The tree above is being weakened from the outside by a polypore, sometimes called a bracket or a shelf fungus. As a small business owner you may find yourself like the tree, losing business to competitors but without a good handle on why that is happening. Or perhaps you find yourself thriving but looking to branch into a new product or service. How do you figure out what to pursue and when?
In past small business posts we have looked at the reasons to business plan as well as how to write an effective mission statement. We will continue our examination of major elements of the business plan with a look at the SWOT analysis. This analysis is the framework by which new and existing businesses identify what is working well and what needs improvement in order to be successful.
The SWOT Analysis
SWOT is an acronym for strengths, weaknesses, opportunities, and threats. A detailed look at your business through each of these lenses can help you make decisions about what you should capitalize on and what you should scrap. Brainstorm the answers to the questions below or others that come up to see what themes emerge for your business. Be as specific as you can when answering.
These are the internal factors that make you great at what you do.
- What are your best assets?
- What do your customers say that you do well?
- How good are your employees? (There is the potential for this to be a weakness as well.)
- What distinguishes you from your competition?
- If you’re looking at offering a new product or service, do you have expertise and experience in this area?
These are the internal factors that may be holding you back.
- Where do you have gaps (e.g. business knowledge, employee base, operationally, financial resources, products/services offered, etc.)?
- What criticisms do you hear from your customers?
- How is your competition beating you?
- If you’re looking at offering a new product or service, do you have enough financial resources available to you to start?
These are the external factors that you can take advantage of to move ahead.
- Is there new technology out there that could make you more efficient / better at what you do?
- Is there potential for meaningful partnerships?
- Has there been a change in government which may lead to more favorable laws, tax rules, etc?
- Is there room in the marketplace for your new product or service?
These are the external factors that could cause your business significant pain points.
- Is your industry experiencing a shortage of skilled workers?
- Are you operating in an unfavorable interest rate or global market environment?
- Are you operating in a politically unstable environment?
- Are you at risk during a natural disaster?
Review the lists generated by your brainstorm and determine which items are your top priorities in the short- and long-term. Will your strengths allow you to take advantage of the opportunities you identified or overcome the threats? Will your weaknesses sink your ship or can you minimize them?
If you’ve answered all of those questions, you’re ready to start building your strategies to meet your goals!
Next up: the marketing plan.