How to write the SWOT Analysis section of your business plan
SWOT is an acronym that stands for Strengths, Weaknesses, Opportunities, and Threats. It’s an important technique that allows businesses to identify the advantages and disadvantages their company may have at present or in the future. The SWOT analysis is a critical part of the business plan. It plays a crucial role in determining the owner’s industry knowledge and realism. Both of which are vitally important if you’re looking to secure partners, financing, or deciding how to grow your business continually. It’s the opportune time to analyze your market, fellow competitors, and target customers. Outlined below are tips to help you build a robust SWOT analysis for your business plan.
Tip 1: Use accurate data.
Create validation behind each part of your SWOT analysis with the use of accurate data. For example, if your company’s strength is their high-quality work or one-of-a-kind customer service, support your claims with customer testimonials or stats representing your percentage of repeat business.
Tip 2: Be concise.
Prioritize each section of your SWOT analysis by selecting only high-priority vital elements. A great way to do this is by grouping situations. If you happen to have four weaknesses related to lack of finance, bundle it under lack of financial resources rather than listing each situation that stems from the exact cause.
Tip 3: Identify opportunities.
Knowing the opportune time to act upon an opportunity is essential at any stage of business and understanding the timeframe in which specific opportunities will be available to you. By identifying a timeline, you’ll be able to prepare your business to take advantage of current and future opportunities as they become available.
Tip 4: Develop strategies
Perhaps the most significant advantage of creating the SWOT analysis for your business plan is reflecting and developing strategies that allow you to leverage your strengths and opportunities and mitigate your weaknesses and threats. Keep in mind that opportunities and threats are external factors that you don’t necessarily have complete control over, such as the actions of your competitors, customers, economy, regulatory and seasonal changes. External factors require you to be able to adapt and pivot your business strategies as changes occur. Strengths and weaknesses are internal factors within your business, such as product features, location, distribution, staff, company structure, financial resources, and quality control procedures. The actions of the company can entirely alter internal factors. When creating your SWOT analysis, use the opportunity to evaluate how your strengths can minimize your threats and how your opportunities can reduce your weaknesses.
As a critical part of your business plan, the SWOT analysis requires you to research and dig deep into what has and hasn’t benefited your company’s performance. Refer back to the points above when writing your business plans SWOT analysis section. Creating a solid, well-thought-out SWOT analysis will allow you to better utilize your strengths and opportunities and create a strategic plan to conquer your threats and weaknesses and reach your business goals. Looking for help to write a business plan or just want to chat and bounce ideas? Let’s connect.