Are you on your way to starting a small business in the near future? Do you already own a business and have a list of goals to take it to the next level? Are you contemplating incorporating new revenue streams to help grow your bottom line? Or maybe you’re thinking about tapping into a new niche?
No matter what your goals are, they should always be approached with a plan and a strategy. It makes for a good story when spontaneous actions work out, but the likelihood of having a glamorous story with this tactic is few and far between. Each of your ventures should be positioned with the highest probability to succeed and taking specific measures early on can make it happen.
A SWOT analysis is an effective and efficient way to evaluate the Strengths, Weaknesses, Opportunities and Threats inherent in your next business venture or project. It gives you an organized framework to think about key objectives in light of internal and external factors. You can weigh the factors that are favorable, and more importantly, unfavorable as you strategize and determine your plan for a profitable future.
Here is what you should consider under each element of the analysis:
Strengths. What does your business do best? What gives it its edge? Why do customers choose you? What factors help you “close the deal?” As you answer these questions, you’ll notice that you’ll not only look inward but you’ll also consider external perceptions as you evaluate how the market views your brand.
Weaknesses. What are some areas of improvement? What do most competitors do better? What are some customers’ needs that you haven’t yet addressed? What should you completely avoid? Admitting areas of improvement is never easy but honesty allows you to get help in these areas and focus on where you excel.
Opportunities. What is happening in the market? What are some trends that you can benefit from? Are consumers’ tastes in line with what services or products you offer? Find out what needs are not being met and think of how you can provide solutions. Get outside of your own head and business, reach out to others, find out what is happening and more importantly, find out what’s next. Create ways to be innovative.
Threats. What are some things in the market that you should be mindful of? Is the market already saturated with major competitors providing the same services and products? Are there laws and regulations that will make it difficult for your business to continue? Are technological changes threatening how you’ve always done business?
Additional Tips:
- Create your objective after you’ve created and evaluated your SWOT Analysis. You’ll have more insight and direction this way.
- As you create a list under each section, prioritize them. Some things will definitely be more time-sensitive than others.
- Match your strengths with opportunities and also find ways to convert weaknesses into strengths.
You can create a SWOT analysis alone or you can make it a team-building exercise and leverage off the insights of other people in your business. In groups, it not only provides an opportunity to get everyone on the same page but it also lays the foundation for a shared vision.
When you keep a big-picture perspective and you’re honest about all likelihoods, you develop a more realistic sense of expectations and you are better prepared. A SWOT analysis can help you narrow your focus, avoid pitfalls, develop a plan based on what is realistically attainable and implement a strategy. As an added bonus, you get insight about your positioning and direction in the market.
Have you used a SWOT analysis before? What did you learn during the process? How did it help you?
Dasanj Aberdeen is an entrepreneurial spirit who embodies the combination of left-brain logic and right-brain imagination as a businesswoman and artist. She founded TheAfter5Edge.com as a platform for encouraging others to optimize their potential by discovering and leveraging their strengths to obtain their competitive edge. She is a graduate of the Wharton School of the University of Pennsylvania. Follow her on Twitter at: @TheAfter5Edge.
