SWOT Analysis

What is SWOT Analysis?

SWOT in SWOT analysis stands for strengths, weaknesses, opportunities and threats. SWOT analysis is a method of analyzing strategic planning of a business. SWOT analysis gained much popularity in the 1980's.

Why is SWOT analysis useful or important?

SWOT analysis is very useful when writing a business plan. You learn business SWOT analysis when you learn how to write a business plan. Almost all good business plans contain business SWOT analysis of the proposed business.

Conducting a SWOT analysis for your business will help you take a look at the internal function of your business and the external environment in which your business operates. SWOT analysis will help you identify new directions your business can pursue.

What does SWOT analysis refer to?

SWOT analysis or business SWOT analysis examines the following factors of the business.

• Strengths
• Weakness
• Opportunities
• Threats

How to do business SWOT analysis?

Below is a method you can use to do your business SWOT analysis. You can also use the steps below as a business SWOT analysis example. We will give a sample of SWOT analysis in other section of this How to Start a Business website.

SWOT analysis Step 1: Internal Scan of your business

During the internal scan you identify the strengths and weaknesses of your business, the first two factors of the business SWOT analysis. The followings are some questions to help you with this SWOT analysis process:

• What are the key resources that make you successful?
• What information do you use to manage your business?
• How do you communicate with your employees?
• How do you maintain communication with customers?
• What makes your business unique?
• Why would someone want to buy your business?

SWOT analysis Step 2: External Scan of your business

During the external scan you identify the opportunities and threats facing your businesses, the last two factors of the business SWOT analysis. Below are some questions that might help you with this SWOT analysis process.

• How do you compare to your competitors?
• How is your industry changing this year?
• How will your industry change in the next five years?
• Describe common characteristics of your customers.
• Why do your customers buy from you?
• What about your competitors worries your the most?
• What technology trends affect your business?
• What one even could most threaten your business?