You spend a lot of time on your online business.
Creating content, promoting it, building relationships.
But have you ever done any strategic planning or analysis regarding your business?
Most likely no.
Now, “strategic planning and analysis” sounds fancy and that term can also scare you. You might ask, is it even necessary?
The answer is no, it’s not necessary BUT it can give you a hell of an advantage. And the easiest way to start doing something about it is to use SWOT-analysis.
Two dimensions to consider
There are only two kinds of things in life: things you can control and things you can’t.
This is also the basis for the SWOT analysis.
So what you need to do is to take a look at the internal factors of your business, i.e. the factors you can control and are directly responsible for as well as the external factors which you can’t control, but can exploit and prepare for.
Let’s start with the internal factors. The two things you should consider are:
- Strengths: The characteristics that give you an advantage over others.
- Weaknesses: The things that your business is lacking in.
Not exactly rocket science, right? Then, let’s move to the external factors:
- Opportunities: External chances that you can exploit to improve or grow your business.
- Threats: External events that can harm your business.
So the end result is an analysis of the Strengths, Weaknesses, Opportunities and Threats (=SWOT) regarding your business. Typically the analysis is performed in a 2×2 matrix, just like in the image below.
Don’t be fooled by the simplicity – when used right SWOT analysis can really give insight in to your business and help you grow it while minimizing the risks involved.
The easiest way to demonstrate the power of SWOT is to actually do the analysis. I recently published an ebook on Kindle, so to me it’s natural to talk about that experience.
Example: SWOT for a Kindle ebook business (Case: Joona)
Let’s dive straight in.
1) Strengths
One of the strengths in this case is my definite subject matter knowledge. And what’s even better, there are very few people around who has similar experiences and skill-set and even fewer who are willing to write their knowledge down. Good for me.
Another strength is the fact that the target market is big and is kind of evergreen. Okay, I will reveal the general market: my product has been targeted to students. There are students now, there will be students next year and the year after that. And that.
My product helps them solve several problems that actually exist in real life. I know that because I have suffered from them and seen other student’s struggle with the same issues.
And, I made some research to validate the idea too. (More about this and the mistakes when creating this product in another post)
2) Weaknesses
…But not all is fine and dandy. As you can probably see, I am not the strongest of writers. Usually I am able to get my message across and understood, but I am not a wordsmith with superpowers courtesy of God/Allah/Buddha/Santa/Whatever you believe in.
Other thing is that I have no passion to become a writer. So, for me this business model would not work in the long run.
And to be fair, I do not have external qualifications that would set me apart in the niche. Plus I am using a pen name so they wouldn’t help anyways.
3) Opportunities
The biggest opportunity is definitely the expansion of Kindle as a platform. As Amazon grows their customer base, so grows the number of people who could potentially buy my ebook.
Another big opportunity is Amazon’s marketing and authority. If the product gets a decent reception from the general public, Amazon will do a lot to promote it to people who might be interested in it. You know, those emails you get from them occasionally. Big, big opportunity right there.
I could also expand this business by riding the trends. For example, last years have seen the paleo diet become more and more popular. Surely there could be a sub-niche I could target. And there will always be new trends. Identifying the strong ones early on and pouncing on them before others would be a big opportunity too.
Of course, outsourcing the writing by hiring a ghost writer is one option too. (And in case you are wondering… Yes, a native English speaker edited the ebook.)
Okay, then the threats.
4) Threats
The biggest threat is of course suspension of the product from Amazon. Or some problems with the account. I don’t consider the likelihood of these to be very high, but still… it could happen.
Other threats include competing products who target exactly the same topic. At the moment there isn’t any, but information is so easy to copy and re-write…
Related to the previous point, new entrants in the same niche could also prize their products lower than me which could mean a (big?) portion of the target market opt for their ebook instead of mine.
As you can see, the analysis itself gives a pretty decent overview of the current situation regarding the Kindle publishing model in my case. However, this is not where it all ends. This above matrix can and should be taken a bit further to squeeze out action steps to improve the business model.
Actionable insights based on the SWOT analysis
First, let’s check the internal stuff, meaning strengths and weaknesses with focus on weaknesses.
I can’t do that much with the unwillingness to become a writer. I could try to force myself to that direction for business reasons, but… I am just not interested.
I can, and will, work on my writing skills though. Being more comfortable with writing and improving my style would of course make it easier to make this business model work for me. Maybe sometime in the future I could write more ebooks. Maybe.
Now, let’s switch the focus to the external situation.
Again, let’s start with the negative stuff first. I could fight against new entrants by lowering the price of the ebook. If other’s see that a similar product is already on the market with a price of 1 dollar, most likely they would not start selling/producing their ebook at all. Then again, this would mean that my profits would plummet too.
There is not much I could do in case my account would be suspended, at least not on Amazon. They would not accept the same ebook for sale under a different name/account.
One solution would be to start selling the same product on a different platform, say iTunes or independently by building a small site around it and promoting it.
Final thoughts
Granted, the above example is not the most sophisticated one. After all, publishing an ebook on Kindle is very simple kind of business.
But the thing is… just stopping for a while and analyzing your business can make a huge difference in the long run. You can see if there are some untapped opportunities out there and you can also discover ways to protect your business from external threats.
The SWOT-analysis is not an almighty tool that will solve all the problems related to your business. A lot will depend on the person or persons who are actually doing the analysis. The better the observations, the better the result.
SWOT is very useful, if:
- You are working with a partner or partners. This will give you a common understanding about your business and put you all on the same page.
- You have never put any effort in analyzing your business landscape.
To help you do the SWOT, here is a template you can download in pdf-form:
You can type in to it and save it for later.
One more thought… What about using SWOT to analyze the business of your competitors and using the insights for your benefit? I bet there is something you can learn by analyzing the most successful businesses in your field and using the same strategies in your business. (Of course the strengths and weaknesses would be from an outside perspective, but it is surprising how much you can find out just by keeping your eyes open. Again, more about this another time.)
Few questions I’d like you to answer:
- Are you aware of the strengths and weaknesses about your business model(s)?
- How do you try to find untapped opportunities and identify the threats your business might face?
- Do you think SWOT would be useful tool in your arsenal?
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