Spotting market opportunities is essential for business growth and survival. Opportunities are factors that contribute to your growing success. These are typically external and include things like:
- economic trends
- market trends
- shifting or expanding customer base
- changes in government or industry regulations
- changes in partnerships or relationship with suppliers, competitors, etc
- new or changing funding prospects (eg increase in grant funding)
One of the best ways of identifying new business opportunities is to complete a SWOT analysis.
Using SWOT analysis to identify business opportunities
A SWOT analysis is one of the most popular strategic analysis tools. It focuses on four key factors affecting your business:
- threats facing your business
A SWOT analysis typically provides you with valuable information about your business. It can help you to identify new opportunities and prospects that you can potentially exploit.
For example, if SWOT analysis shows that your opportunities lie in changing market trends, you may want to respond by introducing new products, altering prices of existing goods, adapting your advertising or adding value to the customer experience.
Find out more about SWOT, PESTLE and other models for strategic analysis or follow best practice in our SWOT analysis example.
Other ways to detect new business opportunities
Other than using a SWOT analysis, to detect new business prospects you can also:
- Segment your customers - divide your customer base into smaller groups that share common characteristics, such as age, gender, location, or lifestyle, attitude or purchasing habits. This allows you to analyse the demand for your products or services and target each segment with specific marketing, promotions and offers, ultimately helping you to seize new business opportunities.
- Analyse your purchase situation - look at distribution channels, payment methods and other factors around purchasing to understand how your customers buy your products or services. Then look at how you can improve them or offer alternatives to bring new customers to your business.
- Analyse your competition - research existing businesses in the market to understand their value proposition and their competitive advantage. Establish your unique selling point to set yourself apart from your competitors. Identify what draws your customers in and promote this.
- Look at other markets - exporting into other countries may open up new opportunities. Consider carefully what the market is like. To increase the likelihood of success, research the competitors, local habits and the likely demand for your products or services.
Consider exploiting other types of business opportunities too. For example, you can:
- franchise your business
- buy an existing business
- find a distributor to increase your market share
- explore licensing, supply chain deals, etc.
Find other strategies to improve sales and profitability.