7 actionable steps to conducting a SWOT analysis for small business

Conducting a Strengths, Weaknesses, Opportunities, and Threats (SWOT) analysis for your small business is essential to know where your strengths lie and anticipate potential issues in the future.

If you’ve ever considered the question: “What is a swot analysis in business?”, here’s a complete guide to conducting your own SWOT analysis and maximising its benefits.

4 parts of a SWOT analysis for small businesses

To give you a better idea of what this analysis framework could look like for you, here’s a breakdown of the internal and external elements of a SWOT analysis for a small business: 

1. Strengths (internal, within your control)

2. Weaknesses (internal, within your control)

3. Opportunities (external, outside of your control)

4. Threats (external, outside of your control)

Strengths (internal)

The Strengths in a small business SWOT analysis focuses on what your business excels at.

SWOT analysis strength examples might include the unique skill sets of you, your team, or particular pieces of equipment that give you a competitive advantage.

This shouldn’t just be the functional activities of your business or day-to-day operations that keep you profitable.

Instead, the Strengths element of your SWOT analysis should focus on the actions you can do better than your competitors, and that make you stand out in the market.

Some questions to ask yourself when considering your small business strengths include

• What does my business do well?

• What are the unique features or benefits of my products or services?

• What knowledge and experience do I have that my competitors don’t?

Weaknesses (internal)

The Weaknesses in a SWOT analysis of a small business look at the internal elements of your business that aren’t as effective or optimised as they could be or could be improved.

SWOT analysis weakness examples can include: 

• Using outdated technology or processes

• Having a shortage of resources that prevents you from keeping up with demand

• Not using the resources you do have as efficiently as possible

In this area of a SWOT analysis for small businesses, it can be useful to thoroughly research competitors and trends in your niche. This helps to establish the standards you should be measuring yourself against.

Questions to ask when considering the weaknesses of your small business include:

• What processes or habits are currently hindering our progress?

• What resources or skills are we lacking?

• What business activities are creating unnecessary costs?

Opportunities (external)

Opportunities are the positive aspects of the 2 external factors (the other being threats) in a SWOT analysis for small business.

This refers to anything favourable that comes out of entities or factors that you can’t directly control as a business owner.

SWOT analysis opportunities examples might include a new piece of legislation that cuts tariffs on imports your business depends on, or consumer trends that increase demand for your products or services.

Some useful questions to help you understand your business’s opportunities include:

• Should we expand the business to new locations?

• Are there any new technologies that would benefit the business?

• How can I react to emerging consumer trends to maximise sales

• Are there any recession-proof business opportunities that I’m missing?

Threats (external)

Threats refer to external factors that can negatively affect your business.

SWOT analysis threats examples might be:

• New regulations that make it harder for your business to operate.

• Consumer priorities shifting away from your product or service.

• Macroeconomic factors making it more expensive to maintain your supplier relationships.

The threats in a SWOT analysis of a business can help you to manage your priorities when addressing your weaknesses. By understanding them, you can plan to future-proof your small business to prevent the biggest threats from negatively impacting future growth potential.

Key questions to ask yourself when assessing threats to your small business include:

• What external conditions have the potential to damage my business’s efficiency or performance?

• Are there any new competitors that could undermine our business? Should I consider conducting a competitor analysis to help establish our unique selling point (USP)?

• What’s happening in my industry and the wider economy that could negatively impact my business?

What is the importance of SWOT analysis in business?

A SWOT analysis for small business is an important tool for any merchant who wants to optimise their business processes and keep their strategies in-line with the external factors of their industry and locale.

For example, if you’re running a standalone coffee shop and considering opening a second branch, a SWOT analysis can help you predict both the opportunities and challenges this could present.

This will help direct a competitor analysis that will inform the things you may have to do differently compared to your original branch.

When should your small business conduct a SWOT analysis?

The timing of a SWOT analysis of a business can vary based on different factors, such as the current stage of your business plan or the current state of your industry.

Though you’ll have to decide based on the specifics of your business, some of the common markers of when to conduct a SWOT analysis for small business include:

• The start-up or planning phase: Carrying out a SWOT analysis before you launch your business will help you understand your key factors for success. You’ll also gain a better understanding of the challenges you’re likely to contend with, and the strengths and opportunities you can leverage to maximise your chances of success.

• Major changes in your business: When there are major changes in your small business, a SWOT analysis can help you understand how the new landscape will affect you. You’ll also understand how to adjust your strategy to fit these conditions. Major changes might include opening a new branch, or a big hiring drive.

• Market shifts: A SWOT analysis can also be a useful way to inform your business strategy when there’s a major shift in the market. If consumer behaviour undergoes a significant change, for example, a SWOT analysis will help you understand these external factors and plan accordingly.

The benefits of a SWOT analysis in business

Carrying out a SWOT analysis for a small business has a range of benefits that can help merchants achieve their long-term business goals.

Here are some of the biggest benefits of a SWOT analysis.

Strategic planning

Whenever you’re making any major decisions for your business, a SWOT analysis can be an effective way to objectively decide how to approach this task, or whether you should do it at all.

Let’s say, for example, you’re considering social media marketing for your small business. Researching this within a SWOT analysis framework can help you to get a better understanding of your business strengths that might make your brand better-suited for certain platforms.

If you’re a handmade crafts business with plenty of visual content you can gradually feed into an Instagram or Pinterest account, this could be a strength that makes a social media strategy focused on this platform advisable. If you’re still building momentum with your photography or are investing a lot of time in other marketing channels, the lack of time could be a weakness that means you should postpone investing in social media marketing.

It can also provide a methodical framework for analysing the state of your competitors’ social media marketing. This will help you understand the kind of challenges you’ll be up against if you do decide to invest in this marketing discipline.

Problem-solving

A SWOT analysis can also be an invaluable tool for dynamic problem-solving.

Imagine, for example, that you’re running a small independent bakery that’s experiencing a downturn in sales. Methodically going through your SWOT analysis can present a number of opportunities for solving this issue effectively.

If one of your strengths is having a prime location, you can try to counteract the sales downturn by advertising a loyalty program in your window where it gets lots of visibility. If your selection of products is somewhat one-dimensional compared to your competitors’, you can react to this weakness by creating and promoting a new flagship baked good.

Decision making

If you’re a new business owner, or you’re hoping to start a business in the near future, then a SWOT analysis can be a great way to structure and carry out essential market research to help make informed decisions in the early phases of your business.

When carrying out your industry research, coming back to the SWOT analysis framework will help you filter and categorise information when making bigger decisions on the direction of your business. This will help you methodically decide what tasks you should prioritise when you launch your business, and what work can be left for later.

Risk management

A well-executed SWOT analysis can also be a big help in effectively managing risks for small businesses.

For instance, identifying the internal strengths of a small boutique clothing store, such as a highly personalised customer experience, could be used to mitigate the risks like economic downturns or a sudden increase in competition.

Identifying weaknesses, for example an inefficient inventory management system, could be an effective way to understand your business’s largest vulnerabilities and form a strategy to mitigate the risks they pose.

Keeps you connected with overarching goals

When you’re first considering a side hustle or starting a small business, some merchants may find it easy to keep their goals in mind as they strategise and make key decisions.

However, as merchants become more involved with the different aspects of their business like marketing, financial and operations management, and so forth, it can be easy to start seeing them in isolation. This can cause merchants to forget about how this work should be feeding into their long-term goals.

Like a business plan, an effective SWOT analysis can help you organise those overarching goals, and give you firm guidelines you can revisit to ensure you’re staying connected with the long-term direction of your business.

Who in your business should conduct a SWOT analysis?

When carrying out a SWOT analysis for a small business, it’s essential for people who make key strategic decisions for the business to be involved in the process and if possible involve team members who understand the business and product.

Though it’s important, for you as the business owner, to stay closely involved in your SWOT analysis, you should try not to do it in total isolation.

Carrying out this analysis while collaborating with people can give you different and valuable perspectives on each of the 4 aspects (strengths, weaknesses, opportunities, threats). This can help to inform you of aspects that you may not have considered before.

If you haven’t launched your business yet, or you’re operating as a solo entrepreneur, you can still make your SWOT analysis more effective by getting outside perspectives that will help draw your attention to potential blind spots.

Entrepreneurial mentors or peers in your network, vendors and suppliers, or even friends and family can all be a source of useful input while you try to carry out your SWOT analysis and make sure it’s as thorough as possible.

Even if you don’t know anyone personally who’s able to offer input, there are plenty of online entrepreneur communities you can use to offer insight such as:

• The British Chambers of Commerce - helping entrepreneurs trade and grow their businesses through support, advice and expert documentation.

• Hatch - focuses on supporting underrepresented entrepreneurs and small business owners including ethnic minorities and women.

• The Enterprise Nation - offers support to business owners that are early on in their journey. Providing special interest groups such as addressing leadership responsibilities and how to effectively manage change in your small business.

• FSB - shares a wide range of small business support services including financial expertise, and cash flow management advice. They also help businesses recover debts, secure funding and offer legal advice. 

What to avoid when conducting a SWOT analysis?

A SWOT analysis can be an immensely powerful tool for improving operations at your small business. However, like all business activities, there are certain principles and guidelines to keep in mind.

Here are some of the key mistakes to avoid when carrying out a SWOT analysis for your small business.

Overloading on information

When you first come to do a SWOT analysis for your small business, you’ll naturally want to make sure you’re being as thorough as possible.

However, it’s important not to let this turn into you collecting vast amounts of data without a clear understanding of how you’re going to use that data to make informed decisions about your business.

Instead of going through every single transaction or supplier invoice to build a detailed picture of your business, it’s better to focus on the most important key performance indicators (KPIs) of your business’s success.

If, for example, you’re running a small home bakery, the key areas of focus might be your best-selling products, the average review scores you get from customers, or economic changes in your local area.

Focusing on specific data sets that give you actionable insights, you can ensure your SWOT analysis stays practical and understandable, and avoid confusing the process with irrelevant data.

Doing it alone

If you’re a solo entrepreneur or just starting to develop your idea for a business, it can be easy to fall into the habit of doing everything yourself.

Outside perspectives can be immensely helpful for developing your SWOT analysis and making sure you’re not overlooking important strengths, weaknesses, opportunities or threats.

Be sure to talk through the SWOT analysis process with other people at your business and encourage them to share constructive criticism or throw new ideas into any of the 4 parts of the SWOT framework.

If you’re at the start of your entrepreneurial journey and working as a solo business owner, you may not have people readily available to collaborate with. However, it’s still important to actively look for outside perspectives and people who can draw your attention to things that you may not have considered.

By reaching out to customers, previous colleagues, or members of online entrepreneur communities, you can take advantage of a diverse range of new perspectives that will ensure you’re looking at your SWOT analysis from all possible angles.

Relying too heavily on old data

Merchants of all sizes can often fall into the trap of believing that past data will always be applicable to decisions about the future of their business.

Though past data that’s pertinent to your business can certainly be useful for carrying out a SWOT analysis, it’s important to avoid becoming too invested in it or believing that it holds all the secrets to an effective future strategy.

If, for example, you’re running a small bookstore, your data from the past year might show the majority of your sales being attributed to a handful of genres and authors. However, this shouldn’t be taken as a static data set.

For an effective SWOT analysis, you’ll need to consider evolving consumer preferences and trends, and industry predictions about where these variables might go in the near future.

Failing to recognise your own bias

A good SWOT analysis needs to be as objective as possible. However, it can be difficult to maintain this objectivity when you’ve been running your business as a solo entrepreneur for some time.

Biases related to your professional background can also find their way into the SWOT process and prevent you from creating an objective analysis that will effectively inform your strategy.

For example, if your background has been focused on email marketing for small businesses, you may be naturally inclined to focus more on branding and developing a marketing strategy as opposed to streamlining your finances.

When you’re planning to carry out a SWOT analysis, it’s essential to assess your own biases, consider how these might stop you from seeing important variables, and consciously try to off-set these.

This is another area where leveraging your personal network and looking for outside perspectives can be useful.

4 key elements of every SWOT analysis for small businesses

Every SWOT analysis for small business should contain the following 4 basic elements: strengths, weaknesses, opportunities, and threats.

In the table below, we’ll look at what each of these elements means to you, and some examples you can use to help guide your own small business SWOT analysis.

Establish strengths

Strengths cover any internal, positive attributes of your business that can give your business an advantage in its market.

These can include a product’s unique selling point, a distinct way of approaching normal business operations that makes them more efficient, how you’ve priced your product or how you've priced your service, or staff training that goes beyond the standard set by your competition.

Some questions to ask yourself when analysing this aspect of your business might include:

• What does my business do better than its close competitors?

• What in-built advantages does my business have in terms of location, branding, or standard of product or service?

• What resources or skill sets does my business have in large quantities?

• What technology does my business effectively use to improve workforce productivity or customer experience? 

If, for example, you’re running a small cafe, your strengths might include having a highly experienced pastry chef on your staff, a prime location that gets you a lot of foot traffic, or a supplier agreement that allows you to buy high-quality ingredients at a low price.

Address weaknesses

Weaknesses are the opposite of strengths, referring to the internal factors that are a hindrance to your business’s position in the market.

This might include areas where your resources or skill sets are lacking, or processes and technology that are outdated and need to be brought in-line with the standards of your market.

Some questions to ask yourself when addressing your weaknesses include:

• What tools and processes at my business could be improved?

• Where is my business lacking resources, skills or experience?

• What are some internal factors that are putting us at a disadvantage?

If you’re running a small personal trainer business, for example, some of your weaknesses might include a booking system that isn’t as user-friendly as your competitors’, no online presence through social media or an online store, or a limited bandwidth to keep up with demand in your local area.

Embrace opportunities

Opportunities are any external factors that can be turned to your advantage as a business owner. Common examples might include emerging trends that favour your business or positive shifts in customer behaviour.

Some useful questions to ask yourself when you’re looking to embrace new opportunities include:

• What are some major recent changes in my market and how can I leverage them?

• How can I position my business to address emerging customer needs?

• How can new processes or tools in the industry benefit my business?

If you’re running a restaurant, an example of an opportunity might be noticing a trend towards vegan diets in your local area, and meeting this demand by creating and promoting a new vegan menu. 

Confront and mitigate threats

Threats are any kind of external factor that has the potential to have a negative impact on your business.

These might include disruptive new competitors, macroeconomic factors that cause a downturn in your industry, or consumer demands shifting away from the kinds of products or services you’re offering.

Some questions to ask yourself when looking to protect your business from threats might include:

• Who are the competitors that pose the biggest threats to my business?

• What external economic factors could pose a threat to my business?

• What consumer trends are gaining momentum that could make it harder to sell my product or service?

If you’re running a local bar or restaurant and import the majority of your products, an example of a threat might be new government tariffs that make purchases from your supplier more expensive.

SWOT analysis small business examples

To help you get a better idea of how the SWOT analysis of a small business could work for you, here’s 2 examples of SWOT analysis for fictional businesses: Blue Snapper, an independent Thai restaurant, and BigEasel, an e-commerce artist supply store.

Blue Snapper - Thai Restaurant

Blue Snapper is based in London's Camden Town. This UK-based Thai restaurant boasts a team of ten dedicated staff members, including chefs, servers, and management. The premise itself is a cosy yet inviting space, with seating for up to fifty guests.

While it's not the only Thai restaurant in the area, its unique blend of traditional flavours with modern twists has brought in a healthy flow of local regulars and seasonal tourists alike.

SWOT analysis strengths examples

• A visible high-street location within walking distance of large housing estates, helping to attract bookings and impromptu walk-ins.

• Authentic recipes with high-quality ingredients created by our experienced head chef.

• A strong social media following which has helped our brand awareness to expand beyond our local area.

• Flexible payment experience with options like tap to pay and QR codes.

SWOT analysis weakness examples

• The high cost of essential ingredients has made our dishes more expensive than those of some of our close competitors.

• Positioned in a rural market town has made it hard to find quality staff who are prepared to commute in.

• Some large pieces of kitchen equipment are old and prone to malfunction or breaking. This occasionally causes delays or forces management to remove certain menu items while they deal with maintenance.

SWOT analysis opportunities examples

• A local upcoming food festival where we plan to have a stall could be a great opportunity to exhibit the quality of our food and attract a new audience.

• Our social media posts have attracted interaction with prominent foodie influencers, which could help our brand’s momentum online.

• A new local supplier has set-up who could soften some of the import tariffs that are currently eating into our profits.

• Launching new promotions like localised vouchers or gift cards.

SWOT analysis threats examples

• A new branch of a well-known Thai restaurant chain is due to open nearby. Their higher budget could undermine our share of the local market.

• The price of some of our essential ingredients is expected to rise due to an agricultural labour shortage overseas.

• Emerging news about an economic downturn in the UK could lead to people in our customer base tightening their budgets and eating out less.

BigEasel - e-commerce artist supply store

BigEasel is a small e-commerce artist supply business that’s recently grown out from being run at the founder’s home.

It now operates from a small industrial space in Manchester where it has easy access to shipping. While it faces competition from larger e-commerce companies, the diverse inventory and artist-led marketing have allowed it to develop a loyal customer base.

SWOT analysis strengths examples

• A large and diverse product range has made us the go-to artist supply shop for a base of loyal customers.

• Sponsorships with popular art content creators which helps us to consistently get our brand name in front of our target audience.

• A robust customer loyalty program that tailors rewards and discounts to individual customer accounts and spurs repeat purchases.

SWOT analysis weakness examples

• Our marketing has a heavy focus on social media, and is lacking in other major marketing disciplines like SEO and email marketing.

• Our website management is currently handled through drag-and-drop web builder tools and no one on the team has development experience. This leads to difficult situations when we deal with unfamiliar technical issues, a no-code online store could be a better solution.

• We rely on just one supplier. Without diversification, this could put us at risk of serious supply chain disruptions.

SWOT analysis opportunities examples

• Collaborations with local schools and youth groups to give back to our community and make our brand visible in-person instead of maintaining a purely online presence.

• Further social media engagement to expand our stable of influencers and attract more people to our online store.

• The opportunity to develop an app and give mobile users a more intuitive browsing experience.

SWOT analysis threats examples

• Competition from cheaper e-commerce giants means we constantly have to find ways to differentiate ourselves and give customers a compelling reason to choose us over cheaper competitors.

• A future economic downturn could reduce spending on non-essential hobby products like art supplies.

• Cybersecurity risks could threaten our customers’ personal and payment data as well as the reputation of our brand.

How can a SWOT analysis help a business: pros and cons

Though SWOT analysis for small businesses has a long history as a strategic framework, it’s not the only way to review the state of your business and plan for the future.

Here are some of the key pros and cons of a SWOT analysis to consider before you decide to carry one out.

Pros of SWOT analysis in business

It’s a simple 4-box framework

One of the biggest benefits of a SWOT analysis is its simplicity. The simple 4-box framework structure makes it easy to understand for any stakeholders in the business.

A completed SWOT analysis can act as a useful resource to come back to for quick decision-making and will save time that would be spent analysing the 4 different aspects in turn.

It encourages strategic thinking

When a SWOT analysis becomes a familiar process at your business, it can encourage more strategic thinking.

This will help you, your managers, and the wider team at your business to get into the habit of critically assessing your strategies, and staying aware of newly emerging strengths, weaknesses, opportunities and threats.

It helps anticipate future threats

Another key benefit of SWOT analysis is that it helps business leaders to anticipate future threats.

Carrying out a SWOT analysis means you’ll not only review the current threats that are poised against your business, but build a clearer understanding of emerging external factors that could disrupt your business.

It’s flexible

The SWOT analysis framework is also highly flexible. It can be adapted to organisations of all sizes and niches. This is why when you look up “SWOT analysis example small business” and “SWOT analysis example large corporation”, you’re likely to get 2 sets of wildly different results.

Because of the broad categories of the 4 SWOT quadrants, the framework is not only useful for creating high-level business strategies, but also for marketing, product launches, and other kinds of projects. 

Cons of SWOT analysis in business

It takes time, knowledge, and resources

Many small merchants find SWOT analyses to be useful strategy tools. However, there’s a significant drawback in that they can require a significant amount of time, knowledge, and resources to carry out.

Collating and understanding the data you’ll need to fill each aspect of the analysis means you’ll have to build a detailed understanding of your business and the market it operates.

Finding the capacity to carry out this analysis properly can be a challenge, especially if you’re a new entrepreneur and have limited time and resources. By breaking the SWOT analysis process into smaller, manageable steps, you’ll be able to make progress on it without feeling overwhelmed.

Static analysis

One of the biggest weaknesses of the SWOT framework is that the analysis it produces is static.

Though the data used at the time you carry out a SWOT analysis for small business may be accurate, internal and external factors have the potential to change rapidly and could make your SWOT analysis outdated.

This is especially true if you’re in the middle of a major business development drive and expect to see big internal changes as you grow.

Inflation, price changes, and new government legislation can all undermine the accuracy of a SWOT analysis over time.

Though a SWOT framework can be a useful resource in the short term, it’s important to revisit your SWOT findings regularly and update them to keep them aligned with the changing nature of your business.

As a general guideline, business owners should aim to review and update their SWOT analysis at least annually. Large internal or external changes can also provide a good prompt to revisit your analysis.

Marketing SWOT analysis

While a SWOT analysis is commonly used for a top-level business strategy, it can also be useful when focusing solely on your small business marketing.

In this section, we’ll walk through the process of carrying out a marketing SWOT analysis and how you might apply it to your small business.

Articulate your objective

When carrying out a marketing SWOT analysis of a business, it’s important to start with a specific objective in mind. This will provide a sense of direction for your data gathering and the kinds of strengths, weaknesses, opportunities and threats you’ll be focusing on.

For the purpose of this guide, we’ll say that you’re an independent retailer looking to invest in your traditional and online marketing, to drive more online and in-store sales, and compete with other stores in your niche.

To help inform the different aspects of your SWOT analysis, it’s recommended that you divide this overarching objective into more specific elements, including:

• What exactly you want to achieve by investing in marketing, e.g. more brand awareness, higher customer loyalty, increased online sign-ups, etc. 

• The KPIs you’re going to measure to see whether or not your marketing efforts are successful. 

• Online marketing might include organic and paid traffic, page views, and sales from specific online traffic sources. 

• Traditional brick-and-mortar marketing might include increases in in-store sales or the percentage of mailed vouchers that were redeemed.

Considering your strengths

Once you’re sure of your objective, you can begin analysing the strengths that may help you with your marketing drive.

Some questions to ask yourself here might include:

• What assets do I have that could support my marketing initiative? E.g. a well-designed website, a strong brand, or a well-placed physical store. 

• What skills or expertise do I have that could help our marketing? E.g. past marketing experience, a strong social media network, and a good reputation in the industry.

Acknowledging weaknesses

Weaknesses are another crucial part of your marketing SWOT analysis. This part of the framework will help you set realistic marketing goals, and plan to patch and improve the weak points of your marketing in the future.

Some questions to ask yourself when assessing your weaknesses in your marketing SWOT analysis might include:

• What kinds of marketing assets aren’t being fully utilised at the moment? 

• Are we able to publish more content on our website, roll out new print vouchers, or improve our online advertising?

• Is our social media following up to the standard of some of our close competitors?

Seizing opportunities

Once you’ve listed your key strengths as a small business, you can begin to identify the external opportunities that may help you improve your upcoming marketing initiative.

To collate the opportunities you might be able to take advantage of, consider these questions:

• What marketing tactics are the competition neglecting? E.g. advertising space in local papers and magazines or location-targeted social media content.

• What trends can our marketing benefit from? E.g. types of products that are gaining popularity and could be promoted.

Identifying threats

Finally, look into any external factors that could undermine the potential of your marketing strategies and make objectives harder to reach.

Important questions to ask yourself for this section of your marketing SWOT analysis include:

• What is the current sentiment in our audience and how could this make it harder to promote our products?

• Which of our competitors are likely to have a much bigger marketing budget than ours?

7 steps for implementing SWOT analysis in your business strategy

A SWOT analysis can be the perfect way to collate information on your small business and build a single, well-organised framework you can use to inform your strategy going forward.

Here’s how you can implement a SWOT analysis in your small business strategy in 7 steps.

Gather data

The first step in any SWOT analysis is to gather the data you’ll need to carry out your analysis.

If your small business is focused on activities at its physical premises, for example a shop, restaurant, or cafe, you might want to look at sales records from your point-of-sale (POS) system, your foot traffic, or the redemption of printed vouchers.

If most of your business is online, key data sets might be accessible through the metrics and reports on your web analytics suite.

Whichever way you conduct your business, it’s essential to verify that the data is authentic and reliable. Start the process by considering any kind of limitations you might face in terms of gathering data and maintaining accuracy.

Depending on the current complexity of your business, you may be able to vet and collate all the necessary data yourself, but don’t neglect to enlist other staff who may have a better working knowledge of the data sets you’re going to use.

Brainstorm

The next step is to gather your team for a collaborative SWOT brainstorming session.

Using a shared document or a whiteboard, invite everyone at your business to share their perspectives on what your strengths, weaknesses, opportunities, and threats are.

Opening up the SWOT analysis to your wider team will help you look at this task from all possible angles, and highlight challenges or assets that you may have overlooked before.

This will make for a more thorough analysis of your business’s situation, and help you draw more effective strategies from your SWOT framework.

Analyse your strengths

Once you’ve gathered all the accurate data and perspectives possible, you’ll be ready to start populating the SWOT framework.

The first category to analyse is your strengths: the activities your business is currently doing well or the assets it possesses.

These might include the unique skill sets of your staff, the resources you have that others don’t, or some unique feature of your customer experience that sets you apart from the competition.

If you’re a cafe owner, SWOT analysis strengths examples might include a favourable relationship with your supplier, a generous customer loyalty scheme, or a guarantee about the quality or authenticity of your coffee and snacks.

Understanding your strengths will give your SWOT analysis a clearer sense of direction, helping you decide which of your assets you should be investing in and how they can be leveraged to offset your business’s weaknesses.

Analyse your weaknesses

Moving onto the W in SWOT, the next step is to analyse the internal factors that are holding your business back.

This might include your business activities that are the least profitable, the resources you’re lacking, or assets that your competitors have that you don’t.

The Weaknesses in your SWOT analysis can also include factors about your business that are inevitable but still require consideration.

If you’re running a florist, SWOT analysis weakness examples might include the fact that you’re operating a seasonal business model, with natural drops in demand at certain times of the year, e.g. after Mother’s Day and Valentine’s Day.

When analysing the weaknesses in your business, it’s important to remember you’re not to simply dwell on the downsides of running your particular business.

Instead, look for ways to mitigate the issues facing your business, and anticipate how you’ll tackle them in the future.

Identify opportunities

When you come to the Opportunities section of your small business SWOT analysis, you’ll have a chance to think about where your business is going and consider the kinds of things you hope to achieve in the long and short-term future.

This might include trying to capitalise on major trends in your industry or expected changes in legislation and regulations that could drive down the operating costs of running your business.

Opportunities can also be much simpler and easily achievable changes that could benefit your business, for example updating your payment processing to a system that helps streamline your sales records.

When listing opportunities for your SWOT analysis, it’s important to keep your considerations focused on the near future of your business, rather than longer-term and more ambitious goals.

This will help you translate your SWOT analysis into a more practical roadmap and decision-making tool once it’s complete.

Analyse threats

Running a small business can be full of challenges, so many merchants can find filling the Threats section of a SWOT analysis to be fairly easy.

This is where you’ll assess any external factors that might have the potential to disrupt your business, such as: 

• Well-equipped competitors.

• Trends that are causing customers to pivot away from your brand.

• New legislation that has the potential to negatively impact your business.

If you’re running a restaurant that focuses on a particular kind of cuisine, for example, a potential threat might be a new restaurant setting up in the area that’s serving the same kind of food and targeting the same customer base.

Properly analysing the threats to your business will help you understand where the biggest potential for disruption stems from. From there, you’ll find it easier to prioritise your resources and prevent these external factors from becoming too much of a problem.

Create a roadmap

Once you’ve addressed all 4 sections of your SWOT analysis, the final step is to use your findings to inform a strategic roadmap for success.

Creating a SWOT-based roadmap will involve considering each of the quadrants and planning out specific, actionable work based on your findings.

These tasks and projects should be aimed to maximise the potential of your strengths and opportunities while finding ways to mitigate or even remove weaknesses or threats.

When you’re strategising based on a SWOT analysis for your small business, it can be natural to want to focus on the positive aspects in your S(trengths) and O(pportunities) quadrants.

While the positive aspects of a SWOT analysis can certainly be useful for directing your strategy, it’s important to balance your roadmap with objectives rooted in your weaknesses and threats.

Anticipating obstacles and proactively working to tackle them will ensure long-term sustainable growth for your business. Helping you find new ways to convert weaknesses into strengths and threats into opportunities.

Plan for small business growth with a SWOT analysis 

A SWOT analysis can be an immensely powerful tool for building a better understanding of your own business and informing your future strategies.

Whether it’s for top-level business strategy or focused on a specific area like marketing, a SWOT analysis provides a practical, familiar framework for bringing together separate data points and approaching business decisions with confidence.

We hope this guide has helped you understand and carry out your SWOT analysis for your small business.

Disclaimer: The contents of this page are intended for informational purposes only and should not be construed as professional advice. For matters requiring legal or financial expertise, it’s recommended to seek guidance from qualified professionals.