Entrepreneurs - SWOT that plan!

There are many ways in which we can make decisions within business. Some decisions do not require much thought you get a gut instinct and make a decision. However for the aspiring entrepreneur this approach is likely to be daunting. When do you know if your gut instinct is right? Well you probably do not. Even the
most experienced entrepreneur wouldn't know for sure. However the experienced entrepreneur has one big advantage over the aspiring entrepreneur that is 'experience'.

Whether an entrepreneur has years of experience or is just at the beginning of their journey I would highly recommend using a SWOT analysis before making a business decision or pursuing an idea. This tool is particularly useful to the aspiring entrepreneur for a number of reasons. With the big reason being it brings objectivity to the decision making process. It is very easy as an aspiring entrepreneur to get excited and emotional over a potential business deal. There is a risk that  naivety and inexperience can take over. There can be a rush of blood and adrenaline and you are imaging that the potential business deal/ idea will be the most successful idea in the world. There is nothing wrong with thinking this - as long as it is supported by evidence and is realistic. You may find it useful to read my post "Curve that enthusiasm" which discussed how not to let your enthusiasm get the better of you as an aspiring entrepreneur.

Well, what is a SWOT analysis? It is a way of assessing the (s)trentgths and (w)eaknesses of the internal factors of the business or idea. Followed by the external (o)pportunities and (t)hreats that will also exist. I am a big advocate of SWOT analysis and would advice anyone who aspires to be an entrepreneur to use this tool first to evaluate ideas and potential opportunities. In a previous post "Fail to Prepare, Prepare to Fail" I discuss the importance of planning. The SWOT analysis is a simple tool which allows you to do this. If you have not completed a SWOT analysis before I would advice you to look at the potential opportunity with a friend or family member who you can trust and will be able to play devil's advocate.
If you have more than one idea or are considering multiple directions for your idea/ potential business but aren't sure which to go with this tool will allow you to objectively evaluate the strength of each idea. You can then pick the strongest, have the option to develop other ideas for the future and you may spot opportunities or gaps in the market you hadn't previously thought of.

To summarise why you should be using SWOT analysis as an entrepreneur:

• It provides structure and allows you to plan a step by step action plan.
• It helps to ensure decisions made are objective and well thought through.
• It helps to prevent decisions being made based on emotion.
• It allows you to identify possible opportunities for development.
• It allows you to be proactive and consider what customers will want/ need in the future.
• You can examine possible opportunities that the competition may have missed - which may also allow you to develop a uniques selling point.

If after reading this post you think you want to have a go at a SWOT analysis a free template can be found on bussinessballs website by following this link "SWOT analysis method and examples, with free SWOT template". You could practice on ideas or businesses that are already in place to get an idea of how to use the tool. For example you could use a SWOT analysis on a local takeaway or restaurant. What do you think their internal strengths and weaknesses are? What opportunities do they have and what are their threats?

Remember if you have an idea as an aspiring entrepreneur use a SWOT analysis it is a simple way to evaluate it and you may think of things you'd never previously imagined.