How to conduct a SWOT analysis for a small business

Conducting a SWOT analysis periodically allows you to consider all of your business’s strengths, weaknesses, opportunities, and threats as you fine-tune your business strategy.

Swot 101

A Strengths, Weaknesses, Opportunities, and Threats (SWOT) analysis typically consists of a grid to help identify these important components:

• Strength – a positive, internal aspect of your business that’s within your control. A strength could be something that your business is great at, your team’s knowledge and experience, your access to credit or your intellectual property or location.
• Weakness – a negative, internal aspect of your business that’s within your control. A weakness might be uninterested staff, a lack of experience, a heavy debt, tax burden or obsolete technology.
• Opportunity – similar to strengths except they’re external, positive factors that could be leveraged to your business’s advantage. For example, an extended drought could be considered an opportunity if your business produces water-saving devices.
• Threat – similar to weaknesses except they’re external, negative factors that could harm your business. For example, the same extended drought could be considered a threat if your business sells thirsty tropical plants or turf.

The SWOT analysis template (PDF, 1MB), opens in new window provides you with an easy way to break down an issue based on your business’s specific strengths, weaknesses, opportunities, and threats.

Use the template to analyse a single issue. We recommend identifying the issue and presenting it as a short, easy-to-understand sentence such as:

• export widgets to Thailand
• print product labels in-house
• license our products to third parties.

Once the issue being assessed has been defined, the SWOT analysis template can be used to consider various criteria. Criteria for consideration could be resources, quality control and business capability, competitors, market demand, political effects, partnerships, and even legislative effects. This is along with any relevant strengths, weaknesses, opportunities, and threats, of course.

We’ve already identified some of the most important criteria where businesses are either strong or weak. We’ve also identified criteria that may pose either an opportunity or a threat. These considerations should prompt you to think about your business’s strengths, weaknesses, opportunities, and threats as they relate to the issue being analysed. These prompts may surprise you, revealing insights you might not have considered otherwise.

After conducting your SWOT analysis, you’ll have a set of objective insights that you can use to make smarter strategic decisions.