When it comes to strategic planning, a SWOT analysis can help any small business take its operations to the next level. SWOT stands for strengths, weaknesses, opportunities, and threats. Strengths and weaknesses tend to refer to internal qualities, whereas opportunities and threats are external. This type of analysis can be used to assess a variety of problems or procedures. Here are just 4 of those ways.

1. Analyzing the Market

A thorough market analysis is one of the most important things a small business can do. You need to understand the competition and the market viability before you’ll see your business soar. After understanding the history and context of your industry, figure out what makes you a strong competitor and what your pitfalls are. Maybe your prices are extremely competitive or your customer service increases customer loyalty, but your location doesn’t attract a lot of traffic. Opportunities when analyzing the market can include the development of a new housing facility nearby, and threats could always come in the form of new competitors entering the market or new advances making your products or services obsolete.

2. Testing New Products and Services

Whenever you consider adding a new product or service, you should conduct a SWOT analysis. You’ll want to investigate how likely it is that customers will purchase this new addition if it’s costly to the business, and what the right balance is. This analysis could also be paired with polling customers directly in order to enhance the opportunity or determine if the new product or service is more of a threat than an opportunity.

3. Understanding Your Operations

This type of analysis can be conducted internally so that you can gain a clearer understanding of how efficient your business is. Often, conducting an analysis can shed light on what’s working and what needs improvement, particularly if you involve people from various departments. Someone from human resources might see something that a salesperson does not, and if you’re a business owner, you’ll want to understand every facet of your company as best as you can.

4. Expanding Your Business

This is where the “opportunities” in SWOT come out in full force. If you’re looking to expand, you should conduct a SWOT analysis with a focus on the positives and negatives of the opportunity. You can also discuss what strengths make this viable and what weaknesses may hold you back before making a final decision. In the end, using this type of analysis regularly will help hone your strategic planning skills while keeping the big picture in mind.