You’re invited to take the SWOT analysis challenge—see if you can complete all five steps in five days or fewer! Then invite your network to do it too. Share this article on LinkedIn, Facebook, or Twitter and use the #SWOT hashtag.

If you’re looking for the rest of the steps in the SWOT analysis series, find them here:

• Step 1: Strengths
• Step 2: Weaknesses
• Step 3: Opportunities
• Step 4: Threats
• Step 5: Actionable strategies

Whether you’re new to the business world or a veteran, a SWOT analysis is a valuable tool to have in your toolbox. Doing a SWOT analysis is a well-rounded approach to evaluating your business, looking specifically at strengths, weaknesses, opportunities, and threats.

Looking at your SWOT weaknesses for business planning

There are some good reasons to include a SWOT analysis in your business planning process—funders will be interested in seeing your approach to handling the risks that you’ll face based on internal weaknesses.

You won’t get anywhere with pretending you don’t have any, so be honest with yourself about your company’s weaknesses. That’s a good first step to putting a plan in place to address them.

Looking at SWOT weaknesses as part of an ongoing strategic plan

If your business doesn’t need a business plan for a loan or because you’re seeking investment, don’t cross conducting a SWOT analysis off your list just yet.  

Many established companies include SWOT in their regular strategic planning. The end goal isn’t just documenting facts and information, it’s to use what you uncover to develop strategies for growth and mitigating risk.

The purpose of a SWOT analysis

Today you’re diving into the weaknesses of your business. Since cataloging your business’s weaknesses can be tough, we thought it was a good idea to recap why this analysis is important.

For existing businesses, a SWOT matrix will:

• Give you a new perspective about your business
• Provide valuable information about internal and external factors that can be used to make strategic decisions
• Allow you to assess the health of your business in real time
• Identify areas for improvement
• Give your team a chance to share insights and take a role in affecting business strategy
• Provide a framework for updating your strategic plan

For new businesses, a SWOT matrix will:

• Highlight the benefits of your proposed business
• Provide valuable information about internal and external factors that can be leveraged in your business plan
• Identify potential problems
• Encourage you to think critically about starting a business
• Provide valuable information that you’ll need to consider now and in the future

How to define your company’s weaknesses

Every owner wants to believe his or her business is running smoothly, so this element of the SWOT analysis might not be your favorite.

But, it’s vital. You need to truthfully assess your business’s weaknesses for this analysis to be a useful strategic tool.

Weaknesses are internal, threats are external

In a SWOT analysis, think of weaknesses are internal factors that take away from your business or leave you at a disadvantage. Resist the urge to list threats–or external risk factors. The same categories that applied to your strengths column from step 1 can be reapplied here.

So, your brainstorming session should include your team if you have one, or at least your business mentor or trusted business advisor.  

You can download the free SWOT matrix template here if you haven’t done so already.

You’ll start with brainstorming around the different aspects of your business.

Assess your business for weakness in the following areas:

• Financial resources: This includes revenue streams, investments, diversified income, and grants.
• Physical items: Consider the buildings and equipment that you rent or own.
• Intellectual property: Patents, copyrights, and trademarks fall into this area.
• Human resources: Think of your employees, volunteers, and mentors.
• Key players: Think of vital personnel to your business.
• Employee programs: Think of any programs that help your employees excel.
• Company workflow: This includes best work practices.
• Company culture: This is the environment that your employees work in.
• Company reputation: Think of how your business has grown its reputation.
• Market position: You’ll consider how your business fits in the overall market.
• Growth potential: Think of how your business is positioned for future growth.

Questions to ask to find your company’s weaknesses

Here are some questions that should help you identify weaknesses. They mirror the list of different aspects of your business that you’ll want to assess.

Keep in mind that some questions might not elicit a negative response. If that’s the case, just move on to the next question.

Starter questions:

• In what areas does your company struggle?
• Are there reasons that customers select competitors over you?
• Does something specific stop you from performing at your best?

Financial:

• Are financial resources holding you back? If so, how?
• Does your business get its revenue from one main stream? If so, is diversification a concern?
• How are you preparing for your financial future?

Physical:

• Are any of your physical assets creating a problem?
• What condition is your office in?
• What condition is your equipment in?

Intellectual property:

• Are any of your patents, trademarks, or copyrights in jeopardy?
• Is there any government red tape that’s keeping a patent from moving forward?
• Does your company take too long to file for patents, etc.?

Human resources:

• What kind of human resources do you have?
• Are there any departments that are lacking or inefficient?
• Are employee programs in place to improve your business? If so, are they working?

Company workflow:

• What areas could be improved upon when it comes to workflow?
• What slows you down? Is there too much red tape in certain areas?
• What are the areas where you’ve made mistakes in the last year or quarter?

Company culture:

• Are you happy with the company culture that you’ve created? If not, why?

Company reputation:

• How does the public see your company? Are you happy with that image?

Market position:

• What kind of position does your business hold in the marketplace?

Growth potential:

• What plans do you have for growth?
• Are your competitors growing in ways that you can’t?
• What keeps your business from growing?

Tips for gathering insight and information on your weaknesses

1. Be open-minded

As your employees suggest weaknesses, remain open-minded. It’s likely that an employee will bring up a weakness that you hadn’t thought of, or that you disagree with. When it happens, don’t be judgmental.

2. Be critical of your business

Now isn’t the time for rose-colored glasses—it’s the time for pure honesty. Be prepared to look at your business critically, both inside and out.

3. Remember, every business has weaknesses

When you’re finished talking about the negative aspects of your business, you might feel a bit deflated. Just remember, every business has weaknesses. Today is just part of a larger process that will help you better assess your business overall.

4. Keep your list of weaknesses handy

Keep your list in an accessible spot. You’ll analyze all of the data that you collect over the next few days at the end of the week.

In Step 5: Turn your SWOT into actionable strategies, you’ll combine everything you’ve learned, and think about which tactics or strategies you need to adjust to sustain growth and your overall business health.

For now, move on to Step 3: Identify Opportunities.

Editor’s note: This article was originally published in 2015. It was updated in 2019.