You’ve had a good idea – or at least you think you have – you need to quickly work out whether or not it’s viable… How does one know the workable idea?
Don’t ever start any business with money ~ Tomisin Ajiboye
It’s a bit early for you to splurge on an expensive market research survey or to start negotiating with investors over how much you’ll need to get started on a business. It’s probably even too soon to put together a comprehensive business plan.
What you need is a simple, clear, snapshot insight into what you can deliver and whether the marketplace will be receptive to your offering. You need to conduct a SWOT (Strength, Weakness, Opportunities, Threats) analysis. Okay, I know you may have heard about this tool a long time ago, but have you ever used it in the right manner? Creativity occurs when you swing into action about what you have heard or what drops into your mind. I will try to make it simple and interesting for you to use. Just follow through with the simple questions and make sure you are sincere with your answers.
A SWOT analysis is a quick way of examining a business’s viability by analyzing its internal strengths and weaknesses and matching these to its external opportunities and threats. I remembered the words of a wise man:
“if you know the weakness of your enemy and yours very well, you are far ahead into winning the war” ~ Bill Newman
Collecting these facts and ideas into one place enables you to see the bigger picture at a glance. Oh yes, I have used it for many clients at different situations and it has proved helpful. Very Helpful.
Now let us see how it’s been done…
Basically, you take a sheet of paper and draw a vertical line intersected in the middle by a horizontal line, creating four quadrants.
In the top-left quarter, fill in all the strengths of both your business idea and yourself (or workforce). Spell them out clearly and honestly. Typical questions you should be answering are:
- What are you best at?
- What’s your unique selling point?
- What differentiates you from potential competitors?
- Are you strong on customer service?
- Do you have exclusivity of a product line?
- Have you got access to a skilled and innovative workforce?
- Is your operation adaptable?
If the answer to any of these are “no”, then you should transfer that information into the next section – weaknesses. Means they all answer to your weakness.
In the top-right quadrant, fill in all your weaknesses or areas in which your business may be exposed. Be honest. It’s better to face the bad news now rather than see the business fall flat at a later date. Answer these additional types of questions:
- Will you or your workforce be inadequately skilled?
- Are your resources sufficient?
- Is the revenue stream too limited?
- Will you be able to provide strong leadership?
These are essentially macro environmental issues that surround and affect your company, product and position. In the bottom-left quadrant, identify areas such as:
- What opportunities exist for you?
- When you look at the state of the current market, what do you see?
- What niches have you spotted that your rivals have missed?
- Where are the gaps that you are proposing to fill?
- Is the market growing and is it broad enough for a new entrant?
- Do you anticipate a positive shift in taxation/demand/the economy/product supply?
In the final quadrant, list those factors which may threaten the success of your enterprise.
- Are rivals moving into your market space?
- Are products soon to become obsolete?
- Is the opportunity finite?
- Are you based in an unsuitable part of the country?
- Is there a danger your customers could bypass you and go direct to your suppliers?
- Could new competitors enter your market?
Hey, you now see how simple it is.
Now that you have defined your SWOT profile, you’re in a much stronger position to take an overview of your proposition. Weigh up all the pros and cons of starting up a new enterprise and then take your decision as to whether you intend to proceed.
If the business still strikes you as a viable proposition, then it’s time to put together a detailed business plan and get the ball rolling. If you decide it doesn’t look good on paper any more, you may wish to change your proposition and target a different segment of the market. You can’t come out twice, it is just once and, you cannot afford it not to be massive; therefore you cannot base your ideas on emotions and intuition only. It is good to confirm your emotion and intuition.
Once your business is launched you should return to your SWOT analysis regularly, and you should include a SWOT analysis in your marketing plan.
It will help you understand the position you are in now, help you identify what you should be doing to make the most of the opportunities available to you and how you can start playing to your strengths.
If there was a way you did it differently and it worked for you, kindly share it with us, so we could learn from you. I am always excited about new lessons.
Make it happen!