What is a SWOT Analysis?

A SWOT analysis consists of four key elements:

1. Strengths

2. Weaknesses

3. Opportunities

4. Threats

Strengths refer to the internal attributes and resources that give an organization a competitive advantage, while Weaknesses are the internal factors that may hinder performance or detract from value.

Opportunities are external factors that the organization can leverage for growth or improvement, and Threats encompass external challenges that could pose risks to the organization's success.

Together, these elements provide a comprehensive framework for assessing an organization's strategic position and informing future decision-making.

Did you know there can be a second “T” in a SWOT(T) analysis?

In the ever-evolving landscape of modern society, this second "T" in the equation can often be just as significant as the first. Trends.

Trends have the ability to influence our preferences, our behaviors, and even our values, creating a ripple effect that can be felt across industries and communities. Understanding and adapting to these shifting tides can be the key to a small business’ success.

A SWOT analysis is essential for small business owners as it provides a structured method to systematically identify and thoroughly understand their internal strengths and weaknesses, along with the external opportunities and threats that can impact their success.

Implementing a comprehensive SWOT analysis at the beginning of a business journey allows owners to set clear, measurable objectives and develop well-informed strategies that leverage their inherent strengths while effectively addressing any existing vulnerabilities.

Throughout the entire business life cycle, regularly revisiting this analysis helps adapt to changing market conditions and evolving business dynamics, ensuring ongoing relevance and resilience in a competitive landscape.

Additionally, when collaborating with consultants or an ownership group, a SWOT analysis serves as a valuable tool for fostering open communication, aligning shared goals, and generating actionable insights that drive collective decision-making and strategic planning efforts.

How to DIY a SWOT (small business edition)

Step 1: Gather Your Team

• Assemble a small group of key stakeholders or team members who not only understand different aspects of your business but also those you trust to be honest about the current state of the finances, operations, customer satisfaction and team morale.

Step 2: Define Your Objective

• Clearly outline what you want to achieve with the SWOT analysis. This could be for a new product launch, a market expansion, or general business strategy. If you have never performed a SWOT before, do a “big picture” analysis and then use it to inform future deep dives into specific objectives.

Step 3: Create Four Quadrants

• Draw a simple grid with four sections labeled:

  • Strengths

  • Weaknesses

  • Opportunities

  • Threats

  • Trends (add this as a fifth section in a circle around the quadrants)

Step 4: Identify Strengths

• In the Strengths quadrant, list internal attributes that give your business an advantage (e.g., strong brand, loyal customer base, unique products).

Step 5: Identify Weaknesses

• In the Weaknesses quadrant, note internal factors that may hinder your business’s performance (e.g., limited resources, lack of experience, high employee turn over).

Step 6: Identify Opportunities

• In the Opportunities quadrant, outline external factors that could benefit your business (e.g., emerging markets, changes in consumer behavior, strategic partnerships).

Step 7: Identify Threats

• In the Threats quadrant, list external challenges that could negatively impact your business (e.g., competition, economic downturns, seasonal cash flow).

Step 8: Analyze Trends

• In the Trends section, examine industry trends, economic shifts, or consumer behavior patterns that may affect your business. Discuss how these trends are likely to influence your strengths, weaknesses, opportunities, and threats.

Step 9: Discuss and Prioritize

• Review the lists as a team. Discuss the implications of each item and prioritize them based on their potential impact on your business. Think about how all 4 (or 5) quadrants impact one another.

Step 10: Develop an Action Plan

• Use the insights gained from your SWOT analysis to create an actionable strategy. Identify specific steps your business can take to leverage strengths, address weaknesses, seize opportunities, mitigate threats and experiment with trends.

How to DIY a SWOT Analysis (solo entrepreneur edition)

Step 1: Set up your work space

• Find a quiet place where you can think clearly without distractions.Gather any necessary materials, such as a notebook or digital document for notes.

Step 2: Identify Your Strengths

• List your skills, experiences, and resources that give you an advantage. Consider what you do well in your business and what unique qualities you possess.

Step 3: Acknowledge Your Weaknesses

• Be honest with yourself about areas where you lack skills or resources. Think about feedback from clients or peers that could highlight gaps in your approach.

Step 4: Explore Opportunities

• Research market trends and gaps that you could exploit. List potential partnerships, new markets, or emerging customer needs that align with your business.

Step 5: Recognize Threats

• Identify external factors that could negatively impact your business. Consider competition, economic conditions, and industry regulations that present challenges.

Step 6: Evaluate Trends in Technology and Culture

• Analyze how technological changes or cultural shifts may affect your business landscape. Include any advancements that could either pose a threat or offer an opportunity.

Step 7: Compile Your Findings

• Organize your insights into a structured format, typically a four-quadrant table. Clearly separate strengths, weaknesses, opportunities, and threats.

Step 8:Reflect and Prioritize

• Review your SWOTT analysis to prioritize your findings. Determine which strengths to leverage, weaknesses to address, opportunities to pursue, and threats to monitor closely.

Step 9: Develop an Action Plan

• Create specific, measurable goals based on your analysis. Outline steps you will take to capitalize on strengths and opportunities while mitigating weaknesses and threats.

Step 10: Set a Review Schedule

• Plan regular intervals (e.g., quarterly) to revisit your SWOTT analysis. Adjust your action plan based on new insights, feedback, and changes in the market. Keep a record of your SWOTT analysis and any changes to your action plan for future reference. This will serve as a guide to track your progress and make informed decisions moving forward.

While entrepreneurs and small business owners can conduct a SWOT analysis on their own or with their team, engaging a certified consultant with a background in self-employment and business ownership offers distinct advantages. Such as:

• An objective perspective, crucial for identifying blind spots that an owner might overlook.

• Experience which allows for tailored insights and strategies that are specific to the unique challenges of business ownership, ensuring the analysis is relevant and actionable.

• Benchmarks and data that enhance the analysis's credibility and effectiveness.

• Facilitation of a more thorough brainstorming process during the assessment, leveraging their network for insights and resources that an individual may not have access to.

Ultimately, the expertise of a professional small business consultant can lead to a more comprehensive and impactful SWOT analysis, driving strategic improvements and growth.

With my guidance, you'll receive a tailored SWOT analysis to inform your strategic planning, set realistic goals, and create a focused action plan aligned with your vision. Take the first step toward clearer direction and growth. Contact me to get started today.