Congratulations! Your small business has strengths! And weaknesses, opportunities, and threats. Put them all together and you have a SWOT Analysis. Here’s how and why to create one for your small business.
A SWOT analysis is a strategic exercise used to identify the current Strengths, Weaknesses, Opportunities, and Threats to a business. It provides a big-picture view of your business so you can identify key areas of focus for growth and development.
Note the word “current”: SWOT analyses should be repeated frequently (ex: yearly) to reflect in-the-moment realities of running your business. For example, consider the threats a cafe would have listed in December 2019 (pre-COVID) vs April 2020, when the pandemic dominated conversations, actions, and headlines.
Creating a SWOT Analysis for your small business takes little more than guidance, some space to think, and a little, light research.
Before you start, download our SWOT analysis guide.
Step 1: Write down strengths. What is unique about you? What competitive advantage do you have?
Step 2: Factor in weaknesses. What could threaten your business/operations?
Step 3: Identify business opportunities. What is happening that you might be able to use to your benefit?
Step 4: Add risks and threats. What are the greatest threats to your business now and in the near future?
Use the guide to determine where to focus your energy. For example, you could decide to set formal growth goals for your business or hire a contractor to help overcome a specific weakness.
It may be more effective to determine next steps by working with someone impartial who’s committed to helping. If you’re a member of Entrepreneurs Forever, you can discuss and brainstorm with your peer group and facilitator.
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