The Business Plan and SWOT Analysis
One of the most valuable things you can do before crafting your business plan is to conduct an analysis called SWOT. This process of analysing your business’s strengths weaknesses, opportunities and threats will give you precious insight into the benefits or challenges faced by your business. This review of the internal workings of your business can help you to create a clearly-focused business plan.
Capture Relevant Factors
SWOT analysis is all about capturing the factors of your business which are relevant to the goals you want to achieve. Therefore, your sentence structure won’t be as of as much importance as capturing as many points as you can. A bulleted list under each heading is a great way to get hold of general issues, with review and elaboration taking place later on.
Positive and Negative
SWOT involves looking at your business’s positive and negative aspects. To do this, you will need to look at your organisation from an honest and objective point of view. These positive and negative points should appear below each of your headings. The categories in your SWOT analysis can be addressed in any order.
The Positives
The strengths of your business are both tangible and intangible, as well as being within your control. Ask yourself what resources your organisation has, what advantages you have over your competitors and what you do well. It can help to divide your strengths into areas so that all are covered. For example, you may divide your analysis of strengths to cover several departments, such as finance and marketing. Remember that your strengths will also stretch to those who are involved with your organisation and cover their credentials, education and reputations, among other areas.
The Negatives
Next is to list your business’s weaknesses. These are also within your control but are those things that are preventing your business from maintaining its edge over the competition. Weaknesses can be anything from the lack of a skill in one area to the physical location of your business. Another way to look at weaknesses is those things which take away from the value of what your business offers. When listing them, think of your best competitor and what you need to do in order to compete with them.
The Attractive Factors
Opportunities are those reasons external to your business that affect its ability to thrive and exist. Here, you will list all of the opportunities which exist in places like the market and other areas. These will represent what will come following the implementation of your marketing strategy. Opportunities can have time frames placed alongside them if this is relevant. They can also be hidden strengths if they are within your control and located inside your organisation, so be sure and list them accordingly.
Challenges
Potential threats to your business are, like opportunities, located outside your business and as such, are beyond your control. Threats can undermine numerous facets of your business. Whilst you cannot control the threats, you do have control over making a contingency plan which can address them if they happen. Threats are rooted in any development or trend which can eat away at your profits.
Although things like your business’s competition are an ever-present threat, others can appear at any time. Changing government regulations, negative press coverage and cost increases can all threaten the hard work you’ve put into your business. Getting these on paper will give you a crystal clear picture of what is around you. You may also wish to categorise these in terms of their seriousness and likelihood of occurrence.
The potential and condition of your business will be made obvious once your SWOT analysis has been completed, allowing you to create a realistic and strength-based business plan.