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How many businesses start operations without a plan? Certainly, most businesses will have an idea of what type of product or service to provide, which is obviously important. From there the new business owner will then decide on a price and a distribution method for the new product or service to be provided. Once these decisions have been made the new business is born and the company is moving in a direction. In the end though the direction of the business is not clear and the strategy is non-existent. Although some businesses are able to fumble through life without a plan and earning reasonable revenues, too many businesses fail within the first year, while many will close doors in the second year.

In order to limit your chances of failure in the first or second year or as the business progresses later in life, you should approach business with a plan. Specifically a business plan is an ideal tool to determine the feasibility of a business. One of the primary tools associated with a business is a SWOT analysis. SWOT stands for Strengths, Weaknesses, Opportunities, and Threats.
The first part of a SWOT analysis is the determination of strengths. Strengths are features of your business, product, or service that provides benefit to your organization. Strengths should be approach from the position of what factors provide an advantage over other companies, products or services. What does our company do better than our competitors? When looking at your strengths, you should approach it from two different directions. First, you should look internally at what you feel are the strengths of the organization. Then you should look inwardly at the organization, as if you were a competitor to try to determine how other companies perceive you.
It is often much harder to analyze the second factor, weaknesses, than it usually is to determine strengths. The first thing to keep in mind when working on weaknesses is to be honest with ones self. Some factors to consider are what could you do to improve your product, service, organization, and industry in general. It will do you no good to come up with a flimsy list of weaknesses that have no real relevance or weight. If you can honestly look into your organization and come up with a hard analysis of your organization you will find that is much more helpful and will be an excellent guide to you in the future.
The third factor of opportunities actually is outward looking in nature. The idea is to

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