Tag Archives: SWOT

How to start a small business?

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To start a small business is most likely a labour of love. Sometimes it is turning a hobby or passion into a business. Unfortunately, in some cases, some decisions are made with the heart rather than the head. Poor planning or operational choices made for the wrong reasons can easily see a business end all too quickly.

We certainly do not want to talk you out of this amazing journey, as many successful millionaires grew from a small business. The most important thing you can do here is plan well, understand the effect it will have on you and your family, and understand the implications if it does not work. This guide will give you a process to work through to maximise your chance of success.

There are more than two million small businesses in Australia, most with a turnover of less than $10 million per year and less than 20 staff. The average small business has three staff or fewer.

WHAT is important to consider before you start a small business?

Here at Small Business answers, we want to bring you the best-unbiased advice. To save you visiting many different websites, we have assembled easy-to-read guides on the most common questions and processes you must follow to start a small business. This information is broken down into easy categories, as seen at the top of this page. You can quickly find information on the subject you are looking for by using the quick search box to the right.

The basic steps to start a small business:

  1. Consider if you are really ready
    2. Evaluate your business idea
    3. Build a business plan
    4. Choose how you want your business structured
    5. Check your government/legal obligations
    6. Consider what support you will need from others
    7. Figure out your finances
    8. Promote your business

As part of your research you should visit a handy guide produced by the Australian government. Here you will find information to help you work through the steps such as being ready, making decisions, planning, etc. You can even find information on government grants, events, and training that may help you get started.

A checklist is also available that will guide you through the most important factors you need to consider. This includes checking your rationale for starting the business, determining the right business structure, tax implications, and insurance. There are tick boxes for you to check off, which will put you in a much better and safer position in the long run.
Read our essential guides on business structure, tax, GST, record keeping, marketing, building a website, and insurance, or just explore our many guides designed to make your decision-making easier.

HOW do you write a business plan to help start a business:

What is a business plan?

Starting a business is so much more than a good idea and a business plan is a document that makes you go through the entire process including financials. In many cases, a bank, investor, or maybe your partner will require a business plan to justify supporting you in this new endeavour.

A business plan will normally include the following:
  • A summary of what your business will do
  • Where will it be located
  • If it will employ staff, what will that structure look like?
  • What products and services will you offer, where and for how much?
  • How will you manage risk including insurances?
  • Are there legal considerations?
  • What do you need to buy in the way of fixed equipment like a computer or inventory to sell or make something?
  • What hours will you be open and how will you collect payment?
  • How big is the market potential and do you have competitors?
  • Who is your customer and where are they?
  • A list of Strengths, Weaknesses, Opportunities, and Threats of your business (SWOT).
  • What is your Sales and Marketing Strategy?
  • What is your vision and what objectives need to be met to get there?
  • How much money do you need to start your business?
  • How much revenue do you believe you can make?
  • Will you make a profit or a loss?
  • At what point will you actually pay yourself
  • When do you plan to break even?
  • What information have you used to back up these other questions?

It all sounds a bit daunting! But if you work through these points, you will have a much clearer picture rather than starting a business on a gut reaction. Downloading this government business plan how to guide will really make the whole process that much easier.

HINT

Another great place to consider learning more is via a TAFE course, where you will benefit from a face-to-face discussion on the subject.

The great feature of the Small Business Answers website is we are pulling together the most frequently asked questions in starting or running a small business. Please continue to visit this site as we continually update with new information to help you succeed.

SUMMARY – Gather templates and checklists

Make sure you a ready to start a small business and have done your homework on the opportunity. Use some of the fantastic templates and checklists available to help you build out a business plan.

Starting a business is just the beginning of your journey, and you should be prepared to work hard and deal with the unexpected. There is lots to learn and a high level of responsibility, especially if you hire staff. Owning your own business is not easy, but being your own boss will also bring many rewards and flexibility.

SWOT to develop your business strategy

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If you want your business to grow you should ask yourself how does your business compare to the competition? What are your advantages and disadvantages? What are the threats to your success? Are there opportunities that your business has not taken advantage of? This guide will look at a SWOT analysis and show you how you can use this strategic planning technique to help your business identify Strengths, Weaknesses, Opportunities and Threats and then develop business strategies to grow your business.

A SWOT analysis or Strengths, Weaknesses, Opportunities, and Threats analysis is a study undertaken by a business to help understand business competition or help to build a project plan.

WHY should I do a SWOT?

The SWOT tool is a very simple way to develop your business strategy.  It provides a framework to collect your thoughts no matter if you have been in business for years or just starting. (Also see our Marketing guide)

A SWOT analysis is designed to facilitate a realistic, fact-based, data-driven look at your business.

The tool allows you to get an accurate picture of your market position and then helps you to formulate what actions you should take to improve on the current situation.

WHAT do I need to know about a SWOT?

Strengths and weaknesses are internal to your business. These are things that you have control over and can change.

Opportunities and threats are external to your business. These are things going on outside of your business, in the market place. You can take advantage of opportunities and protect against threats, but you can’t change external influences on your business.

 Helpful (for your objective)Harmful (for your objective)
Internal
(within organisation)		Strengths  
x
x
x		Weaknesses
x
x
x
External (outside organisation)Opportunities
x
x
x		Threats
x
x
x

Strengths and Opportunities are helpful to your business and can allow you to grow. 

Weaknesses and threats are harmful and if left unchecked could cause your business to shrink.

HOW do I do a SWOT

Using the table above you need to fill in the bullet points for each of the four quadrants. You may add as many points as you believe are relevant. Be wary of adding a preconceived view versus the real-world reality.

When filling out a SWOT the types of information might include:
(Note points can move between left or right depending if in your circumstance they are a Positive/Helpful on left or Negative/Harmful on right)

Strengths
  • Business strong points
  • Unique selling point
  • Value proposition
  • Internal resource such as your people
  • Tangible assets like IP or capital
  • Marketing or Advertising
  • Business process
  • customers
Weaknesses
  • Factors increasing cost
  • Things your company lacks
  • Factors reducing profits
  • Where competitors are better
  • Resource limitations
  • Unclear selling proposition
  • Is your location ideal
Opportunities
  • Adapting to technology creating new demand
  • Being ready for the future
  • Untapped market
  • Few competitors
  • Press coverage of your business
  • Market is growing
  • Upcoming events
Threats
  • Competition activity
  • Changing customer attitude to your company
  • Government policies
  • Fluctuating markets
  • Supply constraints
  • New market trends

Once you have completed your SWOT it will give you a clear picture of your market position.  As a result, you can create several strategies to take advantage of strengths and opportunities.  Also, develop strategies to address weaknesses and threats. You can then prioritise those strategies based on what you need to do to grow your business. Lastly, you build an action list with dates to address those strategies.

HINTS

If you are starting a new business, a SWOT analysis is part of the business planning process. It will help you formulate a strategy so that you start off in the right direction.

If you are an established business can use a SWOT to assess the current situation and determine a strategy to move forward. Note that things are constantly changing and you will most likely want to reassess your strategy, with a new SWOT every 12 months.

Having an external person like a customer contribute to the SWOT process can ensure a dose of reality.

Sample Business selling pears
 Helpful (for your objective)Harmful (for your objective)
Internal
(within organisation)		Strengths
Good profits
Excellent staff with spare capacity  		Weaknesses
Prices to expensive
Brand not known
External (outside organisation)Opportunities
Produce pear pies
Sell to restaurants
Advertise pears		Threats
Oranges become more popular
Supply issues

Strategy 1. Sell more pears cheaper
Strategy 2. Build pear pie business

Action 1. Reprice pears by end of the month
Action 2. assign a staff member to research pear pie’s by end of week
Action 3. Get staff to phone restaurants offering them pears by the end of next week

SUMMARY – actions to match your business strategy

A SWOT analysis is a framework allowing you to evaluate your business or business idea from a competitive position and to develop strategic planning. By reviewing strengths, weaknesses, opportunities, and threats you can gain a fresh perspective and new ideas. A SWOT can be done in as little as an hour which then can be used to develop strategies to grow your business which will be delivered by a list of action items.