SWOT Analysis for Small Businesses
Compiling your company’s Strengths, Weaknesses, Opportunities and Threats, SWOT is designed to help you and your team gain complete awareness of all the factors involved in making big business decisions, such as new initiatives, revamped policies, or market pivots.
When it comes to such decisions, performing a SWOT analysis will help you develop a strategy that leverages your business’s strengths and opportunities, while recognizing its weaknesses and threats.
Whether you’re just starting out or have been in business for years, the same principles will apply.
Learn From Everyone
To perform a successful SWOT analysis, you will first want to gather people from all levels of your company. Include everyone from the business’s leaders, to marketing and research, accounting, sales and customer service, and suppliers. It’s in these groups that you’ll find entirely different perspectives that will prove critical to your analysis. You can even ask your customers to chime in. The goal here is to cultivate a unique mix of viewpoints, each representing a different aspect of your business.
Utilizing the various perspectives available to you, determine where your business is at a competitive advantage. Look to which business processes are successful, as well as the assets you possess—both intellectual and physical, such as knowledge and expertise, network, skills, goodwill, equipment, technology, cash, and intellectual properties. Strengths are typically internal and within your business’s control.
Afterwards, you will want to determine which areas in your business could use the extra attention. Detracting from your strengths, weaknesses can come in the form of knowledge and expertise gaps on your team, inefficient business processes, a poor physical location for your shop, or a need for more money and or specialized equipment. The big, yet simple, question here is “What are some of the things that your business needs in order to become (or remain) competitive?”
Opportunities look to the external factors in your market that can potentially contribute towards the success of your business. These may include forecasted market trends, any upcoming events that your business can take advantage of, and regulation changes that will work to your company’s benefit. The focus here is on whether or not your market is growing and what possibilities can further foster said growth.
As external factors that you possess little-to-no control over, threats are best dealt with through contingency planning. Look to changes in consumer behavior, technology, and market trends, as well as potential competitors who may enter the market. Are there any market trends or changes in consumer behavior that could threaten your company? How about developments in technology that can change how you do business? Will suppliers always be able to provide the raw materials you need at the prices you can afford? Threats can’t be changed, only safeguarded against, so tread carefully.
Conducting a SWOT analysis is a great way to bring your team together in a collaborative effort that will provide an assessment of your business’s present situation, as well as a strategy for the near future. A SWOT analysis will organize your top strengths, weaknesses, opportunities, and threats in a way that will allow you to see where you exercise control, and can thus influence change, and where you don’t. Keep in mind that because the market is always changing, ideally a new SWOT analysis should be conducted every 6 to 12 months.
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