How To Conduct a SWOT Analysis for Your Small Business
Updated: Jan 31
Many businesses start as passion projects, we feel a strong desire to make an impact on our world by having a business that supports what we love to do. Others are just tired of the corporate race and want to be “be their own boss”, they clearly see a better way to do business in a marketplace they are familiar with. Be it's a passion project or I can do this better project, when the rubber hits the road of your business ideas there are many real-world realities to be faced, some will hit right away, others will haunt you later on down the road.
All business startups face a similar set of speed bumps and sometimes walls that get in the way of success when they begin. They venture from the known and often secure reality of a steady job to embracing uncertainty and a giant learning curve of their start-up business venture. During the first 5 years, 50% of new businesses will fail and 66% will fail in the first 10 years. Many of these business failures can be traced back to a lack of accurate and detailed planning at the start of the life of the venture.
Here are 10 common reasons new businesses fail:
1. Starting for the Wrong Reasons
2. Insufficient Capital
3. Improper Planning
4. Poor Management
5. Failure to Market + Sell
6. Expand to Quickly
7. Lack of Differentiation
8. Unwilling to Delegate
9. Unprofitable Business Model
10. Not Knowing your Competition
One way to avoid many of the potential business pitfalls is to include an honest S.W.O.T. analysis as part of your business planning. This deep dive into the various categories of your business idea can provide amazing insights and an “unfiltered” view of the opportunity at hand. It can help guide current and future KEY decisions that could determine the success or failure of your business venture.
What do you bring to this business that is unique, do you have special knowledge or experience?
1. I have many years of experience in the field
2. I am hardworking and disciplined
3. I have unique skills and experience
Give three examples of your core strengths:
What are some of the things about you that might get in the way of your success?
1. I have never owned a business before, not sure what to expect
2. I do not have a lot of start-up capital
3. I do not have a lot of time as I have a very busy life
Give three examples of your potential weaknesses:
What is happening in the marketplace that provides an opening for your business idea?
1. Emerging trends
2. Save time or money
3. New Idea
Give three examples of your Opportunities:
What will jump up and stop your business from succeeding?
1. Limited knowledge
2. Lack of resources
Give three examples of Threats:
Take a good hard look at the top 10 reasons businesses fail, 66% percent in 10 years is not the best odds. Being brutally honest about the strengths and limitations of your business might take a bit of the shine off of your passion project, but at the same time, you give yourself the chance to start off your new venture on a solid footing!