What Is a SWOT Analysis?
Q: What is a SWOT analysis, and how can it help me?
A: Marketing is probably the most fun aspect of small-business management. It involves direct communication with your customers and clients and allows you the opportunity to share what you bring to the marketplace in a creative way. Unlike most other elements of your business, marketing does not have rigid boundaries. You can be as formal as you like by mapping out marketing plans and strategies, or you can practice grassroots/guerrilla marketing as your budget allows. But before you begin any marketing campaign, you should perform a SWOT analysis of your business. This acronym stands for strengths, weaknesses, opportunities and threats.
At the foundation of your marketing plan are the products and services you offer, along with the personal talents and abilities that you possess. If your products or services have features that are unique to the market, you offer unparalleled customer service, you have lower prices, or you have specialized education or training that your competitors do not, then these things would be attributed to your business's strengths. Make sure that each of these elements is pointed out in your marketing pieces and you convey these strengths to both current and potential customers in your marketing pieces.
Weaknesses are those internal elements that keep you from offering the same level of products or services as your competitors. These can be found in product attributes such as size, price or quantity, or in service levels such as delivery time, customer satisfaction and warranties. You may find that you have only a few weaknesses compared to your competition, or you may find that you have many. Determining your business's weaknesses will help you to improve upon your products and services in the future. It's not wise to point out your weaknesses in your marketing pieces if you know that your competition can do something better.
Opportunities can be both internal and external circumstances that you have yet to take advantage of but are attainable in the foreseeable future. Opportunities can be bulk discounts available through your suppliers, coming across a great price on equipment at an auction, seeing an ad for classes that are available to further your professional education, or customers who have been dissatisfied dealing with your competitors. Opportunities are only beneficial when they are taken advantage of.
Threats, on the other hand, are those things that your competitors do better. They may offer lower prices, faster service, a wider selection of products or services, or have more financial backing. In any case, you must determine which of these elements pose the greatest threat to the survival of your business in the marketplace and determine how you will counterattack them. Can you lower your prices or increase your product line? Can you increase your capital or speed up delivery time? These are all things that you have to analyze and then change based on the opportunities that your business faces. You may not be able to compete with some threats. That's just part of business. In that case, you have to make sure that the things you can do better, your strengths, continue to ring clear in your marketing pieces.
Brian O'Rourke is the CEO and publisher of EnTrends, an online publication devoted to exploring how entrepreneurs work and live.