By Rieva Lesonsky
Is it time to send in the SWOT team to help your small business? Not to be confused with SWAT, SWOT is a business growth tool in which you assess your company’s Strengths, Weaknesses, Opportunities and Threats. After all, if you want to succeed, you need to have a realistic idea of what’s working for—and against—you.
Recently, the CAN Capital inaugural Small Business Health Index survey polled small business owners to discover what they see as their biggest opportunities and threats in the coming year. Here’s what they found.
Small business owners are willing to invest in growth. Bouncing back from the recession years, almost one-third (31 percent) of small business owners say they plan to expand their marketing and advertising activities this year, or to try new forms of advertising and marketing such as online ads, email marketing, etc. In addition, more than one-fourth (26 percent) of small business owners say they will purchase equipment and/or invest in inventory in the next year.
This is a pretty big weakness: Many small business owners are behind the curve when it comes to mobile. More than four in 10 (41 percent) of respondents admit their business website isn’t yet optimized for all mobile devices. The study cites data that 88 percent of consumers who search for a local business on a mobile device will call or visit that business within 24 hours—underscoring the power of mobile-friendly websites to drive customers to your door.
Mobile use and/or online business reviews tied as the top consumer trend that small business owners (44 percent) believe will affect their businesses. Regarding online reviews, the study cites data showing that a half-star difference in a business’s Yelp rating translates to an increase of up to 19 percent in revenues. Online shopping came in second; 34 percent of small business owners 34 percent) say it will affect their businesses going forward.
Finding capital is far and away the biggest challenge small businesses face. Although 45 percent of small business owners expect they’ll need external capital in the next year, 65 percent say accessing working capital is very or extremely challenging. Forty percent have found success getting financing from friends and family, compared to just 27 percent who’ve gotten it from traditional lenders.
Other issues small business owners say are challenges include:
- Being able to offer competitive prices compared to big businesses (37 percent)
- Rising employment costs (34 percent)
- The Affordable Care Act (33 percent)
- Being able to offer competitive salaries/wages (31 percent)
- Being able to offer attractive health insurance/benefits package for employees (29 percent)
Does it sound like entrepreneurs face more hurdles than opportunities? Smart entrepreneurs find ways around the biggest challenges—and that starts by doing a SWOT analysis.