Why Do a SWOT Analysis As a Small Business?
Ok, so before we answer that question you might be asking…
“What is a SWOT Analysis?”
Imagine you're planning a Super Bowl party. You'd want to know what you’ve really got working for you — like that roomy living room with a big flat screen and what might kill the vibe — like your friend who hates the home team. It also might be a good idea to consider what opportunities you could take advantage of to make the party great— like the pizza shop that is walking distance from your house. Let’s not forget what might get in the way of everyone having a good time – like a neighbor calling in a noise complaint, you party animal.
Essentially — that’s what a SWOT analysis is. SWOT is an acronym for Strengths, Weaknesses, Opportunities and Threats. It’s a simple tool that can help provide a pretty quick snapshot of where your business stands today.
Cool, so why should I do a SWOT Analysis if I own or manage a small business?
Well, obviously your business is the best Super Bowl party in town, right!? Analogies aside, a SWOT analysis is a great starting point because spending even 15 or 20 minutes brainstorming answers to each category can quickly bring big picture clarity to where your business stands. We feel that is tremendously valuable because before you can deliver a great product or service and grow your business, you really want to be aware of what’s working, what’s holding things back, what opportunities are presenting themselves and what outside factors might cause your business a challenge in the future.
Boiled down, here’s why we’d say a SWOT Analysis can be super helpful:
Expand Awareness
Growth isn’t just about expanding your business, it's about doing so mindfully. Being honest about where your business is at and the environment it operates in allows you to be more thoughtful and strategic about what you’re doing, when and why.
Discover Hidden Opportunities
The "Opportunities" section forces you to get a little creative and vision beyond the day-to-day grind of just making things go. Sometimes obvious opportunities to generate new revenue or tidy up a system are sitting right in front of us if we step back and really open our eyes.
Identify & Address Threats Early
Every business faces challenges whether it’s competition, shifting trends or operational risks. By identifying threats early on you can prepare for and adapt to inevitable shifts and changes, turning potential risks into manageable issues when they arise.
Sets the Tone for Strategic Planning
The SWOT analysis isn’t just an exercise—it can serve as a helpful roadmap. Once you understand the landscape of the business path you’re on, you can use these insights to guide decisions throughout your business’ growth journey.
These are some of the reasons we love to run folks through a SWOT Analysis in the very early stages of our Growth Model. We call step one of that process "Roots to Revenue" and it is all about laying strong foundations to build your business on. By starting here, you help ensure the rest of your efforts are grounded in a base reality that reflects your business’ strengths and opportunities, while being mindful of the likely challenges you’ll face ahead.
