“So what is a SWOT analysis?”
Not one of my small business clients has ever asked me that question, so why am I bothering to write about it?
Well, because it’s something that should be on the radar of all small businesses and it isn’t.
SWOT stands for Strengths, Weaknesses, Opportunities and Threats and it’s a technique taught in business school, to help companies assess whether their business objectives are viable.
Larger businesses with integrated marketing departments often do a SWOT analysis as part of a marketing plan, but it can come in very handy for much smaller businesses, too.
Here’s how to make a SWOT analysis work for your business.
First of all, figure out what your next business goal is. Do you want to get more clients? How many? Are you thinking about launching your latest product? Do you want to introduce a new service?
Whatever it is, doing a SWOT analysis will help you figure out whether your goal is realistic.
Grab a pen and paper. (Yes, I know you could use a word processor, but sometimes this kind of reflective thinking is better done away from the computer.)
Make four columns headed Strengths, Weaknesses, Opportunities and Threats.
Now start filling in each column. The hardest part of this exercise is to be honest. Everyone can list strengths, but it’s tough on most of us to list our weaknesses. Ditto for Opportunities vs. Threats.
Here are some ideas for the kinds of things to put in each column. Strengths and Weaknesses are more about you and your company, Opportunities and Threats are more about the environment in which you operate.
- strong customer base
determination to succeed
time for project development
- poor customer service
lack of writing skills
no sales experience
poor ability to delegate
- new target markets in vicinity
competitor business collapse
changing social trends
- new taxes
price slashing by competitors
changing social trends
Did you catch that? Look at the Opportunities and Threats examples. The last two are the same in each. That’s because it’s perfectly possible for any issue to be either an opportunity or a threat, depending on your own particular circumstance.
Once you’ve got your columns completed, take a good, hard look at what you’ve written. Is there anything that stands out as a real weakness? Is there something that will make it much harder – or easier – to reach your goal than you thought?
Weaknesses can be strengthened, ignored, or fixed by bringing in outside resources. You may or may not have any influence over external threats. Similarly, your strengths may convince you that you’re on the right track or you may see that your advantages would be better used towards a different goal.
So, the answer to “What is a SWOT analysis?” turns out to be that it’s a practical, quick way to help you boost your business. Now stop reading and get swotting.