Going It Alone - Part 6: SWOT Analysis
Note: This is the sixth and final post in our “Going It Alone” series about business essentials that artists and crafters who run a business need to know. The first installment dealt with motivation, the second discussed taxes and record keeping, the third dealt with accounting and finances, the fourth discussed structuring your business, and the fifth had to do with apps and technology.
There is a book that almost everyone who runs a business, including those of you who are artists and crafters, needs to read. This book was written over two thousand years ago by a man named Sun Tzu and has influenced millions of people throughout the years. The book is called “The Art of War” and is considered to be the definitive work on military strategy and tactics.
You might be asking, “What does a book about war and military tactics have to do with me and my art business?” The answer: a whole lot!
The book, though it deals with military strategy, has also influenced political, legal, and business leaders. It is one of the sayings that Sun Tzu wrote in “The Art of War” that we are going to focus on in this final blog post in our “Going It Alone” series.
Consider this from Sun Tzu: “It is said that if you know your enemies and know yourself, you can win a hundred battles without a single loss. If you only know yourself, but not your opponent, you may win or you may lose. If you know neither yourself nor your enemy, you will always endanger yourself.”
Ok, as an artist or crafter, you probably don’t have bitter enemies, and you are not fighting a war with swords, guns, and bloodshed. However, you do have competitors, and everyday you are fighting a battle to keep your business going. Hopefully now the Sun Tzu quote is making more sense when it comes to you and your business. Today, we are going to help you figure out how you can know your opponent and know yourself.
One way you can learn about how you and your business are doing is to create a SWOT Analysis. SWOT stands for Strengths, Weaknesses, Opportunities, Threats. This analysis is used by Fortune 500 companies, and it can work for you too. The goal of the SWOT Analysis is not just to learn more about how you and your business are doing, but also to translate the results of the analysis into specific action plans that can help your business grow and continue to succeed.
Before we go through the analysis, there are a few things you need to know. First, the categories are divided two ways: Internal (strengths, weaknesses) and external (opportunities, threats) factors and also favorable (strengths, opportunities) and unfavorable (weaknesses, threats) factors. Internal factors are those that you can control and external factors are those that you have no control over. And of course, strengths and opportunities are good for you, and weaknesses and threats are those that can negatively affect your business. Confused? We’re going to go more in depth to give you a better understanding of how a SWOT Analysis can work for you.
What are you good at that can translate well to your business? Are you naturally an organized person? Do you have the ability to talk with people and sell yourself? These are strengths that, though they may not have a direct connection to your arts and crafts business, are still skills that you can use to benefit your career. Do you have the knowledge and skills to offer a wide variety of products to your clients? Can you sell your products to men, women, and children? These are also strengths that can benefit your business. They are also things that you can control. You can also learn new skills that can be added to this strengths section.
Are you constantly procrastinating? Is your record keeping skills lacking? These are weaknesses that can cause harm, even though they are not directly related to your craft business. Do you get frustrated with customers and show it sometimes? Do you fail to stay up to date with new trends in the arts and crafts industry? These are also weaknesses that can harm your career. Here’s the good news: Weaknesses are also in your control. For example, If you are constantly procrastinating, you can simply start creating your products a week sooner than you normally do. Simple fix, right? Ok, it might not be that easy, but taking positive steps can lead to taking your weaknesses and turning them into strengths.
Did a review of your art come out saying that you are the next Picasso? (Hey, we can hope, right?) Does a new crafting trend involve something you are particularly good at? These are opportunities that can have a positive impact on your business. What makes opportunities different than strengths—and also a little bit harder to manage—is that you have absolutely no control over these opportunities. It’s not like you can just make up a positive review (at least you shouldn’t) or easily come up with a new national or international art trend that just happens to involve skills you are good at (you can try—we’re cheering for you so best of luck). They are sometimes just lucky things that happen to benefit your business. Also, it is important to remember that these opportunities are just that—opportunities. If positive trends are happening around you but you don’t take advantage of them, you and your business won’t be able to gain the benefits that can come.
Is the economy in a recession? Did a new study come out saying that the paint you exclusively use for your paintings is harmful to people’s health? Did a review come out in which the reviewer didn’t like your work? Did a new artist start a competing business in your area? All of these situations are examples of threats to your business. And, like opportunities, you have absolutely no control over these situations or scenarios. They just happen and the only thing you can do is work as hard as possible to reduce the negative impacts that may come. And sooner or later things will either return back to normal or if the threat becomes a permanent or ongoing issue, you can adjust your business to deal with the repercussions.
Creating Your Own SWOT Analysis
Now it’s your turn to create a SWOT Analysis for your business’s circumstances. Figure out your strengths and weaknesses and you will know yourself, as Sun Tzu says. Go through and pinpoint the opportunities and threats of your business and you will know your opponent, as Sun Tzu says. (Your opponent is anything that has the potential to impact your business in any way that you do not have control over. This includes not just competition, but also the economy and many other factors.)
When you work on the SWOT analysis, particularly the internal factors that you can control, it is important that you are honest about the situation you and your business are in. This is not a time to be modest about your strengths or defensive about your weaknesses. Don’t overestimate opportunities and underestimate threats. Make it specific and keep it REAL.
Using Your SWOT Analysis to Grow Your Business
Once you have gone through and taken the time to create your own SWOT Analysis, it is now time to use the information you learned to grow your business. Build on your strengths. Correct your weaknesses. Take advantage of opportunities. Do your best to avoid—or come up with a plan to minimize the negative results of—threats.
Doing all of these things may be easier said than done. It may take you a while to correct a weakness or even build on a strength. That’s ok (at least most of the time—sometimes it might be imperative that you move quickly, usually when a weakness or threat begins to emerge). Come up with specific goals based on what you learned in the analysis that will help your business. In the meantime, keep doing what you do best—creating amazing works of art or crafts—and then you can use the information you gathered with the SWOT Analysis to take your business to a whole new level.