Have you ever had one of those days when you just weren’t sure if you were coming or going or in which direction you were headed? For all too many startups and small businesses, that’s their daily reality. They have a general idea of what type of business they’re building but they feel like there are so many needs and opportunities slipping through their fingers and they don’t have a firm grasp of where to go next.
As common as that feeling is, it doesn’t have to stick around. One way to get more direction in building your startup is by conducting a SWOT analysis.
What Is a SWOT Analysis?
No, I’m not talking about having brainstorming sessions while swatting flies. “SWOT” stands for “strengths, weaknesses, opportunities, and threats.” In other words, a SWOT analysis involves taking a professional inventory of those four things:
- What you’re good at
- What skills you’re lacking
- Your top opportunities for growth
- Threats and hurdles that could hold you back
This type of analysis is helpful because it’s looking at both internal factors and external factors that will (not “could,” will) impact your success. Strengths and weaknesses are internal factors while opportunities and threats are external.
A SWOT analysis can be incredibly helpful as a business analysis by looking at the overall business’s strengths, weaknesses, opportunities, and threats. A personal SWOT analysis can be helpful too, though, especially if you’re a solopreneur or freelancer. You’re analyzing the same four factors but within yourself specifically, not the business as a whole.
Benefits of a SWOT Analysis for Startups
Are SWOT analyses really worth business owners’ time? You bet your bottom dollar it is! In fact, it brings several helpful advantages.
Guide Team Growth
In startups, each person you hire will affect the business more than they would in any large corporation because they make up a larger percentage of your workforce. That means it’s more important for startups to find the right team members. That should start by analyzing the skills your business is lacking so you can find someone that fills in those gaps.
Determine Your Business Direction
Sometimes it’s tough simply knowing which direction to go with your business – you’re blinded by the possibilities. A SWOT analysis forces you to pause and determine which opportunities give you the greatest opportunities for growth and success. That business planning step should be a key part of developing your business strategy for the future.
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Find Your Place in the Industry
Chances are that you’re surrounded by competitors in the world. Where do you fit into the industry among all those competitors?
By evaluating your company’s strengths and weaknesses with a SWOT analysis, you can figure out what makes you unique and what competitive advantage you have over others. You can also discover ways you can improve to be more competitive. From there, just use strategic planning to find a way to work on your weaknesses and to put your advantage to good use and you’ll be on the fast track.
Identify Ways to Capitalize on Business Strengths
Every business has its strengths, including startups that feel like little fish in a gigantic pond full of sharks. Trust me, there’s always something you have that they don’t.
A SWOT analysis gives you the chance to not only figure out what those strengths are but to find opportunities to capitalize on them. Maybe your business is more adaptable than others and that will allow you to jump on a market segment that’s untouched. Whatever your strengths might be, a SWOT analysis can help you make the most of them.
Establish a Marketing Plan
Marketing is critical for every business, but to make the most of every dollar (which every startup needs to do), you need well-developed marketing plans first.
A SWOT analysis is the first step toward developing your marketing plan. “Strengths” tells you what features of the business to emphasize in your marketing while “opportunities” can determine the best audiences and platforms for your marketing content. From expanding on social media to identifying opportunities for growth within existing customer bases, a SWOT analysis uncovers enough information that it might as well be a treasure hunt.
Propelling Your Startup Forward with a SWOT Analysis
So much of growing a business comes down to learning about yourself and making use of what you have. That’s why a SWOT analysis is such an essential starting point for taking any business to the next level. It forces you to be truly introspective about yourself, your business, and your industry to find the best ways to move forward. Give it a shot – you may be surprised by what you find.