As an entrepreneur, there are many things you need to consider when launching a new business. Apart from researching the market and browsing the availability of the product or service you are hoping to promote, you also need to make sure that your business idea is feasible and that it can .stand the test of time. While you can never be 100 percent sure that your startup can survive, you need to build the right foundations to allow it to flourish.
Some of the things you need to do as an entrepreneur is getting to know the competition, choose a working business model and checking sustainability through supply and demand. At any given point SWOT analysis is considered to be the perfect tool that allows you to assess your businesses sustainability.
SWOT analysis, is a structured planning method that looks at strengths, weaknesses, opportunities and threats and it’s used to analyse the potential of a business venture. The method is used to help the decision-making process and test the viability of a business, project, or product. To help you understand how it works, this is what the four elements refer to:
Strengths – characteristics of the business or project that give it an advantage over others.
Weaknesses – characteristics that place the business or project at a disadvantage in relation to others.
Opportunities – elements that the business or project could use to its advantage.
Threats – elements in the environment that could be dangerous for the business or project.
SWOT analysis can be a big help to entrepreneurs wanting to enhance performance. Here’s how.
1. It helps form important policies
Because SWOT analysis can help you get a better perspective of the potential threats and opportunities a business faces, it gives you a chance to create robust strategies and policies in regards to how you want your company to operate. At this crucial point, you need to pay attention to the strengths and opportunities that arise and build on them.
Think about what can give you a competitive advantage in the market, as well as what you are trying to do with your business. Do you want to build a strong brand that transmits trust to consumers? Are you willing to offer excellent customer service or high-quality products at a lower price? Your business is what you make it.
2. It identifies potential barriers
Entrepreneurship is like being on a boat and getting constantly hit by waves. With every step you make towards improving your business, it’s guaranteed you are going to find another obstacle waiting for you. But, that’s why SWOT analysis comes in handy as it can help you foresee these barriers and be more prepared for them. Whereas weaknesses are elements that can be improved internally within an organisation, dangers and possible threats are forces outside of your control that your company needs to decide how to prepare for.
3. It helps you understand where you are at
SWOT analysis gives you the opportunity to figure out where you are in the process of developing your business. Whether you are just starting out or want to expand your business with the launch of a new product, it helps you develop a full awareness of your situation to figure out where your business is currently at and what moves you can make to succeed.
If you are hoping to start your own business and gain a competitive advantage in the market, you will have to use the SWOT analysis to simplify the decision-making process and point you in the right direction.
Have you used SWOT analysis in any area of your work or business? How did it help you succeed? Let me know in the comments section below…