Definition of SWOT of Business Proposals

The SWOT analysis is a description of the strategic position of a business. It's generally the meat of a business proposal or the introduction of a more detailed business plan. It provides readers with a sense of context for the business being proposed, allowing them to better understand what's happening with that business.

Scope and Scale

The SWOT analysis describes a business at a strategic--rather than tactical--level for each of four key points. These descriptions take the broad stroke view and don't get bogged down in operational details.

Strengths

The "s" in SWOT stands for "strengths," the advantages the business has in its community and especially over the competition. A strength for a corner deli might be that it's the only lunch counter in the neighborhood that has a liquor license. A strength for a martial arts school might be strong ties with the local school district.

Weaknesses

The "w" in SWOT stands for "weaknesses." This section describes the areas of the business that could stand improvement. For example, a corner deli might include an above-average lease cost as a weakness.

Opportunities

The "o" in SWOT stands for "opportunities," places where the business can improve, grow or expand. An opportunity for the corner deli might be a growing popularity in the community for live music. An opportunity for a karate school could be a fitness club opening nearby for whom the school could provide lessons. The opportunity section often includes plans to capitalize on the previously described strengths or to mitigate the identified weaknesses.

Threats

The "t" in SWOT stands for "threats," which are emerging situations that might challenge the business. A threat to the corner deli example could be news that a national sandwich chain is opening a block down the road. A threat to a martial arts school could be impending legislation that taxes fitness clubs.

Place in a Business Proposal

The SWOT analysis gives potential partners and investors a solid overview of the business they're being asked to get involved in. It does not stand alone as a business proposal. Rather, potential investors will read it prior to meeting with the business managers in order to prepare for a detailed discussion of the business. The SWOT analysis may or may not accompany other documents, such as a profit and loss statement or business plan.

Getting One Done

A competent business manager should be able to rattle off a bullet point version of his company's SWOT situation on demand and thus can create a SWOT analysis at any time. However, the quality of a SWOT analysis is often judged through the lens of the quality of its writing. If seeking investment capital, it's best to get a professional writer to compose your SWOT paper.

References

• "Small Business for Dummies"; Eric Tyson, 2007