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@dropshipwholesale.net For information on starting your own online or eBay business, visit http://www.dropshipwholesale.net

Many successful businesses have been built by taking a traditional business and making it better. Domino's Pizza was certainly not first to offer home delivery of pizza, but they were first to guarantee it would be delivered piping hot to your door in 30 minutes or less. Amazon.com was not first company to sell books, but they were one of first that would let you buy books from comfort of your own home while sitting in your underwear.

** Focus on a niche. Many businesses have gone broke trying to be all things to all people. The ability to offer a gazillion products under one roof is all well and good for Wal-Mart, but not for most new small businesses. Try to identify a niche that you would enjoy working in and think about starting a business therein. If you love to work outdoors, consider starting a landscaping business. If you enjoy working with numbers, think about becoming an accountant or CPA. When's last time you had your gardener do your taxes? You get idea. Focus on a niche and become an expert in your field.

** A franchise might be an option. Many new entrepreneurs consider buying a franchise operation instead of starting a business from scratch. Franchises are a good way to jumpstart process because they have already done much of hard work for you. They have proven business model, established guidelines for running business, spent millions of dollars on establishing brand, etc. Buying a franchise is typically a very expensive and involved process that is beyond scope of this article. The best thumbnail of advice I can give you is to thoroughly investigate franchisor and opportunity, use your own attorney to do deal, and read fine print in franchise agreement.

** It's hard to swim in a crowded pool. If business pool is already filled with other companies doing same thing you want do, chances are you will fail in face of established competition. To succeed in such a crowded pool you will have to do something to stand out from crowd (and I don't mean greeting customers while wearing a bright red Speedo). If you can't quickly and easily differentiate yourself from a large group of competitors, you're better off choosing another business.

** Above all, take your time. Whatever business you choose to start, I encourage you to take time required to make an informed, intelligent decision. Think about starting part time while you still have your current job (and income) to fall back on. Talk to friends and associates who use product or service you will provide to see if they would consider become paying customers.

Remember, in business you can end up swimming in success or sinking in failure. The key to your success might just lie in sensitivity of your big toe.

Here's to your success.

Tim Knox tim@dropshipwholesale.net For information on starting your own online or eBay business, visit http://www.dropshipwholesale.net