SWOT is the acronym of Strengths, Weaknesses, Opportunities and Threats. This Analysis is a simple tool for identifying the areas of your business that will be the priority for your efforts and actions. The review of Strengths and Weaknesses focuses on the internal operations of the business.  The analysis of the Opportunities and Threats looks at the external market and outside factors that impact on your business.

The SWOT Analysis requires you to conduct a brainstorming session on each of the four topics and how it applies to your business.  Essentially you are answering the following four questions;

Ø  ‘The strengths of my business are…’

Ø  ‘The weaknesses of my business are…’

Ø  ‘The opportunities for my business are…’

Ø      ‘The threats to my business are…’

Strengths

The Strengths of a business are the assets and resources that provide it with a competitive advantage or benefit. The traits of a business strength are:

Ø  It is ranked in the top quartile for the industry

Ø  Provides a distinct competitive advantage

Ø  Is a reason why customers choose to use the business or its product/ services

Ø  Generates a positive income stream and/or adds real value to clients

Weaknesses

The Weaknesses of a business are the deficiencies that compromise its ability to achieve its goals. To be a weakness the deficiency must:

Ø  Be ranked in the bottom three quartiles for the industry

Ø  Not provide the business with a competitive advantage

Ø  Be sought by your ideal clients but you are not able to deliver

Ø  Is used by competitors as a point of differentiation against your business

Ø  Be a reason why customers do not do business with you

Ø  Generates a non acceptable rate of return or a potential loss

Opportunities

Opportunities for the business are those favourable outcomes that currently are not being developed or taken advantage of. The traits of an opportunity are:

Ø  Provides scope to build the sales/profits/income of the business

Ø  Provides access to new clients or to develop existing clients further

Ø  Is a technological breakthrough

Ø  Enables you to distribute products/services more efficiently to markets

Threats

The Threats to the business are those events or outcomes that threaten the existence of the business or may reduce its income or the value of its assets. The traits of a threat are:

Ø  A danger to the existence of the business

Ø  Is a risk to the profitability/ income of the business

Ø  Is a risk to the viability of a product, service or operation

Ø  Could reduce the capital/sales value of the business

This is a brief summary of some of the content in the FREE ‘Small Business Guide to Completing a FORMIDABLE SWOT Analysis’. This Guide is a comprehensive report that has all of the information you need to take the first step in dramatically improving your business’s results.