Every business should have a written business plan. That plan is your roadmap to the future success of your company. Whether you’re a new business creating that blueprint for the first time, or an existing business conducting a strategic review, you want to create a clear, strategic plan to achieve your objectives. That plan includes building on strengths, minimizing weaknesses, maximizing opportunities and overcoming threats, which are all a part of a SWOT analysis.
But how do you determine what opportunities your business should pursue or what threats there are to your business’ success? In what areas does your business, and the people in it, excel? Are there weaknesses that need to be addressed?
What is a SWOT Analysis?
All these questions can be addressed with a SWOT analysis. This analysis is a strategic planning tool to help a company identify your company’s Strengths, Weaknesses, Opportunities, and Threats, or SWOT. Strengths and weaknesses are considered internal factors for which a business has some sort of control. Opportunities and threats are external factors for which a business has very little or no control.
A business owner should note that a SWOT analysis is very subjective. By having a cross-section of people from different levels within an organization participate in the SWOT analysis, it will provide more objective results. This analysis should not be used to justify goals that are already established. Rather, it should be done as objectively as possible in order to see what goals should be pursued.
4 Factors That Make Up a SWOT Analysis
- Strengths – The internal strengths of a company can be tangible or intangible. A company’s strengths may come from its products or services, as well as the knowledge and expertise of its employees. Internal processes or financial resources could also be a consideration.
When looking at your company’s strengths, ask these types of questions: In what areas does your company do well? What expert knowledge or experience do your employees possess? What does your company do better than your competitors?
- Weaknesses – The internal weaknesses within a company, which may keep your company from accomplishing an objective. Weaknesses may include a lack of products and services, high employee turnover, ineffective processes or procedures, poor decision-making and high debt.
When looking at your company’s weaknesses, consider asking these questions: Where does the company need to improve? What resources are missing? Are there areas of the business that are not profitable?
- Opportunities – The external opportunities that are not under the organization’s control. While these opportunities cannot be controlled, a company can take advantage of them to gain a competitive edge. It’s important to watch for and recognize when an opportunity presents itself. A business must always look outward since it’s that external environment where opportunities will present themselves. These opportunities may come from positive changes in the industry, competition, technology, and government.
When looking at opportunities, consider asking these questions: What other problems can you solve for your current customers? Is there a new target audience you could reach? Are there other related products or services that are a good fit for your organization and your customers?
- Threats – The uncontrollable threats outside of a business that could put the success of the objective at risk. Companies should always watch for, and be wary of, external threats. They may include changes in technology that are not being incorporated into the company’s processes, more competition, or an industry reduction in price.
When looking at threats, consider asking these questions: What are your competitors doing that your organization is not doing? What changes are happening in your industry? What is happening with the economy that could hurt your business?
At Spring Green, our franchise owners attend annual business and marketing planning sessions with their own business consultant. They work together on financials, marketing and operations and go over a SWOT analysis. Each Spring Green franchise owner has a dedicated business consultant, as well as the support of a team of professionals who are knowledgeable regarding target audiences, industry trends, competitor analysis, pricing, and so much more.
Whether you want to switch your independent business to a franchise system, or you are looking for a new turn-key franchise opportunity with the resources and support to help you be successful, Spring Green may be the perfect fit for you.