After a year like no other, now is the perfect time for a deep dive into the strengths, weaknesses, opportunities, and threats your small business will face in 2021.
Using the 4 Steps of a SWOT Analysis makes strategic planning easy, even if you’ve never done it before. I often conduct a SWOT with my clients and the results always yield actionable results.
The 4 Quadrants
As you can see, a SWOT comprises four quadrants.
Strengths and Weaknesses are the internal factors you have control over and can change, while Opportunities and Threats are external forces that can’t be changed, but must be adapted to.
When finished, the goal is to optimize the strengths, minimize or eliminate the weaknesses, while taking advantage of the opportunities yet understanding and preparing for the threats.
Here’s how to create the SWOT:
Strengths
What are the internal strengths of the organization?
Of course, strengths include revenues and money in the bank but think broader. What are you and your team good at? What do you/they love doing? What is your competitive advantage? What resources do you have; or can you tap into? What about intellectual property? Your customer list? Market niche? Unique products or services? Does the business have great online reviews? Great pricing? Happy employees? Ideal location? Serve an underserved market need?
Once all the strengths are identified, the goal is to build upon and maximize the strengths.
Example: Each time a customer tells you they’re satisfied with your product/service, send them a link to your Google account so they can tell the world how great they think you are.
Weaknesses
Now, look at the internal weaknesses.
For example, if you own a store, but it’s not in a great location? Or parking is terrible? Maybe your business was hit hard by the pandemic and has to pivot to survive? Are you having trouble attracting new customers? Is the business under-capitalized or financially stressed? Is there a solid marketing strategy? Is there good engagement on your social platforms? Are you having trouble keeping or hiring exceptional employees? Or is the business lacking the right team members to fill obvious skills gaps?
When the weaknesses are out in the open, it can feel overwhelming, so prioritize according to your budget and goals.
Example: A family-owned health food store I frequent responded to the pandemic and rearranged the layout so that their home-cooked ‘to go’ meals are now upfront, lessening the need for customers to walk deep into the store.
Opportunities
To uncover external opportunities, free-think without constraints.
It could be a new product or service that fills a gap in the marketplace. Some examples of easy, affordable opportunities are staying open later, or opening earlier. What about opening on Sunday which can be a very profitable competitive advantage to take advantage of for little to no cost. Some opportunities I’ve identified for my clients over the years are packaging services together, or could automatic service reminders be set up, or can you offer delivery? Is there a new market opportunity?
Once you’ve uncovered opportunities, create a marketing calendar to get it all organized and break it down into manageable chunks.
Example: A dry cleaner I know started opening on Sunday because the owner was there doing the books, anyway. Easy. Free. Great competitive advantage.
Threats
And finally, there are threats.
Threats are external and include the competition, changing demographics, new laws, weather, the economy, etc. that all have the potential to affect your business negatively. We can’t control external threats, but once we identify what they are, we can work around them. The biggest threat to small businesses has been the pandemic. While we can’t change that, think of inventive ways to mitigate its impact.
Example: In response to the pandemic, my favorite neighborhood cafe stepped up their social media to keep in constant touch with their followers and began having outdoor music events to keep people’s spirits up.
In conclusion
I highly recommend doing a SWOT analysis each year. It’s well worth your time and always yields insights and actionable results.
Ask all of your stakeholders for their input too and don’t stop with your customers, ask your own service providers and always get any employees involved too, especially those who are customer-facing, front-line, and interact with your customers.
Take your time to dig deep and you WILL reap the benefits. Once you’ve done it, you’ll be in a much better place to make profitable decisions for 2021 and beyond.
