Continuing the “How to Write a Business Plan” series (so you can get loans from a bank, pitch to venture capital or appease your spouse when they ask why you’re putting the house on the line), here is Step Two for your foray into a legitimate business. Click here for the original post on first baby steps for writing a business plan.
After you’ve written your expanded elevator pitch, it’s time to do a traditional SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis. Click here to get a SWOT template.
First, determine your market. Who will buy your product? How many people will buy it? How bigs in the market? Is the market growing? Do you want to be a small fish in a very big pond, or a very large shark in a small pond (pond = market)?
Next, lay out your Strengths. What are you good at? What makes YOU uniquely qualified to deliver XYZ service or good? What will your “secret weapon” be? What are you really good at?
Weaknesses. What do you hate to do? What are you terrified of? Do you have enough money to do the start up? Is your technology up to par? What skills are you missing to make your business successful?
Opportunities. Is the market growing? Are there new markets you could get into with your existing product? Is the demand there for flanker products?
Threats. Who are your competition? What are they selling? How far ahead of them are you? How much money do they have? How well is the market identified? How are your competition viewed in the industry?
This analysis could be analyzed as a free-form essay over many pages or just summarized in a nice grid that looks like the example on the above right.
In my experience, it’s best not to sugar coat your weaknesses or underestimate the strength of your competitors. You’ll only end up disappointing yourself later on when the business isn’t doing as well as you had hoped or promised.