What Is a SWOT Analysis and Why Do I Need One for My Business?

If you’ve just started your business, first of all, congratulations! It’s such an exciting time, but it can also be pretty scary. If the entrepreneur's life is new to you, you might be wondering, “What now?”

A SWOT analysis is a great way to answer that big question of “where do I go from here?” It stands for strengths, weaknesses, opportunities, and threats, all of which are things you need to make the most of your business. Let’s take a closer look at each component of a SWOT analysis and how you can use them to position your business for success:​​

Strength

You’ve probably been told to play to your strengths in all kinds of situations in life, and it’s true that the key to success lies in identifying your strengths and making the most of them. In business, this is also sometimes called your unique selling proposition (USP), meaning it’s the thing that makes you stand out from the competition. It’s the reason someone should decide to work with you instead of your competitor.
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Once you’ve identified your strengths, you can start focusing on them in your marketing materials. Every page of your website and every pitch you give should contain some element of your strengths. By focusing on what you do best, you’ll also gain the confidence you need to convince your prospect that they want to work with you.

Weaknesses

No one likes to talk about their weaknesses, but it’s important to identify them, just like it’s important to identify your strengths. Ignoring your weaknesses won’t make them go away, but you do have two options when it comes to addressing your weaknesses: 1) educate yourself so your weaknesses become your strengths: or 2) hire someone else to do it.
Some skills can be learned, and as entrepreneurs, sometimes we just have to learn to do it ourselves until we can afford to hire someone to do it for us. Other times trying to develop a new skill is just not the best use of our time and we’re better off finding a way to get someone else to do it.
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If you can’t afford to hire someone, see if you can get an intern to do it for free or minimum wage. Ask around at your local high schools and/or colleges to see if they might offer their students educational credits for the time they spend working with you.  You can also offer to trade services, so instead of paying them for their time and effort, you provide some of your expertise and service instead. I've done that with some of the people on my team and it’s been so awesome!​

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Opportunities

Sometimes we get so excited about the benefits we offer our clients that we miss other opportunities, even if they’re staring us in the face. When you do your SWOT analysis, it’s important to take some time to think about all the opportunities you have in your business. What do your clients need from you? Is there an easier way you could offer your products or services that would make buying from you more tempting? 
For example, bundling products/services is a great way to make it easy for clients to buy a bunch of things from you at once. So, if you have some products/services you tend to sell together anyway, why not bundle them together at a slightly lower price?
This aspect of your SWOT analysis can also help you identify some things you could offer your clients that you are not yet offering. For example, if they don’t have the budget to pay you for your services, could you offer a course to teach them how to do it themselves? Sometimes achieving success requires us to think outside the box a little and a SWOT analysis can help you do that.

Threats

Finally, you have to identify the threats to your business. This includes your competition, but also objections people might have to buying from you. Instead of ignoring the competition or taking the objections at face value, take some time in your SWOT analysis to take a close look at them. What is your competition doing that you’re not doing? Can you copy some of their strategies? Alternatively, if you notice they’re targeting a specific niche, maybe you could target a different niche that isn’t getting as much love from your industry.

Taking some time to address common objections to hiring you is also a great way to go into a meeting or phone call with a prospect prepared to overcome those objections so you can have a better chance of making a sale. 

If you haven’t already picked up a copy of my book, you might want to go ahead and do that because, among other things, the book goes over how to do a SWOT analysis. It’s a great resource for entrepreneurs who are just starting out with their business because it takes you through each step, from setting up the foundation, to getting the word out about your business.