When young students start talking to their counselors about what career options to pursue, the counselors usually ask “What are you good at?” They want to know what strengths the teen has so they can suggest a future that aligns with those strengths. A SWOT analysis that is used correctly helps a startup use its strengths to prepare for its own future.
SWOT stands for strengths, weaknesses, opportunities, and threats. It is a way for a business to measure where it is currently and where it is going. A SWOT analysis can help a business create strategic marketing plans and make critical decisions. Startups should perform a SWOT analysis early on to determine what to focus on and how to take actionable steps.
What is a SWOT Analysis?
A SWOT analysis is a marketing technique that businesses use to identify their own strengths, weaknesses, opportunities, and threats. The tool forces businesses to take a realistic look at themselves and at their industry overall. With this information, they can make informed decisions about their marketing. Each part of a SWOT analysis is important. Here is a breakdown of each of the components:
- Strength: The resources, skills, or circumstances of the business that give it an advantage over its competitors
- Weakness: What the business lacks or where it falls short in its offerings or abilities
- Opportunities: Any current or future circumstances in the industry that could benefit the business
- Threats: External factors that could impair or limit the business
One key difference between strengths vs. opportunities and weaknesses vs. threats is that strengths and weaknesses are internal and the business has control over them. Opportunities and threats are external forces that the business usually cannot change.
Tips for Completing a SWOT Analysis
Your SWOT analysis will tell you where your startup is and help you define what you hope it becomes. It allows entrepreneurs to view their startup from a different perspective. By doing so, they use their strengths to their advantage rather than falling into avoidable traps.
When completing a SWOT analysis, consider all of the parts that make up your startup. The strengths could be skills that your team has, such as being good at networking, or it could be resources that you have available, such as capital or access to high-quality video equipment.
Remember these tips as you complete a SWOT analysis for your own startup.
- Be Specific. Don’t just say “Our social media is doing well.” Say “We have a large following on our Facebook page” or “Our Instagram stories have high interaction rates.”
- Back-Up with Evidence. You might think that your landing page has a high conversion rate, but how does it compare to the industry? Make sure all parts of your SWOT analysis are verifiable and realistic.
- Think Competitively. Remember that your startup does not exist in a vacuum. Keep your competitors’ SWOT in mind as you determine your SWOT. Think about their weaknesses and see if you could make them one of your strengths.
- Prioritize. When you start creating your SWOT analysis, you should just write them down as they come to your mind. Then, look at them and rank them from most important to least important. This will keep you focused on what matters.
- Keep Your Mind Open. Most entrepreneurs approach a SWOT analysis with a bunch of preconceived ideas already in mind. Don’t let those limit your possibilities. The purpose of a SWOT analysis is not to validate your ideas, but to reveal untapped opportunities and hidden pitfalls.
Take some time to develop a full SWOT analysis. Some aspects of it might not be obvious, so don’t just write down the first few thoughts that come to mind and then move on. This document will help guide your marketing efforts.
How to Use a SWOT Analysis as a Startup
Looking at a completed SWOT analysis can be simultaneously empowering and disheartening. That is the reality of a startup. The business likely has a lot of things going for it, but it also has a lot of forces working against it. The question then becomes, what do you do with what you learned?
To use your SWOT analysis, you should use the positive parts of it to minimize the negative parts. Here is a breakdown of that process:
- Strengths → Opportunities. You can capitalize on opportunities by utilizing your strengths.
- Strengths → Threats. Play off your strengths to reduce the risk of threats.
- Weaknesses → Opportunities. Seek out opportunities to improve and overcome your weaknesses.
- Weaknesses → Threats. Undercut your weaknesses by avoiding threats.
Let’s go back to the student choosing a career example. If a student is an introvert, they probably shouldn’t pursue a career in sales. They can learn all of the sales techniques, but they likely won’t enjoy the work or be as good a salesperson as someone who thrives when meeting new people and talking to them. The student should choose a career that builds off their strengths and minimizes their weaknesses.
The same is true for your startup. If one of your weaknesses is that you have a small team and everyone is stretched too thin, you shouldn’t create a robust social media plan that involves multiple posts a day. But, you can take photos at events or do selfie videos about your startup’s progress and post them on your pages.
With external opportunities and threats, you should continue to capitalize on your strengths. Threats could be negative press within your industry or the fact that you are entering a crowded market. You can’t completely avoid those threats, but you can use your strengths to create a plan to face your threats or build around them.
Next, pull out a list of your objectives and goals and incorporate your SWOT analysis to help you achieve them. Develop a plan of action and discuss how you plan to measure your success with those actions.
In the end, you’ll have a marketing plan in place that takes into account all of your strengths, weaknesses, opportunities, and threats. You will build a strong brand that has a clear purpose and definitive goals. Your analysis will then help everyone on your startup’s marketing team get on the same page and work together to accomplish those goals.