As was mentioned in the first part of this article Business Plan Basics SWOT (Part I) – Strengths & Weaknesses, a basic part creating your business and marketing plan is conducting what is called a SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis. The second part of conducting a SWOT analysis is doing an inventory of the opportunities and threats facing your creative business.
As we did with analyzing Strengths and Weaknesses the first place to start by taking a piece of paper and draw a vertical line so you have two columns – one labeled Opportunities and the other labeled Threats, you can take it even further by adding a third column labeled Neither or Neutral.
When we looked at our strengths and weaknesses we were analyzing factors that were internal to our creative business – opportunities and threats are factors that are external to our business. Typically these are called “environmental” factors – not necessarily the green kind but this type is becoming increasingly important.
Why do I need to look at Opportunities and Threats?
In the simplest of terms – you capitalize on or take advantage of opportunities and you reduce or eliminate the threats that face your creative business. Along with strengths and weaknesses, opportunities and threats form a basis for you business strategies.
Areas to look at:
As with Strengths and Weaknesses start by keeping your analysis of opportunities and threats free form. Simply ask the question “What things are opportunities to my creative business?” and then “What things are threats to my creative business?” What effect do they have on your business today and in the future? Before you start I encourage you to take a look at a recent study conducted by the National Endowment for the Arts (NEA) 2008 Survey of Public Participation in the Arts and another NEA study Audience 2.0: How Technology Influences Arts Participation.
Here are some areas that you should be sure to consider:
- What is happening with your local and regional economy?
- What is happening with the national and international economy?
- What is your competition doing (or not doing)?
- Are there changes in consumer tastes / fashion, or behavior?
- Are there changes in consumer lifestyles / behavior or market trends?
- Are there regulations or government policies that affect or will affect your business? These could be factors that affect how you produce or sell your product.
- Are there market forces that may affect how your products are sold, distributed or paid for?
- Are there environmental regulations that affect or may affect your business?
- Are there new technologies that may change the way of how are products are made?
- What is happening with the supplies, labor and raw materials you need to produce your products?
This should get you started in analyzing your Opportunities and Threats. If you have any questions or some other things that should be on the list I invite you to post them in the comments. I look forward to hearing from you!