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After you have acquired more information for each business idea, you will notice several reasons why some
ideas are stronger than the others. For example, an idea may be received well by potential customers and may
have very little competition in the marketplace, but may need a huge initial capital investment. On the other
hand, there might be a business idea that is popular with potential customers, but that has some competition
and needs less initial investment. Therefore, the second idea might be more feasible if you do not have access
to a large amount of money.
Make note of the three ideas that meet all the criteria and would offer the best potential. Once you have reduced
your list of business ideas to the three that are most suitable, the next step is to use a SWOT analysis tool to select
the best idea out of the three.
3. SWOT analysis
One method people often use to decide the most suitable business idea is a SWOT analysis. It helps you to
focus on the possible problem areas and the potential advantages of each idea.
SWOT stands for:
S
W
O
T
Strengths
Weaknesses
Opportunities
Threats
3.1 Inside the business
To analyse the strengths and weaknesses of your business idea, evaluate what will the business be good at and
what the potential drawbacks or problems might be.
Strengths are the specific positive aspects which will give your proposed business an advantage over similar
business ventures and the competitors. It could be that you propose to sell a better quality product or that you
have a location which is more accessible to your customers. There will always be demand for new products
that offer new ways of solving old problems or are more efficient than other products. Could your good or
service benefit from having a Fair Trade or Organic Product certificate? Customers are inclined to pay higher
prices for Fair Trade or Organic Products.
Weaknesses are the things that your business will not do as well as other businesses. Perhaps your
costs will be higher because your business is located a long way from the source of supplies needed for
production and you will have to pay more for transport or perhaps you are unable to meet the quality
standards of the competition.
PART IV | The best business ideas for you | 55