Understanding the environment your business operates in is a key part of planning, and will allow you to discern the threats and opportunities associated with your area of business.
An external analysis looks at the wider business environment that affects your business.
An internal analysis looks at factors within your business such as your strengths and weaknesses.
Examining your internal and external analyses together gives you a complete picture of your current situation and the steps you can take to plan your marketing.
PESTLE external analysis
A PESTLE analysis helps you to identify the main external opportunities and threats in your market:
- Political changes such as trade agreements between countries
- Economic factors such as interest rates, exchange rates and consumer confidence
- Social factors such as changing attitudes and lifestyles, and the ageing population
- Technological factors such as new materials and growing use of the internet
- Environmental factors such as environmental law and impact on the environment
- Legal factors such as new and existing legislation
SWOT internal analysis
You also need to understand your own internal strengths and weaknesses.
A SWOT analysis combines external and internal analysis to summarise your Strengths, Weaknesses, Opportunities and Threats. For example, a new business may note the following:
- Strength: enthusiastic employees or a unique product
- Weakness: no existing customer base and limited finances
- Opportunity: potential customers with problem the product solves, interested investors
- Threat: competition from established businesses with a bigger budget
You need to look for opportunities that play to your strengths. You also need to decide what to do about threats to your business and how you can overcome important weaknesses.
For example, your SWOT analysis might help you identify the most promising customers to target. You might decide to look at ways of using the internet to reach customers. And you might start to investigate ways of raising additional investment to overcome your financial weakness.
To find out more about strategic analysis, see measure performance and set targets.
Invest NI's Business Direction Tutorial includes a chapter on how to use SWOT analysis to assess your business. See the video below:
Know your legal responsibilities
- Do you need a licence?
- Get the right business insurance
- Comply with the law when providing goods and services
- Know your customers' rights
- Distance and online selling rules
- Understand pricing legislation
- Buying goods from outside NI
- Selling goods outside NI
- GDPR compliance checklist
- Pay your business rates
- Understand staff contracts and your responsibilities
- Taking on contractors and subcontractors
- What you need to do about health and safety
- Know your legal obligations on pensions
Understand tax and VAT
Sell and market your products or services