What is a SWOT Analysis?

A SWOT analysis is a strategic planning tool used to identify and evaluate the internal and external factors that can impact a business’s success. The acronym SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. Strengths and weaknesses are internal factors, such as your company’s resources, processes, or reputation, while opportunities and threats are external, like market trends or competition. By organizing information into these four categories, businesses can better understand where they stand, what they’re doing well, where they need to improve, and what external forces they need to watch out for. This framework supports informed decision-making, helps clarify goals, and guides planning efforts in a structured, easy-to-digest format.

A SWOT analysis is like a snapshot of your business at any given moment. It helps you look at what you’re doing well (your strengths), where you’re struggling (your weaknesses), where there might be room to grow (opportunities), and what outside factors might hurt you (threats). For example, a strength could be your loyal customer base, a weakness might be your outdated website, an opportunity could be a growing trend in your industry, and a threat might be a new competitor moving into your area. Putting these thoughts down on paper can help you get out of the weeds and see the bigger picture, which is super helpful when you’re making plans or trying to figure out what to prioritize next.

Yes, especially during moments of transition or planning. Small businesses often operate on tight margins and limited resources, which means being strategic is essential. A SWOT analysis can be a low-cost, high-impact way to assess your business and make more confident decisions about where to invest your time, energy, or money. It’s especially useful when you’re launching a new product, making a pivot, or simply trying to figure out where to focus your efforts for growth. That said, it doesn’t need to be a formal exercise or something you hire a consultant to do. You can run a quick SWOT analysis on a whiteboard with your team or jot it down on a notepad. The key is to take a step back, look at the whole picture, and use it to guide smart, intentional decisions.

• A SWOT analysis is only for big companies or corporate strategy meetings. Not at all—SWOT is especially helpful for small businesses that need to make smart, efficient decisions. It’s a flexible tool that can be adapted for businesses of any size.

• You need a consultant to do a proper SWOT analysis. While consultants can offer an outside perspective, you absolutely can (and should) do it yourself. The goal is to be honest and thoughtful about your business, not to check every box on a fancy template.

• Once you do a SWOT analysis, you’re set. A SWOT analysis is a snapshot, not a one-and-done solution. Things change—markets shift, your team evolves, and new competitors show up. Revisit it periodically to keep your plans fresh and relevant.