A process in helping small business owners make decisions.

1. Special Report
S.W.O.T. Analysis
for the
Small Business Owner
Looking under the rug
and behind the curtains!!
Feb 2010

2. This Special Report was developed for the Small Business owners to give them a tool to assist
them in evaluating their business, making a major business decision, or hiring a key person. It is
relatively simple to use and can be very helpful.
I firmly believe that business owners need to step back and look at their company or department
on an annual basis in order to better manage, develop a new, or alter the direction of the
business. It is not the end all, but it is an inexpensive tool that will help the small business
owner.
About the Author
Thomas Martucci has been in his own business since he was 28 years old. He has built three of
his own companies and assisted in starting two others. His own companies have been built to in
excess of $10 million dollars in revenue and have worked with more than 20 employees.
His company, Martco Associates, works within a small niche of small companies that are either
start ups or have sales less than $10 million and less than 20 employees. Martco’s philosophy is
simple and direct. You can’t help small business owners accomplish their goals and objectives if
you have not walked in their shoes.
Note
You may reprint any item from this Special Report in your own print newsletter, blog, ezine or
on your website as long as you reproduce the report in its entirety. You are welcome to pass this
report on to your customers, friends and associates.
I strongly suggest that you make copies for your associates who are going to work with you on
the S.W.O.T. Analysis of your company.
To subscribe to Martco Biz Bits and Blog visit http://www.martcoassociates.com
Copyright 2009, Martco Associates a division of Jancris International

3. S.W.O.T. Analysis for the Small Business Owner
Looking under the rug and behind the curtains!!
Do you think and analyze your major decisions before enacting them? Do you step back and
evaluate your business yearly? Do you review your key employees? So many small business
owners and midsize business owners use the “knee-jerk” rule or the “gut” rule in making major
decisions. Many times they are correct, but it may be costly when they are incorrect. I
sometimes over analyze, but I do not procrastinate in doing things. However, about 90% of the
time major decisions do not have to be made on the spot. One of the tools that have helped me in
many decisions throughout my career is the S.W.O.T Analysis. In the name of full disclosure I
was first drawn to it by the name S.W.O.T. I had it confused with SWAT. Nevertheless, I
started to read and understand the process and have used it many times as a tool in a variety of
projects, major decisions and with individuals that have worked with me.
About S.W.O.T. Analysis
S.W.O.T. is an acronym for Strengths, Weaknesses, Opportunities and Threats. S.W.O.T.
Analysis is a strategic planning method used to evaluate the Strengths, Weaknesses,
Opportunities, and Threats involved in a project, plan or a position by identifying the internal
and external factors that are favorable and unfavorable. The analysis is built on Scientific and
Psychological principles and techniques which were deployed and tested over many years. It is
credited to Albert Humphrey, at Stanford University in the 1960s and 1970s using data from
Fortune 500 companies.
In general, strengths and weaknesses relate to internal factors dealing with core competences and
resources that are under your control. Opportunities and Threats relate to external factors outside
of your immediate control.
I have used the S.W.O.T. technique as a benchmark in a variety of areas: making major business
decisions like adding a partner, entering new markets, developing new products, recommending
a strategy for a client, understanding a company’s operation, purchasing a new business,
developing business and marketing plans and hiring key personnel. In a business context, it can
often offer valuable guidance and insight. This report is targeted towards an annual review of
the company which I firmly believe needs to be done regardless of the business.
Using S.W.O.T. Analysis has been an extremely popular planning tool with businesses for the
following reasons:
1. It is not an easy task. However, performing a S.W.O.T. Analysis does not require
any special training, software, or skills. The only requirement is being truly
honest about your own operation.

4. 2. Most managers and workers have expertise in areas that are not known by other
members of the group. Organizing the expertise in a S.W.O.T. Analysis helps in
making informed decisions and provides better results.
3. A S.W.O.T. Analysis provides a brief but complete summary of the operation.
While the finished results are important, the process of building a S.W.O.T.
Analysis is almost as valuable.
4. Often times when a S.W.O.T. Analysis is performed, all people involved with the
operation become more aware of the performance and goals of the operation.
5. Completing a S.W.O.T. Analysis allows you to immediately see where you can
take action to improve your weak areas, capitalize on your strengths and
opportunities, and defend against threats.
A good way to think of a S.W.O.T. Analysis is a comprehensive strategic planning tool used to
bring focus and clarity to an individual, team or organization before an important decision is
made. It helps you to see behind the curtain and underneath the rug to see what’s really there.
Again, experiment with it. If it helps you to focus your (and your team’s) efforts in the right
direction, it’s worth it. It’s another tool that can help the small business owner.
How to do a S.W.O.T. Analysis
You will need to explain to the people in your company before you start that you are going to do
this analysis, and they need to understand what it is and why it is being done. Give them a few
days to research. It might be beneficial for you to hand out this special report to each person.
A S.W.O.T. Analysis has no set guidelines for completing the analysis. Users of the final
analysis should be comfortable with the format and should understand the results. For the
analysis to be most effective, it must be carried out fairly and thoroughly. This will then put the
management in a position to accurately forecast and prepare for the future to meet the objectives
and goals.
You will need to identify the objectives. Is it a new product or service you want to offer? Is it
buying another business? Is it an annual self evaluation of your company, or is it to hire a key
management person? Regardless, the objective has to be clear and defined.
The process is to ask and answer a number of specific questions for each of the four categories.
This process, in itself, is simple enough. However, so that you are not disappointed with the
outcome, take the time you need, get the answers you need, face the facts and then take action.

5. The objective of the analysis should always be to place the business in a position where the
small business owner and managers can determine a strategy for the future to improve its overall
performance or maintain it if the final results are favorable.
An objective may be to summarize the current state of the company and help devise a plan for
the future.
Strengths
The first element of a S.W.O.T. Analysis describes the strengths of an operation and is an
internal element. These strengths include what operations are done well and should be
viewed from both your point of view as well as the point of view of people within your
organization. In some cases, an organization’s strengths are very obvious i.e., being a low
cost producer or producing high quality products. To get the thought processes working, we
have listed some questions to think about and throw on the table if applicable.
1. Identify skills and capabilities that you and your personnel have.
2. What can you do particularly well, relative to your competitors?
3. What does your team, customers, clients consider to be your strengths?
4. Is your brand or reputation strong? What does your company or department do well
(production, marketing, etc)?
5. What are the major sources of your operation’s revenue and profit?
6. What is the market share of your organization?
7. Is your marketing/advertising effective?
8. Why did you decide to start your operation?
9. What were the motivating factors and influences?
10. Do these factors still represent some of your strengths?
11. Why do your customers buy from you?
12. What differentiates your company in the market?
13. What have been your most notable achievements?

6. 14. What relevant resources do you have?
15. Is the morale of your employees high?
16. Are there incentives in place to reward your employees for good work?
17. Does your operation manage its inventories efficiently?
18. To what do you attribute your success?
19. How do you measure success?
Weaknesses
The second element of the S.W.O.T. Analysis describes the weaknesses of your company.
Examining weaknesses includes identifying what a company or department does not do well.
As with the strengths, weaknesses should be examined from both your perspective and from
the perspective of those outside your operation. It is also possible for weaknesses to be
obvious, such as a limitation of resources or a lack of teamwork. All companies or
departments, regardless of size or profitability have weaknesses. How badly these
weaknesses will affect the company should be left to further analysis.
To get this thought process working, we have listed a few questions to start with. You need
to explain to all participates and yourself that you need to be brutally honest.
1. What do your competitors do better than you?
2. What department or phase of your company is done poorly?
3. What generates the most customer dissatisfaction and complaints?
4. What generates the most employee dissatisfaction and complaints?
5. What processes and activities can you improve?
6. What does your company or department not do well (production, marketing, etc)?
7. What do others see as your weaknesses (production, marketing, etc)?
8. What are the least profitable products and or services?
9. What is the market share of your organization?
10. Is your marketing/advertising effective?

7. 11. Is the company or department “wandering”?
12. What is the biggest expense of the operation?
13. Will the company be able to stand price decreases?
14. Why do customers not buy from you?
15. What relevant resources do you need?
16. Do your employees perform at their best?
17. Are there incentives in place to reward your employees for good work?
18. Does your operation manage its inventories efficiently?
Opportunities
The first external element of the S.W.O.T. Analysis is opportunities. The opportunities
include any favorable situation in the business’s environment that the operation may realize
gains from. These could range from diversification and the use of new technologies to
market trends and relationship developments. It is important to note that all operations have
some opportunities. Identifying these opportunities is a key sign of creative thinking.
1. Where can you apply your strengths?
2. How are your customers and their needs changing?
3. How is technology changing your business?
4. Are there new markets? (foreign)
5. Are there new or better ways of producing your products?
6. Are your direct competitor’s customers dissatisfied?
7. What new technologies are available that you can use to lower costs?
8. What market trends are you observing?
9. What new relationships could you develop?
10. Are there new business strategies that you could use in the company or department?

8. 11. Can quality of operations, products, and inventory management be improved without
incurring serious costs?
12. Can you create a competitive edge over your competitors?
13. Is there an opportunity to demand better prices from suppliers?
14. Is there an opportunity to receive higher prices for production?
15. Can profitability be increased through the production of other commodities?
16. Can the company get more predictable cash flows? If yes, how?
17. What can you do that you are not currently doing to improve the company or
department?
18. What new governmental policies or programs are available to you?
Threats
The final element of the S.W.O.T. Analysis is the external threats that the company or
department faces. Regardless of size or profitability, all companies face threats. These
threats could range from lower international prices to key relationships that are not going
well. Whatever the threat, the company should have a plan in place to overcome the threats
1. Are your customers able to meet their needs with alternative products?
2. Are your customers needs changing away from your product?
3. What are your competitors developing?
4. Are your rivals improving their product offerings or prices?
5. Is new technology making your product obsolete?
6. Are your employees satisfied? Is turnover high?
7. Is new competition coming?
8. Have there been any significant changes in the industry in which you operate?
9. What obstacles does the company face?

9. 10. What is your competition doing?
11. Are there any, or do you anticipate new competitors in your market?
12. Are there any new regulations in your industry making it difficult to be profitable?
13. Is changing technology threatening your profitability?
14. Is the company keeping up with technological changes?
15. Have margins been depressed?
16. Are international competitors taking market share?
17. What other changes in the market could damage the profitability of the company?
18. Do you have bad debt or cash-flow problems?
19. Are employees adequately trained and motivated?
20. Is the operation producing too many different commodities?
21. Could any of your weaknesses seriously threaten your operation?
Conclusions
Completing a S.W.O.T. Analysis will help you to evaluate the current position of your
company. It helps in determining future plans by identifying strengths and opportunities that
can be used by the operation and pointing out weaknesses and threats that should be
managed.
Now, prioritize the plans, develop an action plan, and set up milestones and benchmarks to
ensure the plans are implemented. While not all plans will ultimately be implemented,
completing a S.W.O.T. Analysis can ensure all current and potential plans of the company
are considered.