Are you good at planning and telling others what your strengths and weaknesses are? Have you sat down and worked out how your small business is going to work and made a plan for yourself? Ever heard of a SWOT analysis? This is how it could help you.
No it’s not about someone who was really clever and nerdy at school. This SWOT is an acronym which stands for Strengths, Weaknesses, Opportunities and Threats. Basically, it is a model which is used as a tool for analysing all the above elements before you set off on a new venture. It’s used in education as a method for identifying development areas, in project management and lots of environments and can be easily adapted to any decision-making situation.
It is a way of taking a business objective and identifying the internal and external factors which are likely pose an opportunity or a threat to your business and it was first used in the 1960s. You can take the SWOT analysis even further and use the match or convert process where you look in more detail at how strengths and opportunities can be linked and also at how weaknesses and threats can be converted.
OK so as a beginners’ guide, take a piece of paper and draw a cross or plus sign through the middle (+). You now have four segments on your piece of paper. Write S in one of the segments, W in another and so on. Once the artistic bit is done, now you can actually start to fill the segments with something meaningful.
The S and the W speak for themselves so write down all the things that you think are your business’s strengths and weaknesses. Now look at the threats and opportunities. S and O are likely to derive from internal situations and W and T are more likely to come from external forces. If your SWOT analysis then tells you that your business venture or objective is not going to work, you need to find another idea and repeat the whole process. If you can’t minimise the threats and overturn the weaknesses, meaning that they outweigh the strengths and opportunities, then it is advisable not to go ahead.
Essentially, what you are doing is assessing a business situation and planning ahead. Marketers use it all the time, or other methods which are similar. You can use the analysis as a foundation on which to build further and it can be used to assess competitive advantages and so on. It should form the first part of the planning process for any start-up or small business.
So what are you waiting for? You want to set up your own business and you can do it just like anyone else. Don’t forget that it is worth concentrating on weaknesses and threats because they can be overturned and converted into great selling points. Don’t overlook them or you may miss out on an opportunity in reverse.