To make the best decisions for your business, you need a comprehensive view. This is where a SWOT (strength-weakness-opportunity-threat) analysis can be an asset, highlighting solutions, shifting perspectives and forecasting risks.
When you identify internal and external factors that affect your business, you’ll be equipped with clarity to set a direction for your company and dive into strategic planning.
Start with a brainstorm
Kick off your analysis with a simple brainstorming activity to identify the positives and negatives about your business. By broadly identifying the pros and cons of your business upfront, you’ll be able to get more detailed with your breakdown later.
Create two separate spaces for the positive and the negative aspects of your business. Then write down everything that comes to mind. That’s it!
Here’s a breakdown of the insights that can be found under each category.
Once you’ve identified the positives and negatives, focus on what is within your business’ control. This becomes your internal analysis or the “SW” part of SWOT. By highlighting these points, you’ll be able to gain perspective and objectively manage—and potentially mitigate—future issues.
Try breaking these points down like this:
What are your strengths?
What do you do better than others?
What’s unique about you and your business?
What are your weaknesses?
What do your competitors do better than you?
How can you improve or counteract this?
Internal factors can include:
- human resources: staff, vendors, mentors and anyone impactful to the business
- physical location: surrounding area, neighbourhood and proximity to competition
- financials: grants, debts, investments, bankability and any sources of income
- processes: systems implemented now or after your business launches
- past experience and education
Next, look at any factors you listed outside of your control. These external factors comprise the “OT” part of SWOT. From forecasting to seasonality and economic analysis, be realistic about the market you’re entering and the methods to address the external factors impacting your success.
What market trends or conditions might help your business?
What opportunities are available to you?
What prospects are available to you?
What market trends or conditions might harm your business?
What are your competitors doing that could impact you?
What other threats could challenge your business?
External factors that could affect your business include:
- future trends in your niche or industry
- social and cultural factors
- new technologies
- economic analysis (local, regional and broader)
- potential government legislation impacting your industry or supply chain
- local, national or international events
- community reputation
Put it all together
With your internal and external factors identified, it’s time to compile them to get a comprehensive look at your business. Using our Analysis Matrix Template, you can collect your ideas in one place.
Once you’ve gotten a grasp on your matrix, add it to your business plan to guide you along your entrepreneurial journey.