If you are looking to get bank funding for starting your business, or even to expand and develop it, you will be asked to produce a business plan to present to potential lenders. A key part of this plan is a SWOT analysis, which will help you to identify whether you business is likely to succeed and plan to maximise its chances.
The beauty of a SWOT analysis lies in its simplicity. The concepts are easy to understand, even for someone who has not performed any form of strategic planning before. By making you think about your project or business in terms of harmful or helpful, external and internal factors you can present a convincing case for success in your business objectives, either simply to give yourself peace of mind and focus, or as a tool to help secure funding from external sources.
What is a SWOT Analysis?
SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. It’s just a fancy way of saying “let’s look at what’s working, what isn’t, and what might happen next.”
The basics haven’t changed:
- Strengths: What gives your business the edge? Maybe it’s your amazing team, unique product, or loyal customers
- Weaknesses: Where could you improve? Perhaps your marketing needs work or your location isn’t ideal
- Opportunities: What exciting possibilities are out there? New markets, changing trends, or gaps your competitors have missed
- Threats: What keeps you up at night? New competitors, changing regulations, or rising costs
It is important to try and keep things simple. Whatever the purpose of your SWOT keep the question clear in your mind and ensure you are staying focused on the central issue. This is especially important when others are involved in the process as all parties need to be able to understand the finished analysis and clearly see the implications and outcomes.
How I Do SWOT Analysis
I still find a simple 2×2 grid works best for SWOT. Yes, there are fancy digital tools now, but sometimes simple is better:
- Write your main question at the top
- Grab your team (or just yourself) and start brainstorming
- Back up your points with research
Making Decisions With Your SWOT
I’ve found SWOT really helpful for keeping emotions in check. When you’re passionate about your business, it’s easy to let your heart rule your head – SWOT helps bring clarity.
Banks love seeing SWOT analyses in funding applications because it shows you’ve thought things through. Many now even provide digital templates to help structure your thoughts.
The best part? Once you get into the habit of doing regular SWOT check-ups, you’ll find yourself making better decisions to keep your business thriving nowand into the future.
