5/4/2021Small Business Advice
Grow Your Small Business: Be a Smarter Competitor with SWOT Analysis
Analyzing your strengths, weaknesses, opportunities, and threats can set your business up for success.
To have a successful business, you need to be a smart competitor. How do you create a winning strategy that takes into account your competition? With SWOT analysis. SWOT is a simple tool that can be used whether you’re in the early days of your startup or if your business is already up and running.
SWOT stands for Strengths, Weaknesses, Opportunities, and Threats.
Strengths and weaknesses are the internal factors of your business. You have the most control in these two areas. If something isn’t working internally, look at your business’s strengths and weaknesses to correct them. Some examples include your team members, patents, location, marketing, and products.
Opportunities and threats are external factors. They’re parts of the larger market that you have less ability to change. The goal is to use opportunities presented in the market to improve your business and protect it against threats. Examples include competitors, pricing of raw material, and customer shopping trends.
Most SWOT analysis models used by businesses are visualized as a two-by-two grid and organized in list form. Each box lists the top strengths, weaknesses, opportunities, and threats.
Preparing a SWOT analysis may seem like something you don’t have time for while running your business. However, taking a step back to analyze these factors can quickly lead to new and thoughtful business strategies. The preparation of a SWOT analysis helps you look at processes from a different angle.
If possible, utilize the assistance of others to help you with a SWOT analysis in addition to your team members. As a founder or owner, you may have a biased approach. People who are not closely affiliated with your business could offer the perspective you need.
These questions can help guide the SWOT analysis:
Strengths are internal, positive attributes of your business.
Weaknesses are the internal and negative factors that detract from your strengths.
Opportunities are the external factors that contribute to business success.
Threats are external factors that you have no control over.
Once the analysis is complete and the ideas have been placed in the respective quadrants of the grid, it’s time to put the plan into action as a strategy.
Begin by looking at the strengths and figure out how you can use them to maximize on opportunities. Also look at the strengths and see how you can use them to combat your threats. Finally, use the external opportunities to develop ways to combat your internal weaknesses. Use these to create a list of goals or strategies you can take on as a business in the next quarter.
When you use a SWOT analysis to create operational strategies, you become a smarter competitor. One of the best ways to gain an advantage over your competition is to develop strategies deeply based upon it. Staying on top of your competitors and frequently reflecting on your business helps assure stability.
Hatch Business Checking creates more opportunities for your small business. We eliminate NSF fees, offer cashback rewards on eligible debit card purchases, and offer small business perks to help you grow. To find out more, click here.