SWOT: Connect the dots to a better future for your small business

Editor’s Note: This article was co-authored by Karen Utgoff.

If you have read our two recent posts on getting in touch with your business’ strengths and weaknesses (S and W) and spotting opportunities and threats (O and T), we hope you have begun a process to view your company through this new lens.

Many owners and executives complete their SWOT and stop there. Some follow the guidance of strategic planners and complete a formal process of mapping specific initiatives onto a matrix with rows and columns headed by the S, W, O and T lists. While this exercise can be readily adapted for small to mid-sized companies, understanding the underlying reason is important.

We see identifying strengths, weaknesses, opportunities and threats as only the beginning. If you stop there, you haven’t connected the dots to day-to-day actions. In today’s post we suggest how to take the next step. Follow these guidelines to get a deeper understanding that can help you better evaluate which projects or initiatives are most likely to move your company forward.

• Focus – Commit to your two or three most promising projects or initiatives. Most businesses have more opportunities than they can manage and are well served by establishing priorities and doing a few things well.

• Analyze – Evaluate each planned project/initiative in light of your strengths, weaknesses, opportunities and threats. If a possible project with a big potential payoff requires a capability that has been beyond your reach in the past or serves a target market that is static, it may ultimately be less lucrative or more risky than one with a smaller initial payoff that leverages your core abilities or serves a growing market.

• Strategize – Look at the big picture. Consider combinations of projects. How do they interact? Complementary projects will be mutually reinforcing.

• Communicate – Most initiatives impact more than one function within a business. Get input from all involved to understand the financial, operational, human resources, marketing and sales perspectives. Seek input from suppliers, partners, advisers, customers and others with useful information from outside your company.

Consider this hypothetical example:

A restaurant owner wants to increase profitability and the size of her customer base by stimulating business during slow periods. She is eager to take advantage of her restaurant’s location, periods of significant foot traffic throughout the day and free parking.

She has determined that her company’s strengths are its loyal customer base, excellent food, comfortable atmosphere, and affordable meals. Unused capacity, somewhat slow service and a limited menu are weaknesses. An emerging threat is the local gourmet market, which recently began offering high-quality prepared meals.

She is considering three projects:

• Opening for carry out breakfast to meet the needs of those walking by in the morning.

• A new quick lunch menu to serve customers in a hurry.

• Value-priced, early bird dinners to compete with the gourmet shop down the block.

Each will require significant investment in new menu items, marketing, and staffing changes. Takeout meals will need special packaging and labeling equipment.

Opening for breakfast would increase costs by adding to hours of operation; however, it’s projected to boost revenue and the customer base. The quick lunch menu would increase revenue and be the least expensive to implement; yet, it would not add to traffic during slow times, would require speedier service, and may not increase the customer base. The takeout dinners would likely appeal to current customers and boost currently sluggish sales during a time of high foot traffic but be somewhat expensive to implement.

While all have potential, she decides to focus on takeout breakfast and dinners. She can use the same packaging for both and will need only an order taker and cook as there will be no table service. She’ll pass out coupons both to her lunch crowd to help get the word out about new takeout offerings and to breakfast customers to encourage them to try lunch and dinner.

Considering each opportunity in light of strengths, weaknesses, threats and the overall opportunity highlights the tradeoffs, which results in better decisions. This is where SWOT analysis pays off.


Since 1991, Laurie Breitner has assisted organizations with operational improvement, organizational development and strategic planning. Learn more at http://www.lauriebreitner.com.

Karen Utgoff, principal of Karen Lauter Utgoff Consulting, is a market-oriented business strategist based in Amherst, MA. Learn more at http://www.utgoff.com.


  1. Janice Greenberg says:

    Thanks, Karen! We just completed a SWOT analysis for a non-profit task force that is assessing the viability of a new service offering within their agency. This information and your recommendations for "connecting the dots" will be helpful for the task force.

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