A2X Consulting

Small businesses require a lot of work at every stage. That’s why finding a marketing approach that works for your business will help ease that process. Every small business owner understands that resources are too precious and time is too scarce to waste on an approach that doesn’t work or produces few results. Fortunately, there is a tool that is quick, easy, and inexpensive. It is known as a SWOT analysis and is underutilized by many companies.

What is a SWOT Analysis

The S in SWOT stands for Strengths, the W for weaknesses, the O for opportunities, and the T for Threats. These are all forces that affect your business and ultimately your bottom line so it is important to recognize them. It is probably the easiest to start with strengths and weaknesses as these are usually the most obvious. Then later, after further examination, you can list the opportunities and threats.

Strengths

Every business has them. Try to be specific and say more than just ‘We have a superior product.’ Why is the product superior? Perhaps you can also list as a strength that the company has a skilled workforce, or little debt, or maybe there is little competition in the market. It’s possible you have one or two sales people who go above and beyond. Try to list anything internally or externally that is a strength or asset to your company.

Weaknesses

Not every business owner wants to admit that their company has weaknesses but all of them do. Recognizing them is the first step toward fixing them in the future. Maybe the staff members in your company are not well trained or they don’t understand their job and must be closely supervised. Perhaps the location of your business does not provide for good visibility. Maybe the product you sell is too similar to other products on the market and therefore consumers have too many options. The trick to writing down your weaknesses is to be honest. Don’t leave anything out because that could only hurt the company later on.

Opportunities

Opportunities can be harder for a business owner to spot, so consider a variety of options. Maybe a competitor is going bankrupt or having troubles and you should consider a take over. Perhaps you are in a good position to take out a loan at the bank and expand. Maybe the market is ready for a new product that you have been developing and you could launch it sooner than expected.

Threats

If you have a difficult time finding threats, look at your weaknesses list or even the opportunities. Sometimes an opportunity could turn into a threat if not used properly. An example of a threat is the current economic climate. Maybe your product is becoming outdated. Perhaps there is too much competition in your particular market. It’s even possible that increasing interest rates make borrowing or repaying loans difficult.

SWOT Analysis Template

One of the simplest ways to do a SWOT analysis is to draw four boxes on a piece of paper or in an Excel spreadsheet and title them Strengths, Weaknesses, Opportunities, and Threats. Then, you could even ad another box next to those to brainstorm strategies and alternatives for fixing any problems you encounter. Some sample templates can be found here .

Once the SWOT analysis is finished, it is important to look at it closely as a company and ensure that the team understands it. It is a relatively simple tool that costs nothing to create, but can help generate ideas or a even a new direction for your company. Understanding your weaknesses and threats and making a plan for how to approach them will strengthen your company. Try not to forget your strengths either in your attempt to tackle the threats and weaknesses. It is important to appreciate and respect your strengths or one could suddenly become a weakness if you are not mindful. If you have completed your SWOT analysis carefully, it can be an excellent tool to help you plan for and forecast the future of your business.

By Sara Beck. Sara is an MBA student and loves to travel. She blogs at www.sarabeck.wordpress.com.