What Is SWOT Analysis? (Part 3)

Strengths and opportunities were covered in part 2, which is the good news about your business. Now let's discuss the other areas of the SWOT analysis: Weaknesses and Threats. These sections are just as important as the others. Understanding your vulnerabilities and pinpointing the threats your business faces gives you a clearer picture of what can potentially hinder you or hurt your business. Having this information allows you to make more intelligent decisions and helps you avoid surprises.

Identifying Your Vulnerabilities

Start with candor about your weaknesses. These are internal constraints that limit what you can do or cause problems in your business. Everyone possesses them, and knowing exactly what your business's weaknesses are on paper can help you become more successful.

Weaknesses may be:

• Resource gaps: Do you not have the skills, equipment, or tools needed for your business to perform at a high level of production?

• Unproductive processes: Do you have bottlenecks, delays, or steps that cause you issues?

• Customer complaints: Are there repetitive customer complaints?

• Market visibility: Are you less known than the competition?

• Financial limitations: Are budget constraints affecting growth or operations?

• Lack of innovation: Are you falling behind industry trends or failing to change offerings?

Specificity is key. Are there slow turnaround times? Inability to answer product questions? Confusing return procedures? The more specific you are, the more straightforward it is to find solutions or reduce the impact.

Asking Difficult Questions About Weaknesses

Get more clarity by asking yourself:

• What do customers say they dislike about your company?

• Where do your competitors excel over you?

• What are your people missing that slows down progress?

• Are outdated systems or technology slowing you down?

• Do you lack target marketing or sales channels that others possess?

• Are internal communication or team dynamics hindering progress?

Input from your people, suppliers, or valued customers can uncover blind spots you could overlook. What's insignificant to you could be a big deal for others. Insights from others help to provide a reality check.

Why You Don't Want to Avoid Weaknesses

Dismissing weaknesses won't make them go away. They subtly drain your business over time. For instance:

• A fragile supply chain can lead to delays and dissatisfied customers.

• Negative web presence loses potential customers.

• Poor accounting can create expensive errors and missed opportunities.

• Insufficient training can cause errors or low employee morale.

• Static branding may not attract new, younger clients.

Untreated weaknesses tend to grow or lead to bigger problems in the future. Fixing them now enables you to plan realistic fixes or replacements before it gets out of hand.

Turning Weaknesses into Strengths

Weaknesses are not necessarily perpetual burdens. You can turn them into strengths if you turn them into opportunities. For example:

• If your users say that your site is cumbersome, simplifying it could boost sales and satisfaction.

• Your staff lacks some expertise; training or recruitment can get you stronger and more competitive.

• Your marketing is ineffectual; trying new channels could get you new prospects, such as seo digital marketing.

• If you work short hours, extending or varying them might bring in more customers.

• If you're not very creative, introducing new products or partnerships can help reawaken your company.

  
  

Being aware that you have something to change is a great starting point. You can decide to work on what to fix right away, what to put off for a later time, and what is not currently worth repairing.

Understanding Threats Outside Your Control

Threats are external influences that may cause danger to your company. You cannot prevent them from happening, but you should be aware of them. Examples include:

• New competitors in your industry

• Changes in legislation or regulations

• Economic crises affecting customer expenditure

• Shifts in customer desires or behavior

• Unexpected disruptions in the supply chain

• Bad publicity

• Natural or crisis

• Technological disruptions

Threats occur from a variety of sources. Staying alert enables you to prepare for them or help prevent you from being taken by surprise.

Determining the Most Important Threats

All threats are not equal. You must evaluate every one of them based on:

1. How probable is this threat to materialize?

2. How significant would the effect be if it does materialize?

3. Can you prevent or mitigate its impact in any way?

4. How rapidly would you have to act?

For instance, a new competitor opening up nearby would be highly probable and could steal away customers, so it must be attended to. An economic downturn on another continent may be less directly impactful, yet you still need to watch the threat.

You can establish a basic rating system to judge threats:

High risk/high impact: Develop instant plans

High risk/low impact: Monitor and be prepared to plan if necessary

Low risk/high impact: Put plans in place, but focus on other threats

Low risk/low impact: Keep an eye on, but low priority

Threat Management

For some threats, you can prepare plans beforehand. Others require a quick response if they happen.

Response methods are:

• Diversifying sources so you don't end up at risk if one collapses

• Staying up to date on market trends and regulations to be able to adjust your business

• Keeping cash reserves to weather economic changes

• Building your online reputation to handle poor reviews more effectively

• Creating fallback plans for crisis scenarios, such as supply chain failure

• Incurring expenditures on cyber safety to help prevent data breaches

• Winning over community leaders or trade associations to remain vigilant

Preparation is not foreseeing every possible threat, but it reduces surprises and tension.

Common Mistakes When Addressing Weaknesses and Threats on a SWOT Analysis Chart

Most entrepreneurs make a mistake when handling weaknesses and threats, for instance:

• Avoiding or denying weaknesses since they are painful to face

• Ignoring threats in the hope that they will not happen

• Considering every weakness or threat as an instant crisis

• Dealing with small issues to the point of squandering resources

• Merging weaknesses (inside issues) with threats (outside issues)

An honest and equitable analysis helps you see what is of greatest importance and stops panic. Prioritize by impact and likelihood rather than emotional response.

Using Weaknesses and Threats to Make Smarter Business Choices

Knowing your weaknesses and threats helps you make better business decisions by:

• Identifying where to invest time and money in fixes or upgrades

• Helping determine when to change direction or alter your products or services

• Helping direct risk management and when to avoid taking risky steps

• Providing input for honest communication with customers, employees, and partners

• Keeping you grounded on what your company can do today

• Enabling more accurate budgeting and allocation of resources

  
  

This enables you to focus your resources and energy appropriately.

Maintaining Your SWOT in Balance

Remember that weaknesses and threats tell only half the picture. You've already analyzed strengths and opportunities. Together, all four elements paint the total picture of your business environment.

Keep your SWOT analysis current. What was a weakness this time last year could become a strength. What was a minor threat could become a larger issue. Reviewing your SWOT every 3-6 months helps maintain its importance.

Examples of Weaknesses and Threats

Suppose you have a local coffee shop. Your weaknesses could be:

• Limited table space in peak hours

• Old POS system leading to slow transactions

• Small online presence compared to rivals

• Turnover of staff, resulting in unreliable service

• Insufficient delivery options to an expanding marketplace

Threats may be:

• A newly opened coffee shop within blocks

• Increasing rent levels in your locality

• A change in consumer trends to home-brewed coffee

• Disruptions in the supply chain are impacting fresh coffee beans

• Health codes are tightening on food service

Knowing your weaknesses enables you to take measures like investing in a faster POS, establishing a loyalty program to keep frequent customers coming back, or looking into online ordering.

Or take a small landscaping business. Weaknesses could be that you do not have enough trucks or no marketing expertise online. Threats could be:

• New large landscaping franchises entering the region

• Local government updates regulating pesticide use

• Economic downturn, reducing homeowner spending

• Rising fuel costs, adding to operating expenses

• Weather and changing seasons impact work schedules

Knowing these allows you to prepare in advance, perhaps by leasing additional trucks or understanding simple target market research.

Managing Emotional Resistance

Threats and vulnerability are uncomfortable or even discouraging. You're entitled to wish to push those facets of your business away. But fighting these feelings only delays you further.

Try to view this process as empowering. By knowing what your challenges are, you reduce uncertainty. You're taking control by naming what might hold you back.

Remember, weaknesses don't dictate your business, they are just areas of potential growth. Also, threats aren't failures, they're alerts to be ready or cautious and help you prepare your business for the future.

Last Thoughts on Weaknesses and Threats

Facing your threats and weaknesses head-on isn't pleasant, but it's necessary. It's a matter of realistic awareness, not fear. By articulating challenges, you remove their power to surprise you.

You don't necessarily need to fix everything right now. The goal is to know so you can make better decisions down the road. The SWOT method is something that you can use again and again over time as your business continues to change and grow.

When you combine what you know about your strengths, opportunities, weaknesses, and threats, you've got a complete picture of where you are and where you're going.

Now that you know how to research and implement all four areas of a SWOT analysis for your business, it is time to decide what you want to start working on to help propel your business forward. Whether you want an SEO Health Check or want a full range of SEO digital marketing services, we are here to help your business succeed!