SWOT Analysis a key business assessment tool

Key Business Assessment Tool   

As businesses try to move forward in this sluggish economy it may be time to pull a time honored resource out of the business toolbox– the SWOT Analysis  (Strengths, Weaknesses, Opportunities, and Threats).  Chances are that you’ve heard of  the SWOT Analysis, which is a basic tool that helps a business determine its status today and its steps for tomorrow.  It has been around for decades, but it still proves to be a useful tool for those who know how to use it.  If you’ve already done one on your business, or even yourself, it’s time to reexamine your efforts. If you’ve never completed a SWOT Analysis, you better get started.  The first step is to take a realistic look at your business to determine its strengths, weaknesses, opportunities and threats.

Strengths and weaknesses- These two areas are from within the company. Answer this question for each strength: How can my business capitalize on the strengths and become even stronger? For each weaknesses, analyze to determine which can be negated or with some effort turned into a new strength of the company.

Opportunities and Threats- These two come from outside the organization. Ask if your business is taking advantage of the opportunities that have been identified or if the opportunities are slipping through the cracks and remaining lost revenue potential. Ask if  the threats identified are insurmountable or if they can they be mitigated.  Can these areas become new avenues of opportunity if viewed from a different perspective?

Next steps: After identifying the items, review assess and prioritize each. The goal is to take each of the items remaining and use them to improve your business.  Once all of this has been collected, categorized and analyzed, it is time to develop an action plan or strategic plan. Take the data you have developed to move forward with your business.

If you’d like more information or assistance in conducting assessments of your business contact your local SBDC. 

Example SWOT of XYZ Company

Strengths (ie:   Your assets? Experience?  money   makers?)   As a small business we are able to respond   quickly to the market place   We don’t have the high overhead our   competitors do	Weakness (ie: Lack of   resources?  losing money?  employee or customer dissatisfaction?)   Higher turnover then we’d like   Need stronger accounting systems   Company is not well known
Opportunities(ie: Conditions that benefit you? new needs of   customers could you meet?  niches?)    The market is nowhere near saturation   “Going local movement”  local government and community support   shopping local- from   Seems to be new opportunities overseas and   within the Federal government   competitors may be slow to adopt new   technologies	Threats (ie: Negative   economic, political, social, competitor trends?)   Larger clients take three-to-six months to pay   for services   Rapid technology changes