Whether you are writing a business plan to apply for a loan, or just checking out where you currently are with a decision, a S.W.O.T. (pronounced "swat") Analysis is very important to complete.
In a business plan, this kind of research is important to illustrate that you are aware of just what it is you are doing or going to be getting into. It does take a bit of research to fill in the facts, but with some diligence you will be much more aware of what is going on around you. In fact, you may even change the direction of things with the awareness that comes from this kind of report. Individuals can make a report for themselves just as much as a private business or public entity.
While certainly something serious to consider, after all we can presume you want to get that bank loan to buy more machines, the parallel this week will be taken from 1980's comedy "Airplane!". In it, Ted Striker (a former Air Force pilot) must quickly take control of a 747 and land it safely to save all the ill passengers aboard. What a predicament! How can he do so? Let's take a look!
S - Strengths. This is an internal measure of you or your company and what it is good at doing.
Ted Striker: I flew single engine fighters in the Air Force, but this plane has four engines. It's an entirely different kind of flying, altogether.
Rumack, Randy: [together] It's an entirely different kind of flying.
Here we can see that Ted already has pilot experience in a crisis and is able to command respect as the two other people in the cockpit took his words as a command literally. What is your business good at doing? Something that there is a proven track record of success? Certificates or diplomas of training? Trophies, awards, or other signs of proof to back up your claims will help fill in this description of where your strengths lay as a business.
W - Weaknesses. This is an internal measure of where improvement can be made.
Hanging Lady: Nervous?
Ted Striker: Yes.
Hanging Lady: First time? [regarding flying on a plane]
Ted Striker: No, I've been nervous lots of times.
Unfortunately for Ted, while he was a pilot in the Air Force, he has a rather unpleasant memory that has riddled his ability to fly with doubt and guilt. In a retail environment perhaps the weakness is a lack of procedural policy, outlined customer service, or even something physical such as the location is poorly lit with bad parking. BE HONEST! It may be odd to lay out these things to an entity that may give you funds, but if you can't rationalize what is wrong with things then you are in trouble even before the money is made available. Plus, lying or hiding information on your application is bad and can even get you in legal trouble.
O - Opportunities. These are external areas of growth or directions in which you can go.
Rex Kramer: [points out the window from the tower to the plane] There he is. Striker, you're coming in too fast!
Ted Striker: [in the plane] I know, I know!
Elaine Dickinson: [relaying] He knows, he knows.
Outside of Ted's ability to fly he was able to gather a support network of people to help guide the plane in and keep the passengers as comfortable as possible. Everyone from a jive-talking grandmother to a doctor and even a blow-up autopilot. He was able to expand his influence outside himself to try and successfully achieve his goal. Perhaps for your insurance business it is expanding your prospecting and service into another demographic? An opportunity for a heating and cooling service to expand into electrical as there are similarities in service. You must look beyond your walls, city limits, or even current conventions to grow. Efficiency improvements can be made here, too.
T - Threats. Your threats are the external detriments to your goal.
Ted Striker: Because of my mistake, six men didn't return from that raid.
Elaine Dickinson: Seven. Lieutenant Zip died this morning.
Ted will seemingly be forever haunted by his mistake, and while he wasn't there to personally keep "the Zipper" from dying, as his team continues to pass it will forever eat away at him. It isn't anything he can help, simply the nature of the circumstances. Like him, you too will face threats around you that must be addressed. Competition, especially online competition, is a rather common threat found in this section of the report. But other factors such as being a farmer in a drought-prone area, building something in a flood plane, or even realizing that what you do is prone to theft are aspects of your circumstances that must be confronted.
Be honest and informed on all aspects of your S.W.O.T. Analysis. You will very likely be asked to elaborate on not just the good items but the bad as well. This report just as much helps you understand what you are facing as it does try to help a total stranger to who you are and what you do catch up to your experience and vision. Make plans to support and perpetuate your Strengths and Opportunities as well as ways to mitigate and reduce your Weaknesses and Threats.
Surely this is something that you can do.