SWOT, Done Right, Can Provide Important Insights

SWOT analysis, strength, weakness, opportunity, and threat words on blackboard.

I’m a big fan of conducting SWOT analyses, not only for strategic planning but really for any situation where you’re faced with an important business decision. A SWOT can help you gain clarity around the strengths and opportunities you can leverage and the weaknesses and threats you need to overcome. Pretty basic, but very powerful when done well.

Though common in large organizations, many small businesses and solopreneurs may not be familiar with the tool. Let’s take a look at how this might work. We’ll use an example that most of you should be able to relate to—planning a family vacation. While it’s not likely that you actually go through a formal strategic planning process when you plan your vacations (at least most of you probably don’t!), there’s a good chance that this planning is going on in your head at some level.

So, you’re planning a family vacation, and let’s pretend that you’ve gathered your family members together to do a SWOT analysis. You’ve come up with a broad list of strengths, weaknesses, opportunities, and threats, and you’ve narrowed that list down to the top 3-5 items in each category which are:


1. Plenty of money in the budget for a trip.

2. The entire family is excited about taking a trip together.

3. The entire family agrees on a vacation destination.

4. The entire family’s schedule allows for two weeks away.


1. Little brother gets car sick and Mom is afraid of flying.

2. Big sister doesn’t want to leave the family dog behind.

3. Dad wants to plan the itinerary completely in advance; Mom prefers to be more spontaneous.


1. There’s a great deal on rooms at a wonderful hotel in your destination city.

2. Because of the many cultural and historical aspects of the city, the kids will actually get some educational value out of the trip.

3. Mom is able to take advantage of the opportunity to meet with a potential new client.


1. It’s a beach vacation, and there’s always the potential for bad weather that could spoil the trip.

2. You’ve read some recent reports of increasing crime in the area.

3. An important meeting at Dad’s place of employment could throw a monkey wrench into the timing of the trip.

Using the SWOT to Make Decisions

As you review this list of top strengths, weaknesses, opportunities, and threats, hopefully you can quickly see how you would attempt to leverage (or take advantage of) the strengths you identified, how you would consider the weaknesses and their potential impact on your plan and consider ways of potentially overcoming these weaknesses, how you would take advantage of the opportunities as you develop your plan—and how you would take steps to avoid or minimize the threats (or, in cases when you have no control—e.g. bad weather—how you might incorporate elements in your plan to address these potential threats).

And that, in essence, is exactly what you would do in your business as you move forward with the strategic planning process! The issues you identified through the SWOT analysis are the foundation for the next step of developing the actual plan.

It’s that simple—and that powerful.

SWOT in Practice

A couple of additional points about using SWOT effectively are important.

First, whenever possible, make sure you’re creating your SWOT based on real data. Saying one of your strengths is “great customer service” without the data to back that up could lead you to miss out on insights that might require improvements in your service.

Another important point—make sure you’re using a true brainstorming process as you conduct your SWOT analysis. No debate. No deep discussion of the points made. A brainstorming session requires simply seeking input and documenting it for later consideration. Let the ideas flow!

Finally, gather broad input. The most input you get from a broad array of key stakeholders—employees, customers, vendors, etc.—the better insights you’re able to generate. This doesn’t mean they have to be involved in meeting discussions. It’s simple, though, to do a survey or poll to gather these inputs for consideration by your core team.


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