Essential Ingredients of a Small Business SWOT Analysis
Are you familiar with SWOT analysis? The acronym stands for Strengths, Weaknesses, Opportunities, and Threats. Don’t let it fool you: While SWOT analyses can be incredibly extensive and seem like “overkill” for some businesses, they will be very insightful, both from personal and professional standpoints.
As a business coach, I strongly recommend all my clients conduct or update a small business SWOT analysis at least once a year.
Why bother with a Small Business SWOT analysis?
Taking the time to focus on strengths, weaknesses, opportunities, and threats individually will give you a greater sense of clarity and a better way to develop paths, ideas, and goals. Essentially, this is a strategic planning exercise that allows you to focus on your marketplace and how you fit into it. Also – and more importantly – it will help you learn how to look for new ideas, paths, and gaps in the market.
You’ll see the cracks and gaps in your business and understand how best to fix them.
You’ll be able to continue to refine your strengths and better assess your weaknesses.
We all need to take time to be more strategic rather than immersed in the details. Clarity will come from writing out your thoughts, ideas, and assumptions.
Start your small business SWOT analysis assessment with a comprehensive list of questions.
To cover all the angles of business more deeply, I use a modified version of SWOT. I call it “SCORE”: Strengths, Constraints, Opportunities, Risks, and Expectations.
When sitting down to run a SCORE or SWOT analysis, set out to make a note of more than you think you need (or want) to write. The more extensive you are in your survey, the better your long-term results will be. Here are the things you should consider:
- Strengths: In what areas do you perform best? Where are the strongest points of your team? Do you have a solid handle and understanding of your marketplace and your niche?
- Constraints: I like to use the word “limitations” instead of weaknesses; nobody likes to think about the negative and negative emotions have three times the impact as positive emotions. Instead of harping on what you’re “not good at” or areas where you struggle, think about what holds you back and how you can overcome those things.
- Opportunities: Where do you stand to make the most positive impact? What actions will be the most profitable for you? What your instinctive ideas that will make a difference?
- Risks: Instead of threats, consider what risks you need to take to reach your goals.
- Expectations: Think of your expectations as your overall outcomes. What do you need to do to drive opportunities into strengths and to keep constraints from becoming risks? I like to include expectations because I want to turn “strategy research” into actionable and tactical tasks to work on. My coaching practice’s mission is to simplify ideas and then execute aggressively.
How do you use the results?
It’s important to remember what areas of your business are affected by each section of the analysis.
Strengths and Constraints are internal while Opportunities and Risks are external. Don’t become unhinged by things that are somewhat (or completely, in some cases) out of your control. Remember what you can and can’t-do and move on from the rest.
Peter Drucker wrote, “The task of leadership is to create an alignment of strengths, making our weaknesses irrelevant.” I couldn’t agree more.
By using a small business SWOT analysis or SCORE analysis, for your business, you’re paving the way for success both individually and for your team.
Take the time to create a small business SWOT analysis for your company. I’ve created a worksheet for you to use as a guide (download here).
When it is time to rethink your strategy, fill out my contact form for a complimentary coaching session.