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3.2 Outside the business
To analyse the opportunities and threats of your proposed business, look at the external environment. What
aspects of the environment will benefit the business and what aspects will negatively affect the business?
Opportunities are on-going potential developments that will be good for your business. It could be that
the demand for the product you are proposing will increase because of an influx of tourists. It could also be
that new regulations enacted by the government for the promotion of green jobs and social enterprises
will result in a higher demand for the type of products that you will provide.
Threats are events that may negatively affect your business. For example, the business idea could be so
simple that other people may start similar businesses in your area and reduce your share of the market.
There could also be proposed legislation affecting the operation of your business, such as restrictions on
the import of certain products.
Once you have identified your SWOT, try matching your Strengths and Opportunities to ascertain whether or
not they will give your business an advantage. For example, if people are looking for a service that matches
your proposed product (Opportunities) and you are very service oriented and care about details (Strengths),
you may be creating a big advantage for your proposed business.
You may also match your Weaknesses and Threats to determine if you can improve your weak points to cope
with the threats. On the other hand, if the two present a major obstacle to the potential for profit, you may
consider deleting that business idea.
Based on the information collected from her field study, Muthoni has chosen the three most suitable ideas:
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Agency for home-based care
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Catering service delivering lunch boxes to offices
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Second-hand clothing store
The table on the next page shows how Muthoni does the SWOT analysis for one of her proposed businesses: A
store selling second-hand clothes to people in the local community.
56 | Generate Your Business Idea
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