SWOT or Strength-Weakness-Opportunities-Threats as it is called is very useful tool to know and understand the risks related to one’s venture.
The entrepreneur is a hurried lot. He wants to get to the start of the venture as early as possible. Many times, lack of planning puts his venture at more disadvantage compared to if he had planned for it. SWOT tool helps to keep him on track and aware of pitfalls that might occur. Let us understand it.
For e.g. we want to start an online gaming company. Let us do a SWOT analysis
Good knowledge of Industry
Good technical knowledge of team
Experiences of working with latest technologies
Funded by VC
Lack of marketing skills
Lack of branding skills
Team still to be committed
and other perceived weaknesses
A large international market
Increasing internet savvy population
Increasing broadband penetration
Large % of younger population
Ever changing technologies
This analysis can act as an input to understanding the risks that your company faces. Once you have written them down, you can start working towards reducing risks and their impacts. For e.g. if you have ever changing technology as a risk, you can plan for trainings at right time and adopt to newer technologies faster than competition.
I used SWOT analysis for my own project and it helped a lot. Hope you find it useful too.