Tue, October 15, 2019

What are SWOT’s?

No, I did not misspell SWAT. SWOT is a way of looking at a business from a few different points.

S for strengths
W for weaknesses
O for opportunities
T for threats

I assure you this sounds bigger than it is. I have known people who take days to fill out one of these, but that is NOT what we are doing here. We just want to see which of our ideas would work the best.

Let’s run through each of them real quick so you can know how to work with this very helpful business tool. First, let me explain two terms: Internal, means things that you have control over, like how much time you can put in. “External” are things that are out of your control, like politics, and labor laws.

STRENGTHS: These that are ‘internal’ or things you and your team brings to the business. Think of things like your abilities, and experience. What makes this idea better than anything anyone else it doing? It is unique? Maybe no one in your town is doing this. Maybe you found a better way to do something. Maybe you can do it faster or with a special style that is just your own. Let’s say you bake cakes. If you bake healthy brownies, “healthy’ ‘natural’ ‘green’ ‘chocolaty’ and words like that would be in the strength category. Don’t forget ‘tastes good’ and ‘cost the same as fatty brownies.’

WEAKNESS: These are ‘internal’ issues that may cause a problem. Some of these are things like ‘people may not take me serious as a teen’ ‘I don’t have enough money’ etc. These are not things that stop you from doing business; they are just opportunities that need to be overcome! It helps to list these now and figure out ways to overcome them later. Competition, skills limitations, office space, enough workers, shipping. . . this one can be big for now, but you just want to know what they are. Back to our baking brownies example, some of the weaknesses might be ‘expensive ingredients’ ‘need larger ovens’ ‘need to know how to bake’ ‘need to take out the other brownie company’ (JK, don’t do this!).

OPPORTUNITIES: These are ‘external’ things that will help you be successful. Things that fit in this category could be new markets, competitors loss of care, technology, tactics, etc. If we use our baking example, we would put things like ‘they just opened a health store in town’ ‘there are two new yoga classes at the rec center’ ‘there is a show on TV about eating healthy’ ‘they are talking about healthy eating in school’ and on and on.

THREATS: This category sounds harsh, but what could cause your business not to work. Things in this category include laws, politics, competitors, supply/demand, contracts, economy and even the weather. If I was baking those healthy brownies, I would put ‘need license to sell food’ ‘news about diseased eggs’ ‘local ingredients costlly’ and on and on.

TAKE ACTION: Take a piece of paper for your top three choices for a business (You can do as many as you like, but let’s use three for a good starting point.) Write “Positives” on one side of the paper and “Negatives” on the other side just under your business idea. Take about an hour to do all of these, work fast, like a brainstorming session. We just want you thinking ahead: we are not planning. Try to include a couple of friends to help or ask your parents. Just write down everything you can think of. We can put these in each of the categories later, but make sure you include internal and external items under each section.

This step is very important. It will help you weed out any businesses that may not work too well and you may be surprised which one looks like it would work the best for you.

Bonus tip: If you have a business mentor, he may help if he has time. Or better yet, type up your SWOT (in full format with all categories and items in each) and show it to him. He may have something to add to it. (You did find a mentor, right?!)

Here some helpful articles for this stage:
Sniffing out your purpose.
Using the ‘F’ word in business.
Presenting ideas on paper.

Leave us a comment about how SWOT’s helped the way you think about your business idea.

——- Read the “Getting Started On The Right Track” series ——-
1. Getting Started
2. Learn to dream
3. Find a mentor
4. SWOTS?
5. Develop a business Plan
6. SIP: Systems in PLace
7. Getting your marketing started
———————————————————————————-

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