It’s seems really enticing doesn’t it? Becoming your own boss, working your own hours and earning far better money than you will ever earn as an employee? But what are the perks and what are the risk factors of going it alone?
In this blog I discuss how to complete the right analysis to decide if setting up your own business is the right decision for you.
The SWOT analysis is an age old, trusted system business owners use when making a decision to start up or develop a business. Firstly don’t do this with others input initially do it alone with only your goals, dreams and desires to drive you on with this exercise.
What does SWOT mean?
This exercise guides you to analyse the STRENGTHS, WEAKNESSES, OPPORTUNITIES and THREATS of setting up your own spa or salon business.
This process will identify your strengths as well as weaknesses in you or potential staff in your business, products you might be using, external opportunities, threats such as a change in the market or consumer trends, legislation and even financial issues.
Whenever I create a SWOT analysis I follow the traditional approach which is to create a grid like the below:
I usually create this on an A3 size paper so there is plenty of room to write.
Take some time to identify the strengths of this potential project. Where your strengths lie; potential products you might use, current customer base to transfer, location, possible staff etc. Look at what your new business will bring to the industry and why it will benefit the customer. How will your business excel over other similar businesses in your locality?
Now look at the challenges you might face. What weaknesses can be identified in the business? This is not to say that there is not a viable business opportunity there but by identifying the challenges instead of thinking everything will be perfect from the start will prepare you for future challenges that you might face. For example if marketing is not your strong point then this will impact your business so you may need to outsource this work meaning additional expense or it may then become an ‘opportunity’ for you to complete a small business marketing course!
When completing the exercise look at a 5 or 10 year plan this way you are creating a business opportunity that is more sustainable than just identifying the current market trends as they change year on year. This can overlap with other headings like weaknesses can also create new opportunities and threats can also lead to new opportunities for your business. Look at internal opportunities within your business and then look at the external opportunities for example if you are setting up in a small town, you have huge opportunities to work alongside the local community helping the town become better known on the map via group marketing initiatives. Not only will this benefit your business but also the town as a whole plus you are now not working alone but helping each other out which will benefit everyone. Are there industry developments and change in trends that you can tap into creating something new or unique that other businesses can’t offer – like an additional skill or qualification you have that may not be directly linked to your business but you can create something with it.
Sometimes this area can be challenging to identify, you may be guessing some of the threats here but remember threats are not a dead end for your business. If you have identified the possibility of it happening you will be better prepared if it becomes a reality. Again I will say many threats can be turned into ‘opportunities’ so it is not all negative when completing this section of the exercise.
Now you have opened your eyes to the possibilities and challenges for setting up your own business, you can now make a more realistic business plan of how to move forward with your initiatives. You may identify that your business plan requires more research or some changes, you may need to enrol in a mini course or two to up skill in certain areas but at least now you can add this into your plan and you will not be stopped in your tracks three months down the line when it hits you unexpectedly.
Once you have completed your initial SWOT analysis sit within a trusted person to discuss it all and see if they have any additional suggestions. Remember everyone will have a different opinion and close relatives, friends and family members may be looking at protecting you from their fear of failure. This is not a bad thing because they will challenge you on a deeper level as they know you very well and this will give you the opportunity to really think outside of the box about whether your business is a viable one. Once you have a clear plan they will be more content that you are on the right path and your mind will be a lot more certain and clearer than just ideas flowing around in your head.