So, you may ask yourself, “Is a business plan really necessary?”. I would answer with a resounding “yes”, and here’s why. Ideas are a dime a dozen and don’t amount to much if you don’t have a solid business operation in place to make it happen. Building that solid business operation takes time, money and commitment. Your ability to do each one effectively will mean the difference between your ideas paying off, and having that idea be just a “remember when” moment for when you grow older.

Business plans ground you in the reality of the day-to-day, step-by-step operation of building your business and bringing your idea to fruition. A business plan can help you focus on simple fundamentals like showing up every day, returning phone calls, and presenting value to your customers. It may not encompass the fun or excitement of generating ideas, but it is a big MUST.

SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats) is a method of assessing a business, its resources, and its environment. The SWOT process centers on the internal strengths and weaknesses of your company, staff, and products/services. It also examines external opportunities and threats that may have an impact on your business, such as market and consumer trends, changes in technology, legislation, and financial issues.

A SWOT analysis allows you to identify your core activities and pinpoint what you do well, and why. It will also direct you towards where your greatest opportunities lie, while highlighting areas where changes need to be made in order to make the most of your business. When performing a SWOT analysis avoid making these common mistakes:

Maintaining too narrow of a focus

The large and obviously glaring issues will probably engage your attention, but you need to dig deeper and look at every aspect in your business no matter how small it may seem to you.

Neglecting input from others

Sometimes our perspective regarding our business may not be as objective as we need it to be. Seeking out the input of others provides us with valuable insight into things we may not have considered. Other people’s perspectives are always valuable to a SWOT analysis.

Performing an analysis only once

Your business is always changing, and hopefully, always growing. So, if your business is always evolving so should your strength, weaknesses, opportunities and threats. Therefore, you need to view your SWOT as a work-in-progress, returning to and “tweaking” it on a regular basis.

Reliance on as an “end-all” strategy

A SWOT analysis is just one segment of your overall business strategy. It is a useful guide, not a major decision-making tool. Be sure to keep it in perspective as it relates to the bigger picture.