Let’s start at the beginning. What does SWOT even stand for? Why should one use a SWOT analysis in the first place? Well, SWOT stands for: strengths, weaknesses, opportunities and threats. If you have decided to start up your own business and need somewhere to start, a SWOT analysis is just what you need to do. This is the beginning of a business plan. Each of these categories helps you to hone in on who your company is, what you have to offer, where you could go, etc. Let me take you through a SWOT analysis and show you how easy and beneficial one can be for your startup company.
First things first. There are some rules you need to follow in order to get the most out of your SWOT analysis.
1. Be honest. Don’t leave out little details just to make yourself feel better, that isn’t helping your company to grow and be successful.
2. Be specific. Avoid grey areas. No one knows your company better than you, so get down to the nitty gritty.
3. Don’t restrict yourself to only what is listed here. This is just a starting place. Consider other questions or topics not listed that are more specific to your business.
STRENGTHS and WEAKNESSES
The strengths and weaknesses portions of a SWOT analysis go hand in hand. The idea is that you want to turn your weaknesses into strengths. These two sections are known as the “internal factors”. Meaning these are the things YOU control. Here are some things to consider:
Products/Services: What makes your products or services unique from others in that market? Could you make it better than it already is? Have you perfected your skill or service?
Marketing: What is your marketing plan? Are you utilizing all opportunities that you can at this time?
Branding: Is your brand consistent with your product or service? Is it clear on what you offer? Does it reflect you? Is it modern and eye catching?
Finances: How are your sales? Are you making or losing money? Are your prices competitive?
Location: Where are you located? Are you in a big city that looks for your product or service? Are you in the wrong area for your product or service?
Clients: How do your clients view you? Do you need to work on your customer service?
OPPORTUNITIES and THREATS
Just as strengths and weaknesses are connected, opportunities and threats are as well. These are the “external factors”, the things that you can’t truly control but are still affecting your business. The most significant of these things are your competitors. You want to understand how your competitor is perceived versus how you are perceived in the marketplace. What’s the differences between your business plans? Research them, because they are out there. When thinking about those competitors, consider these questions:
Who is your biggest competitor? Who are your local competitors?
What are they doing that WORKS, that you are not doing? If you cannot compete with their strengths, what is something that you can do differently that they do not do?
What variety of products or services are they offering? Can you figure out a way to find your own niche that they are not doing? How can you distinguish yourself from them?
How much are they marketing their brand? Can you do more? What mediums are they not utilizing that you can get into?
How is their customer service? Are they offering free shipping? Do they have reviews?
Could you possibly collaborate with some other brands? What brands that are tending could use your services and/or products?
What technology could you be using to help your company? Most all sources of technology can be useful for any business; could you learn to use them?
Now that you have completed your SWOT analysis you should have a good idea of where your company stands. Take a good look at where you are now and think about where you want to be. You should expand on your strengths and opportunities and mitigate your weaknesses and threats.