You might have heard about a “SWOT” analysis, but have you ever created one?
SWOT analyses can be used for everything from making a decision on where to go to college, to whether to outsource work in your business, or how to set your strategic plans. You need to perform a SWOT to get the lay of the land. It is a way to compare yourself against the competition in four specific areas to determine your differentiators and build a brand to support the business mission.
A SWOT analysis is like a snapshot of a moment in time. To stay on top of trends in your industry, it’s a great practice to use this tool with your employees—or as a solo-preneur—on a regular basis.
What does SWOT stand for?
S = Strengths
These are internal factors in your business that are strong and help you reach your goals. Things like the experience on your marketing team, your brand’s recognition, market share, strong customer relationships, et al, are on this list. These internal factors are the ones you can control.
W = Weaknesses
Weaknesses are also internal factors within the company’s control. I know it’s hard to imagine you would allow weaknesses, but that’s not the spirit of this section. There’s always room for improvement. Is there a particular type of customer you’re having trouble serving? Are you finding it a challenge to hire the right people? How are your cash reserves? The best source for determining your weaknesses comes from your customer service data. What are people asking your business to improve and why?
O = Opportunities
Too often, small business owners are internally focused. The SWOT tool prods us to look at the trends in our external environment, and the trends that offer potential for business growth are listed in this Opportunities section. Here you list trends like a boom in online promotions, niche publications for marketing, a competitor exiting the market, or changes in consumer preferences that lean in your company’s direction. As a business owner, if you can’t control the factor, yet it helps you, this is where to put it.
T = Threats
The opposite of opportunities are trends in the industry that hinder your company’s growth. If spending on corporate training is trending down and you’re a professional speaker, that’s a threat. Consider trends in demographics, buyer preferences, competition, marketing platforms, and the economy. Remember to include external factors and those you can’t control, but will impact the functioning of your business in the short and long term.
To bring a SWOT analysis to life, I’ll show you the one I used when I created a children’s educational product called “Bye Bye Monster” (BBM).
This product (a complete bedtime solution to help children ages 4–12 years who struggled with nighttime fear) aided the children by empowering them to overcome those fears on their own through imaginative play, so they could successfully sleep through the night.
Ideally in your SWOT analysis, you’ll want three to five items to appear in each panel of the analysis.
Does the idea of a SWOT analysis make more sense now that you’ve seen an example? I would encourage you to give it a try and create one based upon what you know right now about your business. Remember, you can always add to and/or modify it as you go.