Every entrepreneur while drafting his business plan or strategy presentation will have one slide called SWOT analysis. Lets understand why we need SWOT Analysis for startup.

SWOT analysis gives subjective approach as SWOT analysis does not have any numbers to justify when entrepreneurs are writing SWOT analysis it is just they write what the strengths are of there product and service and the same being for Weakness, Opportunity and Threat.

For a startup company which has not seen daylight or even day of actual operations this SWOT analysis is of not much importance as the founder has written what he feels is strength and so on.

SWOT analysis is used for existing companies which are planning a specific task like penetration of market or launch of new product for which they has a specific industry and there are players in the industry.

Preparing SWOT analysis for existing companies which has been in existence the reason to arrive at Strength and so on arrives from past data and the experience they have undergone in staying and fighting the competition.

Where as in startup entrepreneurs focus on SWOT analysis as big thought process which will help them in raising funds, this analysis is of not importance for a startup as you bench mark existing big company as your threat like for e.g if you are launch a service in distribution then the founder will bench mark in Threat as from existing industry leader.

This has no ground reality and it is no way connected that you launch a service and your threat is from current leader in the industry.