ESYB2 050 - SWOT Analysis
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[00:00:00] Now let's discuss something called SWOT analysis. SWOT is an acronym and I'll go over it in a second. It's really something you do during the business planning or business analysis phase. And SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. And that gives you a holistic look at your business.

Let's go through them one by one. First are strengths. And different businesses can have different strengths. And consider which ones are strengths for you. Maybe you have certain experience in your field, certain types of skills, maybe design, maybe programming, maybe marketing. Extra productivity skills, some skills that really set you apart and give you an advantage over your competitors.

Maybe you have access to resources like some software or some machinery or some tools that others maybe don't have. Maybe you have some insight or an interesting way to differentiate yourself. Maybe you have money that other people don't have. Those can be potential strengths that can give you an immediate advantage in a [00:01:00] certain business idea.

On the other hand, you might have weaknesses. They are actually quite opposite of each other. A strength can be having funding, a weakness can be having no funding and a weakness can be having a small team whereas a strength can be having. A lot of skills on your team and a weakness can be lack of resources like time and money, things like that.

And ironically, or interestingly, when you're starting out, most of these, their weaknesses, people have small teams, little money, little resources, but as they choose maybe their little niche and they grow into that little niche and they start generating money, they maybe get some people working with them, they acquire resources and they become stronger and stronger.

And those weaknesses slowly turn into strengths. Well then, Oh, You can begin to hire, you have more experience, and so over time your weaknesses can turn into strengths. But if you have too many weaknesses in the beginning, it might be just quite damaging to your business, and it might be hard to grow. Now, to create [00:02:00] a path for your business, for your weaknesses to become strengths, you need to see what are the opportunities to explore.

Maybe you're approaching some big market, but there's a market sub segment that Is underserved and maybe there's opportunity to get into that some specific niche. Maybe you have some competitor that is weak at the moment, or maybe they're distracted, or maybe something's happening to the competitor and you can take their customers.

So that way, if you have an opportunity, you can start of course, with some weaknesses, but then quickly turn them into strength and grow into a bigger business. And you always want to look out for potential threats to your business. Threats can be. If your competitors are strong, or if there are many of them, if there are some economic downturns coming up, if you are in a declining market, for example, like in the nineties, the newspaper market, that decline, if you have customers who don't pay readily, right?

They're sometimes referred to as low end customers [00:03:00] or a low end market. I don't like that term low end, but that's the term, or maybe you are actually targeting it. too tiny of a niche because you do have to choose your niche carefully. If you target it too tiny, there's very little money to be made. If you target too big, it's hard to promote.

So that's where you evaluate all of this holistically. It gives you a sense of is some business idea viable or are there too many weaknesses? Are there not enough opportunities? Are there too many threats? Or is it opposite? Is there not that many threats and a lot of opportunities and it's going to be easy to turn weaknesses into strength or weaknesses won't hinder you that much.

So this is something you need to do during business planning and every once in a while when your business is up and running, when you're analyzing how to move forward.

