What is a SWOT Analysis? A SWOT analysis is a process by which you evaluate your company’s strengths, weaknesses, opportunities and threats. There are many advantages to creating a SWOT analysis for your business, including identifying areas where your company could expand or grow. In addition, this exercise may help you identify your marketing strategy as it will show you how your company differs from your competitors. You may also identify areas where your business may improve. Finally, a SWOT analysis may even help a business mitigate risk. This is an invaluable tool that I recommend every business to use at least once. However, this task is something that you should complete as frequently as your business requires depending on how often your situation is changing.
Strengths are internal strong points for your business. For example, if you own a business that sells dog food, you’ll want to consider what makes your dog food better than the competitors. Maybe your dog food is all natural, maybe it is made in the US, or maybe you make it batch by batch yourself. These are the things that are going to support your claims of being the best and ultimately get your target audience to make a purchase, or interact with your business. Realizing what your strengths are helps you play on those strengths. Use them wisely!
Weaknesses are internal weak points for your business. If we go back to our dog food example, your weaknesses may include only local shipping, store front only, or lack of web presence. Each of these items are things you can control and can be weak points or trouble areas for your business. The good thing about identifying these areas is that it leaves the possibility open to fixing these issues and making them strengths. For example, you can flip local only shipping to be a good thing with the #smallbusiness trend. There are several ways to turn your weaknesses into strengths, but the first step is always identification.
Opportunities are external strengths or things you can build upon to grow your business. Going back to our dog food example, your opportunities could include building your social media presence, building a web presence, shipping nationally, creating eco-friendly packaging or any other number of opportunities for growth. This section is a tool to determine how you can better serve your customer base and grow and expand your business. For example, maybe your consumer wants to be as eco-friendly as possible. Now, because you are aware of the opportunity, you can fill this gap by creating eco-friendly packaging and reducing your business’s carbon footprint.
Threats are external weaknesses. Threats can be things like your competitor offering international shipping, the cost of running a storefront, or any other challenge that might threaten your businesses growth. Recognizing these threats gives you an advantage. It also gives you the chance to move your threats to the opportunities column. For example, let’s say that your dog food business has high overhead costs, and that is a threat you have identified. You have rented a storage space for all of your business documents, formulations and other important business paperwork. The storage unit costs $1000 per month. You decide to digitalize all of your documents and invest in a scanner. Now you have lowered your monthly overhead and you can say you are an eco-friendly company because you are paperless.
SWOT analysis can identify strengths, weaknesses, threats and opportunities for your business. SWOT gives you the vital information about how you can grow your business or protect it from threats. Taking the time to evaluate what makes your business strong and what you could improve upon will ultimately benefit you, so keep at it!