I have received several questions in the past few months from small business owners, and those looking to start, about what they should be doing now to set up continued success later. While there are a plethora of items that should be included on any such checklist, one of my most important pieces of advice is to take the time to perform a thoughtful SWOT analysis. SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. It is an analytical framework that provides you and your small business with a way to flush out the potential risks and rewards associated with your endeavor. It is a great way to take a birds-eye view of your business and the surrounding environment so that you can plan a proper course of action designed to afford you continued success.
Consider SWOT as a self-help book for your business. Just as people must routinely take stock of their weaknesses and strengths in order to better themselves, a business needs to take stock of not only what it is doing internally, but also what is occurring externally in the marketplace. A proper SWOT analysis provides management with the kind of alerts necessary to address both types of issues. It would be a great disservice to craft a strategic plan without including SWOT analysis. In this way, a business is better equipped to create a plan that addresses weaknesses and threats, but also identifies strengths and opportunities that can be focused upon and exploited for gain.
This awareness of major forces is an important piece of your arsenal that should affect all business decisions since SWOT is an important piece of crafting your overall strategic plan and decision-making analysis. Revisting your SWOT analysis at regular intervals is a great way to stay on top of trends and a positive move in terms of a benefit of continuous improvement methodology.
While SWOT isn't the only tool necessary to form a cohesive and successful strategic plan for your business, it is an important one and should not be disregarded.