No matter what your company size is at this point in your entrepreneurial endeavor, developing a company SWOT (pronounced “swat”) analysis will help you, as a small business owner, determine your business’s internal strengths and weaknesses, as well as, opportunities and threats your business faces externally in the community environment in which your business is operating in currently. SWOT is an acronym that stands for Strengths, Weaknesses, Opportunities and Threats. Why is this important for you to analyze as a small business owner? First off, analyzing your company’s current situational position as it is currently is right now, as if it is a glimpse of what your business is going through internally, as well as, forces that are spawning externally or from outside the organization can help you as an entrepreneur by keeping things in perspective. A SWOT analysis is an evaluative tool of your business from the inside out.
When you give not only yourself, but your company an honest look at what your small business, and even you as the entrepreneur, leading the company is doing that is good, or essentially what your strengths are, this allows yourself to celebrate the small wins that your company and yourself as an entrepreneur are generating, but, when you give yourself and your company an honest estimation of what the weaknesses are within the organization, this will help you to figure out strategies to implement to combat these weaknesses or at the very least start to minimize them.
Some examples of what your company could be doing that is a strength are adding new customers or clients every month, making a profit each quarter, or having 5-star customer service ratings month-after-month on your social media websites. On the flipside, some internal company weaknesses could be quite the opposite, for example, losing customers, or losing profits, and/or having low star, or bad ratings on such social media and/or digital platforms, such as Facebook or Angie’s List. Again, once you can determine what you are as a business (and even quite frankly an entrepreneur) are doing well, or not, only then will you be able to start thinking more strategically about the future of your organization and what you need to do more of or to change immediately to become more successful out in the community or marketplace, in which you are operating in currently.
The external portion of the SWOT analysis tool contains the opportunities and threats to your business. This is so important because as a small business owner you want to grow your business and sustain it for the long-haul in the community, therefore looking for opportunities to develop new products or to develop a new customer base or a new promotional or marketing strategy/campaign can help your business maximize its potential. In addition, being acutely aware of your competition, in regards to, direct competitors and even indirect competition can help a small business owner strategize his/her next move to keep up with the marketplace needs of the product or service area you are in, and although it might be a scary reality to do a small business SWOT analysis on your company, and even yourself as an small business owner, it is crucial to not only know, but to really understand what your business is doing well at, what your business needs to improve upon, and opportunities your small business can grow and move into moving forward to succeed in the long-run. So do a SWOT analysis on your small business today, and even yourself as an entrepreneur! You’ll be a more informed business owner as a result!