Small business owners make a lot of mistakes. It’s part of running your own company. Over the course of making all these decisions you’re going to run into some things that you’d handle differently with five, ten, or even two more years of experience under your belt. One of the things that people most consistently sell themselves short on in business is the strategy end. Some people who own small businesses think that they don’t “have” to do a SWOT analysis because their business is so small. They think of it as an unfortunate chore that larger companies are stuck with. SWOT analysis is not a bullet that you can dodge by having a small business. SWOT analysis is one of the major business tools that will turn your business from small to large. If you have a business that you want to see grow in the next year, it’s time for a Strengths, Weaknesses, Opportunities, and Threats analysis.
Gather Together People with Different Insights and ViewpointsIdeally, a company is always able to hire an outside firm to do an impartial analysis for you, or in conjunction with you. However, for a small company this simply isn’t practical. Nor does it really need to be. If you can, round up several different people from within your company. As an owner, you’ll be part of this. Get together a manager (if you have one), an entry level employee, and then also a representative of any special services you offer. If you have several different departments in your business, than a manager from each would be good. The reason that you want to get together so many different people is that everyone is going to have a different perspective. Get them all together, go over what SWOT stands for, and give them a list of four columns to fill out. For best results, give it a week or so and then gather everyone together again to see what you’ve got.
StrengthsStrengths are pretty straight forward. This is what your company is good at. Everyone who fills this out is going to come up with something different (this is true of all of these categories), but every answer is valid. Your entry level cashier might write down that a strength of the business is that every customer can have one on one interaction with a sales person if that’s what they want. Your processes manager might write down that your business is very good at promptly shipping out packages that need to be shipped out. There’s no one right or wrong answer here. This is the foundation that you’re going to be building off of when you implement this SWOT analysis results.
WeaknessesDon’t be afraid to get personal here. You have to be truthful in order for this to work. If your business is a great idea in a terrible location, say so. If you have specific managers who aren’t pulling their weight, list them down. The only things that you shouldn’t focus on here are things that are entirely beyond your control in the form of the competition. You can list your ineffective ad campaign here, but you shouldn’t put “competitor X is better than us at X.”
Opportunities are the external positive forces that affect your business. Is your area going through an economic boom? Did the rent on your space get lowered when you renewed your lease? Is the market just plain more favorable to your company now than it was six months ago? These are the winds of change that you want your company to ride to the top. You have to pay specific attention to them. These can also be the trends that you want your company to follow in the coming months. If you want to switch your focus from a general sporting goods store to a workout gear shop, for example, you would put in a growing need for workout gear that your store could carry.
Threats are external negative forces. This is where you list your competitors, and also things that could interfere with your business. Is the land you work on scheduled to have an environmental survey? Is the company you lease your building from threatening to raise your rent? Get as many viewpoints together as you can so that you can put together a plan that will protect from these negative issues.