How to Do a SWOT Analysis for Your Small Business

If you’ve ever worked in a corporate office environment, you may have come across the term “SWOT analysis.”
This has nothing to do with evaluating militarized law enforcement response units, and everything to do with
taking a long, hard look at your company.

Conducting a SWOT analysis is a powerful way to evaluate your company or project, whether you’re two people
or 500 people. In this article, you’ll learn what a SWOT analysis is, see some SWOT analysis examples, and learn
tips and strategies for conducting a comprehensive SWOT analysis of your own. You’ll also see how you can use
the data a SWOT exercise yields to improve your internal processes and workflows.

Before we get to the tips and techniques, let’s start with the basics: a definition of SWOT analysis.

What Is a SWOT Analysis?

A SWOT analysis is a technique used to determine and define your Strengths, Weaknesses, Opportunities, and
Threats – SWOT. 

SWOT analyses can be applied to an entire company or organization, or individual projects within a single
department. Most commonly, SWOT analyses are used at the organizational level to determine how closely a
business is aligned with its growth trajectories and success benchmarks, but they can also be used to ascertain
how well a particular project – such as an online advertising campaign – is performing according to initial
projections.
Breaking Down the SWOT Analysis Process
We know that SWOT stands for Strengths, Weaknesses, Opportunities, and Threats – but what does each of
these elements mean? Let’s take a look at each element individually.

Strengths
The first element of a SWOT analysis is Strengths.  This element addresses things that your company or project
does especially well. This could be something intangible, such as your company’s brand attributes, or something
more easily defined such as the unique selling proposition of a particular product line. It could also be your
people, your literal human resources: strong leadership, or a great engineering team.

Weaknesses
Once you’ve figured out your strengths, it’s time to turn that critical self-awareness on your weaknesses. What’s
holding your business or project back? This element can include organizational challenges like a shortage of
skilled people and financial or budgetary limitations.

 This element addresses things that your company or project does especially well. This could be something
intangible, such as your company’s brand attributes, or something more easily defined such as the unique selling
proposition of a particular product line. It could also be your people, your literal human resources: strong
leadership, or a great engineering team.

Once you’ve figured out your strengths, it’s time to turn that critical self-awareness on your weaknesses. What’s
holding your business or project back? This element can include organizational challenges like a shortage of
skilled people and financial or budgetary limitations.

Opportunities
Next up is Opportunities. Can’t keep up with the volume of leads being generated by your marketing team? That’s
an opportunity. Is your company developing an innovative new idea that will open up new markets or
demographics? That’s another opportunity.

In short, this element of a SWOT analysis covers everything you could do to improve sales, grow as a company,
or advance your organization’s mission.

Threats
The final element of a SWOT analysis is Threats – everything that poses a risk to either your company itself or its
likelihood of success or growth.

This could include things like emerging competitors, changes in regulatory law, financial risks, and virtually
everything else that could potentially jeopardize the future of your company or project.

Internal and External Factors

The four elements above are common to all SWOT analyses. However, many companies further
compartmentalize these elements into two distinct subgroups: Internal and External.

Typically, Strengths and Weaknesses are considered internal factors, in that they are the result of organizational
decisions under the control of your company or team. A high churn rate, for example, would be categorized as a
weakness, but improving a high churn rate is still within your control, making it an internal factor. Similarly,
emerging competitors would be categorized as a threat in a SWOT analysis, but since there’s very little you can
do about this, this makes it an external factor. This is why you may have seen SWOT analyses referred to as
Internal-External Analyses or IE matrices.
Subcategorizing your four primary elements into Internal and External factors isn’t necessarily critical to the
success of your SWOT analysis, but it can be helpful in determining your next move or evaluating the degree of
control you have over a given problem or opportunity.

Now that we know what each of the elements of a SWOT analysis means, let’s take a look at how to go about
creating and conducting a SWOT analysis.

How to Conduct a SWOT Analysis

Like feature-benefit matrices, there are several ways to conduct a SWOT analysis. However, regardless of how
you choose to structure your analysis, we need to start by asking a series of questions.

Let’s take our first element, Strengths, for example. To determine what your strengths are as an organization, you
could begin by asking some of the following questions:

 What do your customers love about your company or product(s)?

 What does your company do better than other companies in your industry?
 What are your most positive brand attributes?
 What’s your unique selling proposition?
 What resources do you have at your disposal that your competitors do not?

By answering these questions, you’ll be in great shape to start identifying and listing your organization’s strengths.

We can use the same principle to determine your company’s weaknesses:

 What do your customers dislike about your company or product(s)?

 What problems or complaints are often mentioned in your negative reviews?
 Why do your customers cancel or churn?
 What could your company do better?
 What are your most negative brand attributes?
 What are the biggest obstacles/challenges in your current sales funnel?
 What resources do your competitors have that you do not?

You may find that determining the strengths and weaknesses of your organization or project is considerably
easier or takes less time than figuring out the opportunities and threats facing your company. This is because, as
we said earlier, these are internal factors. External factors, on the other hand, may require more effort and rely
upon more data, as these are often beyond your immediate sphere of influence.
Identifying opportunities and threats may require you to conduct in-depth competitive intelligence research about
what your competitors are up to, or the examination of wider economic or business trends that could have an
impact on your company. That’s not to say that opportunities and threats cannot be internal, however; you may
discover opportunities and threats based solely on the strengths and weaknesses of your company. Some
possible questions you could ask to identify potential opportunities might include:

 How can we improve our sales/customer onboarding/customer support processes?

 What kind of messaging resonates with our customers?
 How can we further engage our most vocal brand advocates?
 Are we allocating departmental resources effectively?
 Is there budget, tools, or other resources that we’re not leveraging to full capacity?
 Which advertising channels exceeded our expectations – and why?

When it comes to threats, you could certainly begin by asking a series of questions like those above. However, it’s
often quite easy to come up with a list of potential threats facing your business or project without posing questions
beforehand. This could include “branded” threats such as emerging or established competitors, broader threats
such as changing regulatory environments and market volatility, or even internal threats such as high staff
turnover that could threaten or derail current growth.

How to Do Your Own SWOT Analysis

So, now we know what each element of a SWOT analysis is concerned with and the kinds of exploratory
questions we can ask to get the ball rolling, it’s time to actually get to work and create your SWOT analysis.

To illustrate how it works, we’ll create our own SWOT analysis example: a family-owned restaurant, with a single
location, operating in an urban area.

The Four Quadrants of SWOT Analyses

Whatever you choose to call them, SWOT analyses are often presented as a grid-like matrix with four distinct
quadrants – one representing each individual element. This presentation offers several benefits, such as
identifying which elements are internal versus external, and displaying a wide range of data in an easy-to-read,
predominantly visual format.

Here’s the SWOT analysis based on our fictional restaurant:

As you can see, this matrix format allows you to quickly and easily identify the various elements you’ve included in
your analysis.

For example, we can see that a great location, strong reputation, and seasonal menu are strengths in this
particular analysis. Conversely, we can see that heightened competition from chain restaurants and the rising
costs of ingredients are two of the four weaknesses identified by our fictional restaurant business.