How to do a SWOT analysis of business ideas.

Anyone looking at starting a new business or evaluating business ideas needs to carefully examine its strengths or positive attributes. Alongside those criteria are the opportunities that may be present to profit or scale and expand that business and any threats to that expansion or sales boost.

Starting a business without planning and evaluating its competitors or understanding the external factors that might threaten your business, may simply set the business for failure. Business is a gamble but it’s better to gamble with as much knowledge as you can before taking that bet right?

Similarly, by not performing some basic scrutiny of the business idea you may overestimate your own strengths in regard to the venture your proposing. By understanding what your personal strengths and skills are you may start a business based on emotions but it has the potential to fail due to lack of your own skills or knowledge assets.

A SWOT analysis of a business idea will help you see a business’s strengths and weakness so you can compare it to other business’s that you may be contemplating.

Assuming your looking at starting a homebased business so you can live a more homebased lifestyle, examples I use here may include reference to your Personal SWOT analysis points: such as YOUR skills, knowledge, or available funds.

You may, however, choose to do a separate Personal SWOT analysis and separate assessments of each business idea.

If you haven’t already, check out my blog post on 15 business’s you can start from home. At the end I’ve given my top 6 homebased ideas, that you may wish to evaluate for yourself.

You might do your Swot Analysis through a Brainstorming activity. By gathering family, friends, coworkers or stakeholders, you’ll gain more insight and points of view you may otherwise have missed. Their common knowledge is a valuable resource and a STRENGTH.

For more information on brainstorming checkout my Blog post on How to Brainstorm ideas.

Note: I am not a professional and this information is from my own personal understanding on the subject and may include my personal experiences. I am not an expert on this subject so this is merely to spark your interest and give you a starting point and should not be relied on. Please seek out professional advice before starting any business venture.

What’s a SWOT analysis

A SWOT analysis is simply a planning tool used to assess a business’s Strengths and Weakness, Opportunities and Threats. It’s used to strategically plan and evaluate those business’s or business ideas. It can be further broken down into individual Swot analysis for your own personal evaluation or that of Staff, Sales or promotion ideas, projects, advertising campaigns, business expansion or sale etc.

Strengths and weakness may be referred to as INTERNAL factors, while opportunities and threats may be seen as EXTERNAL factors

A SWOT analysis is usually represented as a quadrant but I prefer to simply use a column form.

SWOT analysis breakdown

Simply ask yourself questions about the business potentials and requirements to evaluate the business ideas and write the answers in the corresponding column (or quadrant).

For example can I operate the business from home, or do I have the skills or qualifications? If the answer is No I don’t have the qualifications or skills then write that in the WEAKNESS column.

Do I have the required finances to start?….if so then Write that in the STRENGTHS columns. Write the number of $$ down or express it as a percentage of the funds required. You can use this to cross evaluate this Business with other business ideas or choices.

Strengths

What are the POSITIVE factors about the business idea?
Can I operate the business from home?
Do I have the available cash or finance?
Do I have the resources needed and if so what are those resources?
Can I operate this business with minimal hours so I have work life balance?
Will this business have longevity?

Weaknesses

What are the NEGATIVE factors about the business idea?
Do I have any money?
Do I have any resources?
It’s a noisy business. Will the neighbours complain? Will I have noise restrictions?
Do I need a computer because I don’t have one?
I’m low in motivation and I like to sleep in. Is that a problem?
I don’t have a car. Do I need one?
The business idea only makes X amount of $ but I need Y amount of $$.
Is it hard to get the required licenses for that business to operate at home?
I need a diploma or a degree or certificate for this job and I don’t have any.
Theres a lot of competition for sales so my market share would be low.

Opportunities

What are the POSITIVE external factors affecting the business idea?
I think company XYZ might be closing giving me more market share?
I wonder how much extra market share I can get when XYZ closes down?
I wonder what government resources there are to help me succeed?
Can I buy any equipment to help me start this new business idea?
My wife/cousin/uncle/relative/friend knows all about this type of business. Maybe they can help with advice etc?
This business can easily be scaled and make me more $$!
There’s low competition in this field!

Threats

What are the NEGATIVE external factors affecting my business idea?
I think governments may tighten the regulations on this type of business in the near future?
I think I may need to continually keep up with study and qualifications for this business?
I have old equipment. I wonder if it will last the distance?
Will this business get too big and I have to find outside premises? What will that cost? There goes my homebased lifestyle!
My family might expand and I’ll no longer afford to run this small business and need more money.

It can seem overwhelming to do but A SWOT analysis will help you to analyze a business choice. A personal SWOT analysis also gives you the opportunity to reflect and evaluate what knowledge, skills, and resources you have and highlight the opportunities then to improve on yourself.

Getting some skills and extra education will certainly help your business idea to bloom and give you more opportunities and choice. Good luck with your chosen venture.

Click here for All working from home posts

SWOT Analysis example

Let’s look at an example of a SWOT analysis.

You can use a writing pad, word document graph or excel spreadsheet to create your own. There is however many free templates or paid versions available online.

In my example I have evaluated the Business idea of being A CHICKEN FARMER.

You might like to evaluate some of the many other homebased business ideas in my blog post 15 profitable Business ideas you can easily start at home.

SWOT ANALYSIS FOR A HOMEBASED CHICKEN FARM

Strengths	Weakness’s	Opportunities	Threats	Evaluation/comments
I like chickens	I don’t know enough about chickens	Organic chicken is in high demand	There’s potential for diseases	I can learn more about chicken farming and diseases.
I have some land	I don’t have enough land ie acreage	Theres no competition near me	Organic Certification can be hard to get	I really need acreage which hasn’t been contaminated with chemicals.
I have some chickens	I’m not qualified to be a chicken farmer	There’s a course I can do online about chicken farming	Theres restrictions on land use that may stop me farming chickens	I need more knowledge about chicken farming and in particular land restrictions. I really don’t have enough chickens
I know about advertising and promotion	I have only 20% of the required start up costs	The price of chicken is set to go up potentially	A new multinational chicken farm may open	I need to save more money to start up. Once I start, I know how to get my products sold. I better be quick to profit before large corporations move in.
I have a computer	I only have enough cash to last for 3 months if I started farming	Organic eggs are becoming more popular	Imported eggs or chicken meat may flood the market and cheapen prices	I don’t have enough money, but I think I could do alright with the price of organic eggs if I started.
I have business experience	I only have 8 chickens	There’s a sale on chicken hatchlings starting next month	Pests like foxes, eagles and wild dogs are a threat	With my business experience I think I can succeed with hard work. Maybe I can close a better deal at the chicken hatchlings sale? I can get a good fence and netting for the chickens to keep out pests, though that’s expensive. I need more money I think.
I have a large family who can help me	My chicken pen is too small	Theres a new chicken caravan on the market which can house 100’s of chickens		I wish I had the money for a chicken caravan. I think I have enough equity in my home to buy one. But I also need more land, fencing and chicken hatchlings, chicken food and equipment.
Chicken farms can be profitable	I don’t have Egg washing facilities	Theres a farm for sale near me		Do I really want to sell my house to buy a farm?
It scalable	I’m far away from markets	Online sales are booming		A farm sounds nice, and I could sell directly online and transport the chickens or eggs. I wonder if there’s restrictions?
Everybody needs to eat	My family have other jobs they’d rather do	It’s cheap to start an online store		I think I’d need my family to help me with this venture. I could offer them shares in the business perhaps.
Eggs and chicken meat are always in demand	Chickens might smell and be messy	There’s a farmers market starting soon in the nearest small town.		I could sell chickens or eggs directly to the public and maximize my /our profits!

Final Analysis of my chicken farming idea

(This was for demonstration purposes only).

Looking at my SWOT ANALYSIS example above, it’s clear that I have a strong interest in chickens, though I’m lacking resources and knowledge in organic chicken farming on a medium to large scale. I can get this knowledge through online courses.

I don’t have the finances available, though the profits for organic chicken or eggs sounds like a tempting idea with low competition and online sales available. Unfortunately, I would have to sell the family home to buy the required acreage, and my family would be even less keen to help me in this venture…. though maybe they’d like to live on a farm with a share of the profits.

There are some threats to the business potentially so I would need to have a niche market and plenty of profits behind me to fend off competition.

Financially I would have to save lots and lots of money, start a side hustle to help finance my business.

Perhaps I could Start a blog about chickens and a work from home lifestyle instead! …and use the profits to eventually start a chicken farm… maybe.

If this has sparked your interest in chickens, or your passionate about starting a chicken farm, checkout my chicken blog posts here:

Click here for my chicken page

Conclusion and Summary

A SWOT ANALYSIS is a useful planning and evaluation tool to help evaluate a business idea, sales promotion, or new product and more.

It’s particularly great at evaluating a potential new business but can be used to take a closer look at your own personal knowledge, skills and resources.

As a planning tool, A SWOT analysis using either a TEMPLATE or creating your own with a simple 4-5 column table will enable you to set out the Strengths, Weakness’s, Opportunities, and Threats for your Business idea, project or Personal introspection.

Essentially you could say your discovering the Pro’s and Cons or The Positive and Negatives of the Subject.

As the saying goes, for every Positive (+) there is A corresponding Negative (-), so A SWOT Analysis can highlight those Weakness’s which is an Opportunity to grow!

For Example if your Unqualified or Skilled for the project or business idea (WEAKNESS), there is now an OPPORTUNITY for you to learn a new skill through Online courses or degrees….and turn that Weakness into a STRENGTH!

When your Strengths and opportunities outweigh the weakness and Threats, you will have the greatest chance of success.

There are government funded resources which can help with Business planning tools such a SWOT analysis template and many other Free templates. There’s many commercially available templates online for a small fee.

Swot Analysis made easy for Homebased Business ideas