect your opportunities? Which of the weaknesses could become strengths if you made changes? Look for areas weaknesses you can convert into strengths by outsourcing, educating yourself or buying technology. Are there any threats to the continuity of your business that you can eliminate through planning?
Here are some examples:
- Every year, you likely have the opportunity to buy software for an entire year at a less expensive cost. The impact over all would be lower cost but if you don’t have the savings to purchase it for the entire year, you can’t make the purchase. You would also be giving up funds that you may need for other purposes during the year.
- You have only one team member who can perform a critical business task. The employee decides to leave or is disabled. Do you have a plan as to how that task would be performed? Could it be outsourced? Should you cross train another team member to take on that task?
- You have identified a particular software you use for a large portion of your business activity during your SWOT analysis, what would happen if that software were no longer available to you?
A SWOT analysis often reveals issues you can mitigate to avoid business failure and generate growth opportunities you may have overlooked. It provides a chance to identify options before having the problem so that you can seamlessly change if needed. It will help you to go through your daily, weekly, monthly, and yearly processes to fully identify any strengths, weaknesses, threats, and opportunities so that you automatically build in resilience into your business.
Debra Austin
Debra Austin is a business coach, consultant, speaker and facilitator. She helps owners simplify business growth so they reclaim there dream of business ownership. She is a graduate of Purdue University (BS) and Southern Methodist University (MBA). She is also recognized by International Coaching Federation as a Professional Certified Coach (PCC).