Start Smart | Tips for SWOT Analysis for Startups


SWOT analysis for startups is a way to know about the four aspects the strength, weaknesses, opportunities, and threats to the organization or a startup.

Given below is a simple example of SWOT analysis for the startups.

 What is the strength of the startups?

  • Boldness    

Because startups are at the initial stage, nothing has been established yet. So as a startup, you can experiment a lot. You are open to all the new ideas that are available and lose very little. You can go for every possible opportunity.

  • Agility and Speed

Since startups have a small team with limited and focused resources and very little bureaucracy and hierarchy, so it is effortless for startups to opt for a new strategy or change an ongoing strategy. Also, the startup doesn’t need very advanced communication tools to communicate with the team members.

  • Work Environment

As we all know that the unpredictability of working with a startup can create a lot of stress. But despite that, your team has unrevealed opportunities to bond together as you all face the challenges together and use creative ideas to find out the solution to the problem. You will have plenty of chances to innovate and to see whether the efforts are effective and everlasting.

  • Little Bureaucracy

In larger companies and organizations, everything is formalized and well documented. Each and every minute thing is well documented, and there are strict rules and regulations. All the decision-making process goes through a hierarchy and which makes it very time taking process. But in startups, every person’s opinion is considered, and if they find it attractive and useful, they make plans to execute it as soon as possible.

What is the weakness of a startup?

  • Fragility

The biggest problem with the startup is that the startup can collapse any time. There could be so many reasons for this. One reason is the lack of funding. A business has both monetary as well as non-monetary needs and to fulfill these non-monetary needs, startups need money. If the startup has no source of funding, then it is likely to collapse. Another reason could be the founder dispute. Startups are associated with a lot of stress, and if it is really very necessary to be with each other during hard times. Sometimes the founders of the startup fail to overcome this stress and part away in different ways. Sometimes, people even lose interest in the idea or market opportunity.

  • Lack of capital

According to SWOT analysis for startups each and every startup require some capital like initial hires, office space, permits, inventory, raw material, marketing research and strategy, product manufacturing and testing, and few other petty expenses. As startups are a new player in the race, they need to know each and every aspect like how much raw material or inventory is required, what are the different marketing research they need to focus upon and what type of customers they need to target. Sometimes the startups fail to identify and analyze these needs and collapse.

  • Underdeveloped Network

Because you are new to this business world, you may not have a better reference to know where to fulfill business needs from, and where to seek advice. So this is always better to seek help from a trusted source. The well-established organizations with extensive networks provide resistance to the startups with an underdeveloped network.

  • Lack of Perspective

Unlike well-established organizations, startups have minimal experience in the business world. Since well-established firms are in the market for so long, they have seen ideas and companies come and go, made a lot of mistakes. All these experiences make well-established organizations to identify the scope of development and opportunities. But as a startup, lack of experience leads to missteps and false hopes.

What are the opportunities for the startup?

  • Unlimited Upside

If you’re the owner, then there is nothing like a fixed salary. You can earn unlimited. Examples here include Google, Facebook, and Uber, who generated billions of dollars in return to its founders and investors.  

  • Ride a Wave

From your business, you can generate other opportunities as well. For example, the invention of smartphones gave birth to many products and services. As an example, without a smartphone, Instagram and Uber wouldn’t exist. Startups help in providing employment as well. This is the main reason governments are helping startups to a great extent.

  • Learning

One of the great opportunities for startups is that they can know how to convert the data and lessons to money. You fail, but at the same time, you have the opportunity to learn from your mistakes.

  • Choosing a right and quality mentor

One can define a mentor as a person who can guide you at every step and is there every time for you. An outside perspective can save you development cost. Go for a mentor who matches the business qualities you want to build and not for a person who is your friend and knows the same field. Find a mentor who is not afraid to offend you and who has been proven successful in moving a similar kind of business forward.

 What are the threats to a startup?  

  • Government

According to SWOT analysis for startups, over 95% of startups find government as the biggest threat. Owners are worried about government regulations, loans, taxes, marketing restrictions, and other rules and regulations. Still, 60% of small business owners feel like the economy has improved since last year.

  • Competition

22% percent of small businesses feel that one of the major threats to their business is competition from well-established firms and the substitutes available in the market. Is there any solution for this problem? Yeah! Build a better brand. You can start with a better website, an effective online marketing strategy, and media coverage. Make your product or service creative and innovative and let the users know how your product or service is better than the other substitutes available in the market.

  • Sluggish Demand

Around 35% of entrepreneurs feel like sluggish demand is one of the significant threats to their business. Irrespective of how many positive signs economists can see for growth, without customer’s demand, the business can’t grow at all.

Points to remember

SWOT analysis for startups can be used as a guide, but it can be very subjective. Keep the point in mind that two different kinds of people have different types of opinions and might come up with two different analyses, so you can’t rely on SWOT analysis too much.

Also, the SWOT analysis for startups can be used in conjunction with other analysis tools like PEST analysis and Porter’s Five-Force analysis for better understanding.

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