SWOT, PEST and More Fun!
Like any entrepreneur, the one question that will strike you often during the day or even in midnight hour: is this business going to work? Well, as one of my mentors once told me – you can ensure you take all precautions, fill out the right paperwork and cross your “T”s and dot your “i” and yet have a difficult time with your business. Or you can venture off with a basic idea, a basic product and somehow you’re off to a good start.
No one has a crystal ball to determine if your business will be successful, there are few key indicators that you need to pay attention to, regardless of your sector or industry. Take the time to conduct a SWOT analysis.
Be honest with your SWOT analysis. Remember you may go through a variety of versions of any of your documents and may not end up in your final plan. However, with the SWOT analysis, you will want, to be honest regarding:
- Strength: education, experience, your network etc.
- Weaknesses: your access to capital, access to resources, budgets etc.
- Opportunities: the areas your competitor lack, a new trend in market etc.
- Threats: the risk involved; legally, competitor budget,
Research is important!
The whole document is intended to prove a business case and all your research should support that you have taken the time to understand your place in the market. The research will be the instrument that will influence the direction of your business and support your creativity for your business.
Along with the SWOT analysis, be familiar with the PEST analysis. The PEST analysis is an in-depth look at external factors that will dictate how you operate. Do not be shy from learning what they are. The more you know you can strategically plan ahead.
Why is the PEST analysis important? It will help you understand:
- What is happening in government that will affect my business? What is the change in power or who is currently influencing decisions? (Hint: from municipal, provincial and federal legislation it is important to know)
- What is the change in consumer trends and needs? Is there a specific favor on specific method because of technology or view of consumers and how you can adapt to it?
Abel Nunez, SEO Specialist and Creative Director at Creative Marketing Nerds explained it well on his LinkedIn article: PEST Analysis: Essential Small Business Contingency Planning Tool.
Remember the more research that supports your ideas; the stronger the business plan.