Conduct a SWOT analysis for your business

How could a home business possibly require something called a SWOT analysis? The name sounds confusing and far too serious for a small business, right? Wrong.

Despite the perception that a home business is simpler or maybe even less serious than the guys on Main Street, it is false.

When you rip open the chest of any business, you will find the same working components in each enterprise. No matter the size or scope, every business will find incredible value in conducting a routine SWOT analysis.

The SWOT analysis should be a business tool available in the toolbox of any small business owner. However, running a business forces you to focus on the issues and fires burning today, not tomorrow. Learn how to apply a SWOT analysis to your business and position yourself ahead of competitors.

What is a SWOT Analysis?

A SWOT analysis may sound like a form of mission planning for a famous actor like James Bond. A SWOT simply stands for: Strengths, Weaknesses, Opportunities and Threats. Each area forms a box on a grid and you fill in each section to help formulate a marketing strategy.

Strengths and weaknesses focuses your business to look internally at what your business can do. Many businesses are great at looking inward but fail to look outside their company. Threats and opportunities are external; focusing on the conditions of the real-world. This is where a SWOT analysis is helpful. It challenges you to see beyond your company walls to determine what opportunities are open for your company and how to capitalize on your strengths.

While most of your analysis will be subjective, the SWOT can provide multiple benefits to your small business. These benefits can include: Insight into where your business can focus to grow; increased understanding of the industry; focus on advertising and marketing that give you a competitive advantage in the marketplace; foresight to see looming threats and react proactively.

To develop your own SWOT analysis, consider each section with a certain degree of practicality and be specific. Your customers will know you in the marketplace for certain attributes or things that make them say, “WOW.” Don’t forget the complaints of late shipments or customer issues. To effectively complete a SWOT Analysis for your organization, consider the following questions.

Strengths: Remember, strengths in business has to do with positive aspects and assets you have in your business. Consider your strengths relative to your competitors and from your customers’ perspective. For example, all your competitors may sell using the telephone, whereas you use direct face-to-face selling. Anything a customer wants that you provide and your competitor doesn’t, can be a possible strength.

Weaknesses: These are areas where you lack competence. You need to know what’s not working to keep your weaknesses from closing you down.

It is far easier writing down your corporate strengths than weaknesses. Think of objections your customers raise during the sales process.

Opportunities: These are areas you can improve or expand upon. Your small business is influenced by the external environment, such as: legal, political, technological, and cultural factors. Consider what can make your business obsolete, and what will replace it. Threats can become opportunities or vice versa.

Threats: These are the things that can hinder your success.

The SWOT analysis is the starting point of strategic planning.

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