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Now just fill in each quadrant accordingly. Strengths and weaknesses are internal factors that affect your business. Opportunities and threats are external factors. Let's look at a quick overview of each.
Strengths are those things that make your business stronger. Strengths might include: a product or service that sells well; an established customer base; a good reputation in marketplace; a good track history; a high traffic location; strong management; qualified employees; ownership of patents and trademarks; and any other aspect that adds value to your business and makes it stand out from competition. Strengths should always be gauged by strengths of your competitors. If your business does something well just to keep up with competition, it is not a strength. It is a necessity.
Weakness are antitheses of strengths. Weaknesses are those areas in which your company does not perform well or could stand improvement. These are areas of your business that make you susceptible to negative market forces and aggressive competitors. Weaknesses might include: poor management; employee problems; lack of marketing and sales expertise; lack of capital; bad location; poor products or services; damaged reputation; etc.
Opportunities are those things that have potential to make your business stronger, more enduring, and more profitable. Opportunities might include: new markets becoming available or old markets that are expanding; possible mergers, acquisitions, or strategic alliances; a competitor going out of business or leaving marketplace, making their customers open to you; and potential availability of a desired employee.
Threats are those things that have potential to adversely affect your business. Threats might include: changing marketplace conditions; rising company debt; cash flow problems; a strong competitor entering your market; competitors with lower prices; possible laws or taxes that may negatively impact your profits; and strategic partners going out of business.
Once you have filled in all four quadrants, you can use this information to create strategies that will help you make best of information learned. For example, once you have identified your strengths you can better use them to determine which opportunities to pursue and to help reduce your vulnerability to potential threats.
Now that you know your weaknesses you can formulate strategies to overcome them so you can pursue opportunities. Knowing your weaknesses can also help you establish a defensive plan to prevent your weaknesses from making your business particularly susceptible to external threats.
Whether you use a consultant or create a SWOT Analysis on your own it is important to remember that a SWOT Analysis is a subjective analysis tool that can be strongly influenced by opinions of those performing analysis. For small businesses especially it is imperative to keep analysis simple and to point. Don't overanalyze and don't immediately take results as gospel.
Remember, it's an analysis tool, not a magic 8 ball.
Here's to your success!
Tim Knox Tim@smallbusinessqa.com
Tim is the founder of DropshipWholesale.net, an online organization dedicated to the success of online and eBay entrepreneurs. Related Links: http://www.30dayblueprint.com http://www.timknox.com