SWOT analysis, done in a way that changes something
Almost every SWOT in almost every business plan is four lists of adjectives that could have been written about any company in the sector. The framework is not the problem. Stopping at the framework is.
2 min readUpdated
The four boxes, stated properly
| Box | The discipline |
|---|---|
| Strengths | Internal, present, and specific to you. If a competitor could write the same sentence, it is not a strength. |
| Weaknesses | Internal, present, and things you would rather not write down. A weakness list with nothing uncomfortable on it is decorative. |
| Opportunities | External and not yet acted on. An opportunity you are already pursuing is a strategy, and belongs in the plan as one. |
| Threats | External and outside your control. A threat you can eliminate by choosing differently is a decision, not a threat. |
The most common error is putting an internal choice in the external column. “Rising competition” is a threat. “We have not hired a salesperson” is a weakness, and calling it a threat quietly moves the responsibility somewhere else.
Make every entry carry a number
The difference between a SWOT that reads as analysis and one that reads as filler is almost always quantification. Not every entry can carry a figure, but most can, and the ones that cannot are usually the ones that were vague to begin with.
| Generic | Specific |
|---|---|
| Strong local reputation | 4.7 average across 340 reviews, ahead of the two nearest competitors |
| Limited working capital | Lowest projected cash is $26k in month sixteen, against $41k of monthly fixed cost |
| Growing market | Catchment population up 8% since the last census; three new residential developments permitted |
| Supply chain risk | 68% of ingredient cost sits with one distributor on 30-day terms |
The part everyone skips: pairing
A SWOT becomes useful when you cross the boxes against each other and write down what each pairing implies. This is the step that turns four lists into four decisions.
- Strength × Opportunity
- What do you do first, because you are already well placed to do it? This is usually where the plan's next ninety days come from.
- Strength × Threat
- What protects you? Write the sentence — it is the closest thing most small businesses have to a moat statement.
- Weakness × Opportunity
- What are you going to miss unless you fix something? Frequently the clearest justification for the use of funds.
- Weakness × Threat
- The uncomfortable box. Where the business is genuinely exposed, and what the mitigation is. A reader who finds it here respects it; the same reader who finds it themselves does not.
Every rule here is enforced by the product.
The checks this article describes are the checks that run before a plan can be exported. Free to generate and read.