When I interview very successful entrepreneurs, they often mention the SWOT analysis they did on their business. SWOT is short for Strengths, Weaknesses, Opportunities and Threats. They look at advantages they can shore up, gaps that make them vulnerable to losing customers, new opportunities to pursue and threats that could derail them. These factors help them set priorities and inform the strategy they use to run the business from day to day.
When I read Adam Lashinsky’s piece “Yes, we’re in a tech bubble. Here’s how I know it,” in Fortune (where I am a contributor), it struck me that many freelancers would benefit from doing a SWOT analysis, too. They are always vulnerable to losing important projects if something new goes wrong with the economy. I was a staff editor at a national publication during the dot-com bust and I remember how much our freelance budget dried up.
Many freelancers are unprepared for things to go wrong. Most of us simply try to do a great job on our projects and to find enough of them to pay the bills every week. Doing that is so time consuming that few of us sit down and come up with a Plan B in case the economy hits a big bump.
Hopefully, if there is tech bubble, it won’t pop soon. But Adam’s article reminded me that every freelancer needs to step out of the daily grind and plan for the unexpected. Take 30 minutes this week and do a SWOT analysis on your business.
One common weakness in freelance businesses is being too dependent on one or two customers. If you could not pay the bills if your biggest clients went away, make some efforts to diversify in coming weeks. Spend some time networking. Put up a new advertisement of your services. Look for other types of projects you have not tried before. It takes some juggling to get your daily work done while also doing business development, but it is essential. Having new opportunities in your pipeline at all times means you will be a lot less vulnerable if something unexpected happens.