SWOT Analysis for Small Businesses
OK...Maybe the picture was a little misleading
. The S.W.O.T. that we will discuss today actually refers to your businesses Strengths, Weaknesses, Opportunities, and Threats. Those of you who with formal business backgrounds are probably very familiar with this term. Everybody else, don't worry, its a piece of cake.
The SWOT Analysis is one of the most fundamental parts of your business plan. It's one of the first things that need to be done when planning to open your business. No matter what kind of business you plan to open, it is very beneficial to do a SWOT Analysis.
. The S.W.O.T. that we will discuss today actually refers to your businesses Strengths, Weaknesses, Opportunities, and Threats. Those of you who with formal business backgrounds are probably very familiar with this term. Everybody else, don't worry, its a piece of cake.The SWOT Analysis is one of the most fundamental parts of your business plan. It's one of the first things that need to be done when planning to open your business. No matter what kind of business you plan to open, it is very beneficial to do a SWOT Analysis.
IS IT REALLY NECESSARY?
If your analysis is done correctly it will usually give you an accurate assessment of your chances for success in a particular market. A lot of business owners completely skip this step because it is not a "required" section of a business plan. In any entrepreneur guide, you will find the Executive Summary, Vision, Mission, etc... as the necessary parts of the business plan but rarely do they include the SWOT analysis as a required piece.
Well, I am here to tell you that the S.W.O.T. Analysis is absolutely necessary. The SWOT analysis will usually alert you to potential problems with your business before it even starts. It may also help you to see where your niche could be tweaked a little to ensure success.
Well, I am here to tell you that the S.W.O.T. Analysis is absolutely necessary. The SWOT analysis will usually alert you to potential problems with your business before it even starts. It may also help you to see where your niche could be tweaked a little to ensure success.
WHY IS IT SO NECESSARY?
As a lender, I wouldn't loan you a dime until I was sure that you knew exactly what you were getting into and what your chances for success were. Remember that 50% of new businesses close within the first year. "Why", you ask? Because they failed to properly research their market and did not know what they were getting into.
A lot of times, failure can be avoided if the proper research had been done. So before you start your business, whether its a blog, website, lawn service, daycare, etc.., be sure that you have properly analyzed your market with a SWOT Analysis. You may change your mind before you even get started.
HOW TO DO IT?
So how do you do a SWOT Analysis? Well, its extremely simple once you understand the different sections of it. The four sections are as follows:
1) Strengths
2) Weaknesses
3) Opportunities
4) Threats
They are all pretty self explanatory. For each section you will just want to consider how your business compares to others in your market in terms of product, price, location, funding, & niche.
So how do you do a SWOT Analysis? Well, its extremely simple once you understand the different sections of it. The four sections are as follows:
1) Strengths
2) Weaknesses
3) Opportunities
4) Threats
They are all pretty self explanatory. For each section you will just want to consider how your business compares to others in your market in terms of product, price, location, funding, & niche.
You will also want to consider how the saturation of your market effects your business for each section of your analysis. Some things to remember:
1) SWOT analysis should be written in paragraph form
2) Illustrations are beneficial to your analysis(Graphs, etc...)
3) The "Opportunities" section should identify some ways in which your business can advance in the market
1) SWOT analysis should be written in paragraph form
2) Illustrations are beneficial to your analysis(Graphs, etc...)
3) The "Opportunities" section should identify some ways in which your business can advance in the market
MAKE SURE THAT IT STANDS
Take your time and really put some thought into each section of your analysis. There's nothing worse than meeting with investors who can immediately identify weaknesses of your business that you have not justified with your analysis.
After your SWOT Analysis is done, you should have a realistic picture of your chances of successfully entering that market. Don't be afraid to show your analysis to friends and family. They may be able to identify some factors that you have overlooked. Better them than a potential stakeholder!
Lastly, analyze your data with an unbiased eye. It's better to save your time and resources for projects that can actually work rather than wasting them one's that you love but have no chance of being successful. If you do this, you will eventually find the project that will change your life.
If you don't, you'll waste all your time and money, and never get to the project that should have been your ticket. So SWOT your business and see if it can still stand. Leave your comments...
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