How a SWOT Analysis Will Benefit Your Business
Every retail business owner, in fact every business owner in general, has hopes, dreams and expectations for its future. The real key though is making sure that the goals you set are realistic.
For example, “Make $500 the first week” is not a goal that is realistic. One of the ways you can help yourself determine whether or not your goals are attainable, or that you are even setting the right ones, is by conducting what is called a SWOT analysis.
SWOT stands for Strengths, Weaknesses, Opportunities and Threats. In completing a good SWOT analysis you will need to look at all four categories and do so honestly, especially when it comes to the weaknesses part. Here are some basic pointers:
In his first part of the review you will examine all the strengths you and your business has that will help you succeed in both the long and short term. These may include:
- Your own skills and knowledge that will keep the business going.
- Contacts you have made that will be helpful to the business.
- Assets you have that will help the business (equipment, inventory etc.)
- Advantages you have over competitors.
This is often the most important and useful part of a SWOT analysis, as long as you can be honest with yourself. No business idea is perfect and you may be facing some disadvantages. By identifying what those are right now, while your business is still young you can begin to address just how you can plan to start overcoming these weaknesses to build a stronger business right from the start.
If yours is an established business doing so is very helpful in identifying what it is that may be stalling your growth. Weaknesses to look for might include:
- Areas where additional training might be needed in certain areas where your skills may be a bit rusty or lacking
- A lack of technical equipment, older software, a dated website
- Budget limitations
- Time limitations
This section should include all the opportunities you have identified that are the reasons for your business to exist in the first place. These opportunities are external to your business. They might include a market change that has made the demand for your products or services greater, or the opportunity to solve a problem.
What threats might exist that would undermine the stability of your business? Again these are external things that are out of your control. New regulations, new tax laws, new technology that might make what you offer obsolete. And the competition are always going to be a threat.
In this section list everything you can think of, even if it is a little far-fetched. Facing your fears and beginning to think about how you might handle threats to your business is all a part of the process.
You also need to take a careful look at your competitors and conduct a mini SWOT analysis on them as well. What do you do, or offer they do not and vice versa? What can you learn from them?
Technically you can conduct a SWOT analysis using a series of notebooks and Excel sheets. If you need a little more structure however, there are tools out there to help. This article offers a great look at some of the best of them.