If you have a new entrepreneur, chances are that you will want to do anything and everything you can in order to make sure that your new business will strive and thrive.
Using a SWOT analysis for your business is a great way to assess the viability of your startup and a crucial component of the Competitive Market section of your Business Plan. First, however, let us examine what a SWOT analysis is. It involves assessing these factors:
A SWOT analysis is valuable in evaluating a product, service, new business endeavor or even a employee. The easiest way to start the SWOT analysis process, is to first ensure you have a SWOT analysis template or worksheet (you can find one at the bottom of this blog!). Start by filling in each quadrant by answering a series of questions. Use the list below to get started, focusing on the questions that are most relevant to your business and current situation.
Strengths: For this quadrant, think about your and your business's attributes that will help you achieve your objective. Questions to consider:
What do you do well?
What are your unique skills?
What expert or specialized knowledge do you have?
What experience do you have?
What do you do better than your competitors?
Where are you most profitable in your business?
Brand strength (do people recognize your business name?)
Unique product or technology
Existing customer base
Strong sales team
Weaknesses: For this quadrant, think about your business's attributes that could hurt your progress in achieving your objective. Questions to consider:
In what areas do you need to improve?
What resources do you lack?
What parts of your business are not profitable?
Where do you need further education and/or experience?
What costs you time and/or money?
Poor online presence
Low gross margin
Low repeat customer sales
Disorganized internal processes
Low customer retention
Opportunities: For this quadrant, think about the external conditions that will help you achieve your objective. Questions to consider:
What are the business goals you are currently working towards?
How can you do more with your existing customers or clients?
How can you use technology to enhance your business?
Are there new target audiences you have the potential to reach?
Are there related products and services that provide an opportunity for your business?
Favorable economic environment (i.e. recession lifting)
Lowered taxes (business or consumer)
New distribution channels
New technology available
Decrease in competition
Threats: For this quadrant, think about the external conditions that could damage your business's performance. Questions to consider:
What obstacles do you face?
What are the strengths of your biggest competitors?
What are your competitors doing that you're not?
What's currently going on in the industry or economy that may cause your business to not be successful?
Changing customer preferences
Dwindling customer base
Changes in government policy
Using Data Compiled in a SWOT Analysis
One of the most important parts of your SWOT analysis is using the data you compiled to identify new strategies and goals for your business. For example, you can:
Create a plan to build up your strengths even more.
List ways you can work on building up your weaknesses.
Set SMART goals for each of the opportunities you identified.
Devise a plan to use your strengths to decrease the threats you identified.
Then, look for ways to combine data from different quadrants in even more ways:
Explore how you can combine your strengths and opportunities to develop new strategies.
Try combining strengths and threats to identify threats you can eliminate.
Look at your weaknesses and opportunities to create a list of areas ready for improvement.
Make a list of areas to avoid that fall under weaknesses and threats.
Once you understand how to compile your SWOT data and find ways to use it strategically, the SWOT analysis will be a tool that you can use over and over in your business to explore new opportunities and improve your decision making process.
We perform SWOT Analyses all the time! They are a critical component of a startups marketing strategy & business planning process. The attached SWOT Analysis Toolkit contains great tools to successfully perform a SWOT Analysis.