Why you should conduct a SWOT analysis of your farm

farmer with tablet

A SWOT Analysis is an opportunity to analyze the Strengths, Weaknesses, Opportunities and Threats associated with your dairy farm business. It is a simple, yet useful exercise that forces you to reflect about how you can maintain and improve performance. 

Strengths and weaknesses

The first two sections of the SWOT analysis usually examine the internal workings of your farm business. These items are usually within the control of the business owners. One example could be future management of the business. Is there a next generation owner/manager who has the interest in the business and the ability to manage the complexities of the business? Another example could be the financial position of the business. Does the farm business have too much debt held as short-term? Here are some sample questions that can be asked to assist in determining your business’s strengths and weaknesses:


  What strengths does your business have that make you competitive? Examples might include family, labor, machinery, farm size, production capacity, etc. 

  What do you do better than anyone else? Are you a better marketer? Are you a well-respected employer? Are you able to complete planting and harvesting duties efficiently? Do you achieve maximum milk production at a profitable level? 


  What could you improve? What is holding you back? What little changes might make big impacts? 

  What should you avoid? Have you completed a financial analysis of your business to evaluate enterprises? 

Opportunities and threats

The second part of the SWOT analysis requires you to look outside your business at issues that you cannot control but can manage to enhance or reduce their impact on your business. An example for a livestock producer could be the development of the neighboring farm into single-family housing units. Here are some sample questions that can be asked to assist in determining opportunities and threats to your business:


  What trends are facing your business? Will you have to increase in size to remain competitive or can you remain at your present size?

  Is there an unmet need upon which you can capitalize? 


  What obstacles do you face?

  What is your competition doing?

  Do changes in technology threaten your business? 

  Does your financial position threaten your business? 

  Could any particular weakness seriously threaten your farm? 

Who to involve

The people most directly involved with the business should participate in a SWOT analysis. This would include family members employed in the business and hired employees. Input from outside advisors, such as your attorney, banker, extension educator or accountant, may also be helpful as they may see your farm from a different perspective.

How to complete a SWOT analysis. The SWOT analysis is not something you do one time and place on a shelf to collect dust. At least once a year, complete a new analysis. You may find little change has occurred, but it is still a good idea to review achievements, measure production efficiencies, and evaluate alternatives. The process should help you identify areas where your strengths and opportunities align with a high probability of success. 

Conversely, you will also identify combinations of weaknesses and threats. Your strategic plan should avoid these areas or at least provide for methods to minimize their effects on your farm business. 

Nothing fancy is required to complete a SWOT analysis. Simply taking a sheet of paper and draw two lines (one vertical and one horizontal) to form four equal quadrants and label the quadrants Strengths, Weaknesses, Threats, Opportunities, starting in the top left and going clockwise.

Completing a SWOT analysis is an excellent exercise in determining the strengths, weaknesses, opportunities, and threats related to your farm business. I encourage you to complete this process with your family members, employees, and trusted advisors. Reach out to your local extension professional to help you work through the process.


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