How to Conduct a SWOT Analysis for Your Small Business
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Owning a business is an exciting prospect, but it’s also something to be done with caution and care. One way to make sure you’re running your business properly is by conducting a SWOT analysis, a common analysis technique used by businesses and investors. The benefit of a SWOT analysis is that it not only looks at your strengths and weaknesses, it also forces you to look outside your business at the rest of the world. Let’s look at the four areas included in a SWOT analysis:
Strengths – These are not only what your business is good at but what your business is good at compared to your competition. What exactly can you offer your customers that no one else does? What is going to bring business to you instead of your competitors? Knowing your business’ strengths can help you capitalize on them. You can use your strengths as the highlight of your marketing and advertising.
Weaknesses – Finding your weaknesses may take a bit longer than finding your strengths. The best way to discover your weaknesses is to look at it from your customers’ perspective. Are they waiting longer for a product? Are you difficult to communicate with? If you are having trouble finding your weaknesses, try asking your customers!
Opportunities – Opportunities are the ways your business can expand, grow, and increase profit from the outside instead of the inside. This could mean expanding into a new product or a new market. Or it could be as simple as outsourcing part of your work to increase available time or to reduce costs.
Threats – Threats are things in the outside world that threaten your business. They could be anything from competitors in your market to new laws and regulations or new technology that could take a bite out of your business. While you can’t protect against every threat, it’s good to be aware of them and make back-up plans to protect yourself and your business.
Discovering these items is one thing; what’s more important is that you use this knowledge. Use your strengths to your advantage and fix your weaknesses. You also need to protect against threats and venture out into new opportunities. And remember to balance all four of these items. Don’t focus on just one!
While SWOT is not an all-encompassing analysis technique, it is a great way to get think realistically about your business prospects. Doing your research also help you learn your industry and even get you started on making business connections.
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