Welcome to Day 4 of our 5 Day SWOT Analysis Challenge!
Small business owners are notoriously busy people. We understand that you have a lot of items on your daily to-do list, but we’re about to suggest one more. Every business owner should sit down and conduct a SWOT analysis, which gives you an inside look at the strengths, weaknesses, opportunities, and threats that can impact your business.
To help you cross this important item off your to-do list, we’re hosting a SWOT Challenge. Our five-day challenge, encourages entrepreneurs to conduct a SWOT analysis by working on one aspect each day.
The history of SWOT analysis
We know you’re anxious to complete your foursquare SWOT analysis template, but before you start brainstorming, we thought we’d look at how this process came to be.
Here’s a quick history lesson:
Who came up with a SWOT analysis?
While there is some debate over who came up with the SWOT analysis, most research suggests that Stanford professor Albert Humphrey was the father of this process.
How did the strategy come about?
Humphrey led a research project at Stanford University in the 1960s and 1970s that tried to figure out why corporate planning failed within several big companies. The team started breaking the data into categories like opportunities and threats.
Eventually, other strategists tweaked Humphrey’s categories into the SWOT formula that we know today.
Ok, history class is over. Time to pull out your SWOT templates and start thinking through the threats that face your business.
How to define your company’s threats
A threat to your company is an external factor, something that you can’t control, that could negatively impact your business.
You may be thinking, if threats are outside of my control, why should I spend time identifying them? By knowing your threats, you might be able to find a strategy to minimize them, or at least, come up with a plan to handle them in a way that won’t shut down your business. Identifying threats is all about being prepared and taking proactive steps to minimize the hurt.
Coming up with a list of threats can be difficult. These issues don’t spring to mind as easily as your strengths, but there are certain categories that most external threats fall into.
You can use these categories to brainstorm possible threats to your business:
- Economic trends. Examine the economic conditions that impact your business.
- Market trends. Think about changing or shrinking market trends.
- Funding changes. Think of donations, grants, or other shifting revenue streams that aren’t within your control.
- Political support. If political support is shifting, you’ll want to analyze its impact.
- Government regulations. Think of regulations that are changing that might hurt your business.
- Changing relationships. Consider shifting relationships with vendors, partners, or suppliers.
- Target audience shift. Your target market might be shrinking, aging, or shifting.
Questions to ask to find threats
These categories should get your wheels turning. By thinking through each category, outside threats should come to mind.
We’ve also created a list of questions that coincide with the categories above to help you think critically about the threats that could be out there.
- Is the economy in your area in a recession?
- Will the economy negatively impact your customers’ ability to make purchases?
- Are economic shifts happening that impact your target audience?
- How is your market changing?
- What new trends could hurt your company?
- Is there more competition in your market that’s pushing you out?
- Do you expect a decrease in grant funding or donations this year?
- Will funding changes hurt your business? If so, how?
- Do you anticipate a shift in political support this year?
- Is there reason to be concerned over political shifts?
- What does your business stand to lose because of political changes?
- Are any regulations shifting that could cost more money or hurt production?
- What kind of damage could new regulations have?
- Are any outside business relationships changing?
- Is there any turmoil with partners or vendors?
Target audience shift
- How is your demographic shifting?
- What threats accompany these changing demographics?
- Is your audience changing in a way that you can’t accommodate?
Tips to find threats
- Do market research. As you’re looking into possible threats, you’ll want to conduct market research to see how your target audience is shifting.
- List every threat you can think of. If you think of a threat, list it. Even if that threat has consequences that won’t be felt immediately, it’s still better to have it on your radar.
- Threats exists, don’t panic. Listing threats may cause some anxiety, but remember that all businesses have threats. It’s better to know about threats than it is to turn a blind eye to them. Plus, we’ll give you some strategies tomorrow to help you minimize these threats.
Once you’ve listed your threats, your SWOT template should be filled in. You’re almost done!
Check back in tomorrow—we’ll show you how to take your SWOT analysis and turn it into actionable strategies that you can use to elevate your business.