is a swot analysis part of a business plan

SWOT Analysis: How To Do One [With Template & Examples]

Published: October 05, 2023

As your business grows, you need a roadmap to help navigate the obstacles, challenges, opportunities, and projects that come your way. Enter: the SWOT analysis.

This framework can help you develop a plan to determine your priorities, maximize opportunities, and minimize roadblocks as you scale your organization. Below, let’s go over exactly what a SWOT analysis is, a few SWOT analysis examples, and how to conduct one for your business.

When you’re done reading, you’ll have all the inspiration and tactical advice you need to tackle a SWOT analysis for your business.

What is a SWOT analysis? Importance of a SWOT Analysis How to Write a Good SWOT Analysis SWOT Analysis Examples How to Act on a SWOT Analysis

What is a SWOT analysis?

A SWOT analysis is a strategic planning technique that puts your business in perspective using the following lenses: Strengths, Weaknesses, Opportunities, and Threats. Using a SWOT analysis helps you identify ways your business can improve and maximize opportunities, while simultaneously determining negative factors that might hinder your chances of success.

While it may seem simple on the surface, a SWOT analysis allows you to make unbiased evaluations on:

• Your business or brand.
• Market positioning.
• A new project or initiative.
• A specific campaign or channel.

Practically anything that requires strategic planning, internal or external, can have the SWOT framework applied to it, helping you avoid unnecessary errors down the road from lack of insight.

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Importance of a SWOT Analysis

You’ve noticed by now that SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. The framework seems simple enough that you’d be tempted to forgo using it at all, relying instead on your intuition to take these things into account.

But you shouldn’t. Doing a SWOT analysis is important. Here’s why.

SWOT gives you the chance to worry and to dream.

A SWOT analysis is an important step in your strategic process because it gives you the opportunity to explore both the potential risks and the exciting possibilities that lie ahead.  You’re giving yourself the space to dream, evaluate, and worry before taking action. Your insights then turn into assets as you create the roadmap for your initiative.

For instance, when you consider the weaknesses and threats that your business may face, you can address any concerns or challenges and strategize on how to mitigate those risks. At the same time, you can identify strengths and opportunities, which can inspire innovative ideas and help you dream big. Both are equally important. 

SWOT forces you to define your variables.

Instead of diving head first into planning and execution, you’re taking inventory of all your assets and roadblocks. This process will help you  develop strategies that leverage your strengths and opportunities while addressing and mitigating the impact of weaknesses and threats.

As a result, you'll gain a comprehensive understanding of your current situation and create a more specific and effective roadmap. Plus, a SWOT analysis is inherently proactive. That means you'll be better equipped to make informed decisions, allocate resources effectively, and set realistic goals. 

SWOT allows you to account for mitigating factors.

As you identify weaknesses and threats, you’re better able to account for them in your roadmap, improving your chances of success.

Moreover, accounting for mitigating factors allows you to allocate your resources wisely and make informed decisions that lead to sustainable growth. With a SWOT analysis as a guide, you can confidently face challenges and seize opportunities.

SWOT helps you keep a written record.

As your organization grows and changes, you’ll be able to strike things off your old SWOTs and make additions. You can look back at where you came from and look ahead at what’s to come.

In other words, SWOT analyses serve as a tangible history of your progress and provide a reference point for future decision-making. With each update, your SWOT analysis becomes a living document that guides your strategic thinking and helps you stay agile and adaptable in an ever-changing business landscape.

By maintaining this written record, you foster a culture of continuous improvement and empower your team to make data-driven decisions and stay aligned with your long-term vision.

Parts of a SWOT Analysis

Conducting a SWOT analysis will help you strategize effectively, unlock valuable insights, and make informed decisions. But what exactly does a SWOT analysis include?

Let’s explore each component: Strengths, Weaknesses, Opportunities, and Threats.

Your strengths are the unique advantages and internal capabilities that give your company a competitive edge in the market. A strong brand reputation, innovative products or services, or exceptional customer service are just a few examples. By identifying and capitalizing on your strengths, you can foster customer loyalty and build a solid foundation for growth.

No business is flawless. Weaknesses are areas where you may face challenges or fall short of your potential. It could be outdated processes, skill gaps within the team, or inadequate resources. By acknowledging these weaknesses, you can establish targeted initiatives for improvement, upskill your team, adopt new technologies, and enhance your overall operational efficiency.

Opportunities are external factors that can contribute to your company's progress. These may include emerging markets, technological advancements, changes in consumer behavior, or gaps in the market that your company can fill. By seizing these opportunities, you can expand your market reach, diversify your product offerings, forge strategic partnerships, or even venture into untapped territories.

Threats are external factors that are beyond your control and pose challenges to your business. Increased competition, economic volatility, evolving regulatory landscapes, or even changing market trends are examples of threats. By proactively assessing and addressing them, you can develop contingency plans, adjust your strategies, and minimize their impact on your operations.

In a SWOT analysis, you’ll have to take both internal and external factors into account. We’ll cover those next.

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SWOT Analysis Internal and External Factors

A SWOT analysis typically has internal (i.e., within your organization) and external (i.e., outside your organization) factors at play. Here's a breakdown of each.

Internal Factors

Internal factors refer to the characteristics and resources within your organization that directly influence its operations and performance. These factors are completely within your organization's control, so they can be modified, improved, or capitalized upon.

In a SWOT analysis, strengths and weaknesses are categorized as internal factors. Let’s look at a few examples.

• Brand reputation
• Unique expertise
• Loyal customer base
• Talented workforce
• Efficient processes
• Proprietary technology
• Outdated technology
• Inadequate resources
• Poor financial health
• Inefficient processes
• Skill gaps within the team

External Factors

External factors are elements outside the organization's control that have an impact on its operations, market position, and success. These factors arise from the industry climate and the broader business environment. You typically have no control over external factors, but you can respond to them.

In a SWOT analysis, opportunities and threats are categorized as external factors. Let’s look at a few examples.

• Emerging markets
• Changing consumer trends
• Technological advancements
• Positive shifts in regulations
• New gaps in the market you could fill
• Intense competition
• Economic downturns
• Disruptive technologies
• Changing regulations
• Negative shifts in consumer behavior

Remember, a well-rounded SWOT analysis empowers you to capitalize on strengths, address weaknesses, seize opportunities, and navigate threats — all while making informed decisions for the future.

Now, let’s take a look at how you can write a good SWOT analysis for yourself or for stakeholders.

How do you write a good SWOT analysis?

There are several steps you’ll want to take when evaluating your business and conducting a strategic SWOT analysis.

1. Download HubSpot's SWOT Analysis Template.

There’s no need to start from scratch for your analysis. Instead, start by downloading a free, editable template from HubSpot. Feel free to use the model yourself, or create your own as it suits your needs.

3. Identify your objective.

Before you start writing things down, you’ll need to figure out what you’re evaluating with your SWOT analysis.

Be specific about what you want to analyze. Otherwise, your SWOT analysis may end up being too broad, and you’ll get analysis paralysis as you are making your evaluations.

If you’re creating a new social media program, you’ll want to conduct an analysis to inform your content creation strategy. If you’re launching a new product, you’ll want to understand its potential positioning in the space. If you’re considering a brand redesign, you’ll want to consider existing and future brand conceptions.

All of these are examples of good reasons to conduct a SWOT analysis. By identifying your objective, you’ll be able to tailor your evaluation to get more actionable insights.

4. Identify your strengths.

“Strengths” refers to what you are currently doing well. Think about the factors that are going in your favor as well as the things you offer that your competitors just can’t beat.

For example, let’s say you want to use a SWOT analysis to evaluate your new social media strategy.

If you’re looking at a new social media program, perhaps you want to evaluate how your brand is perceived by the public. Is it easily recognizable and well-known? Even if it’s not popular with a widespread group, is it well-received by a specific audience?

Next, think about your process: Is it effective or innovative? Is there good communication between marketing and sales?

Finally, evaluate your social media message, and in particular, how it differs from the rest of the industry. I’m willing to bet you can make a lengthy list of some major strengths of your social media strategy over your competitors, so try to dive into your strengths from there.

5. Identify your weaknesses.

In contrast to your strengths, what are the roadblocks hindering you from reaching your goals? What do your competitors offer that continues to be a thorn in your side?

This section isn’t about dwelling on negative aspects. Rather, it’s critical to foresee any potential obstacles that could mitigate your success.

When identifying weaknesses, consider what areas of your business are the least profitable, where you lack certain resources, or what costs you the most time and money. Take input from employees in different departments, as they’ll likely see weaknesses you hadn’t considered.

If you’re examining a new social media strategy, you might start by asking yourself these questions: First, if I were a consumer, what would prevent me from buying this product, or engaging with this business? What would make me click away from the screen?

Second, what do I foresee as the biggest hindrance to my employees’ productivity, or their ability to get the job done efficiently? What derails their social media efforts?

6. Consider your opportunities.

This is your chance to dream big. What are some opportunities for your social media strategy you hope, but don’t necessarily expect, to reach?

For instance, maybe you’re hoping your Facebook ads will attract a new, larger demographic. Maybe you’re hoping your YouTube video gets 10,000 views and increases sales by 10%.

Whatever the case, it’s important to include potential opportunities in your SWOT analysis. Ask yourself these questions:

• What technologies do I want my business to use to make it more effective?
• What new target audience do I want to reach?
• How can the business stand out more in the current industry?
• Is there something our customers complain about that we could fix?

The opportunities category goes hand-in-hand with the weaknesses category. Once you’ve made a list of weaknesses, it should be easy to create a list of potential opportunities that could arise if you eliminate your weaknesses.

7. Contemplate your threats.

It’s likely, especially if you’re prone to worry, you already have a good list of threats in your head.

If not, gather your employees and brainstorm. Start with these questions:

• What obstacles might prevent us from reaching our goals?
• What’s going on in the industry, or with our competitors, that might mitigate our success?
• Is there new technology out there that could conflict with our product?

Writing down your threats helps you evaluate them objectively.

For instance, maybe you list your threats in terms of least and most likely to occur and divide and conquer each. If one of your biggest threats is your competitor’s popular Instagram account, you could work with your marketing department to create content that showcases your product’s unique features.

SWOT Analysis Chart

Download a free SWOT analysis chart included in HubSpot’s free market research kit .

A SWOT analysis doesn’t have to be fancy. Our SWOT analysis chart provides a clear and structured framework for capturing and organizing your internal strengths and weaknesses, and external opportunities and threats. It's the perfect visual aid to make sense of the wealth of information gathered during your analysis.

(Plus, you can always customize and paste it into a document you plan to share with stakeholders.)

But remember: Filling out the SWOT chart is just one step in the process. Combine it with our entire market research kit , and you'll have all the tools necessary to help your organization navigate new opportunities and threats.

SWOT Analysis Examples

The template above helps get you started on your own SWOT analysis.

But, if you’re anything like me, it’s not enough to see a template. To fully understand a concept, you need to see how it plays out in the real world.

These SWOT examples are not exhaustive. However, they are a great starting point to inspire you as you do your own SWOT analysis.

Apple’s SWOT analysis

Here’s how we’d conduct a SWOT analysis on Apple.

First off, strengths. While Apple has many strengths, let’s identify the top three:

• Brand recognition.
• Innovative products.
• Ease of use.

Apple’s brand is undeniably strong, and its business is considered the most valuable in the world . Since it’s easily recognized, Apple can produce new products and almost ensure a certain degree of success by virtue of the brand name itself.

Apple’s highly innovative products are often at the forefront of the industry. One thing that sets Apple apart from the competition is its product inter-connectivity.

For instance, an Apple user can easily sync their iPhone and iPad together. They can access all of their photos, contacts, apps, and more no matter which device they are using.

Lastly, customers enjoy how easy it is to use Apple’s products. With a sleek and simple design, each product is developed so that most people can quickly learn how to use them.

Next, let’s look at three of Apple’s weaknesses.

• High prices
• Closed ecosystem
• Lack of experimentation

While the high prices don’t deter Apple’s middle- and upper-class customer base, they do hinder Apple’s ability to reach a lower-class demographic.

Apple also suffers from its own exclusivity. Apple controls all its services and products in-house, and while many customers become loyal brand advocates for this reason, it means all burdens fall on Apple employees.

Ultimately, Apple’s tight control over who distributes its products limits its market reach.

Lastly, Apple is held to a high standard when it comes to creating and distributing products. Apple’s brand carries a high level of prestige. That level of recognition inhibits Apple from taking risks and experimenting freely with new products that could fail.

Now, let’s take a look at opportunities for Apple.

It’s easy to recognize opportunities for improvement, once you consider Apple’s weaknesses. Here’s a list of three we came up with:

• Expand distribution options.
• Create new product lines.
• Technological advancement.

One of Apple’s biggest weaknesses is its distribution network, which, in the name of exclusivity, remains relatively small. If Apple expanded its network and enabled third-party businesses to sell its products, it could reach more people globally, while alleviating some of the stress currently put on in-house employees.

There are also plenty of opportunities for Apple to create new products. Apple could consider creating more affordable products to reach a larger demographic, or spreading out into new industries — Apple self-driving cars, perhaps?

Finally, Apple could continue advancing its products’ technology. Apple can take existing products and refine them, ensuring each product offers as many unique features as possible.

Finally, let’s look at threats to Apple.

Believe it or not, they do exist.

Here are three of Apple’s biggest threats:

• Tough competition.
• International issues.

Apple isn’t the only innovative tech company out there, and it continues to face tough competition from Samsung, Google, and other major forces. In fact, Samsung sold more smartphones than Apple did in Q1 of 2022 , shipping 17 million more units than Apple and holding 24% of the market share.

Many of Apple’s weaknesses hinder Apple’s ability to compete with the tech corporations that have more freedom to experiment, or that don’t operate in a closed ecosystem.

A second threat to Apple is lawsuits. Apple has faced plenty of lawsuits, particularly between Apple and Samsung . These lawsuits interfere with Apple’s reputable image and could steer some customers to purchase elsewhere.

Finally, Apple needs to improve its reach internationally. The company isn’t number one in China and doesn’t have a very positive relationship with the Chinese government. In India, which has one of the largest consumer markets in the world, Apple’s market share is low , and the company has trouble bringing stores to India’s market.

If Apple can’t compete globally the way Samsung or Google can, it risks falling behind in the industry.

Starbucks SWOT Analysis

Now that we’ve explored the nuances involved with a SWOT analysis, let’s fill out a SWOT template using Starbucks as an example.

Here’s how we’d fill out a SWOT template if we were Starbucks:

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Restaurant Small Business SWOT Analysis

Some small business marketers may have difficulty relating to the SWOTs of big brands like Apple and Starbucks. Here’s an example of how a dine-in Thai restaurant might visualize each element.

Small restaurants can lean into their culinary expertise and service skills to find opportunities for growth and brand awareness. A SWOT analysis can also help identify weaknesses that can be improved, such as menu variation and pricing.

While a restaurant might not be as worried about high-level lawsuits, a small business might be more concerned about competitors or disruptors that might enter the playing field.

Local Boutique SWOT Analysis

In another small business example, let’s take a look at a SWOT analysis for a local boutique.

This shop might be well known in its neighborhood, but it also might take time to build an online presence or get its products in an online store.

Because of this, some of its strengths and opportunities might relate to physical factors while weaknesses and threats might relate to online situations.

How to Act on a SWOT Analysis

After conducting a SWOT analysis, you may be asking yourself: What’s next?

Putting together a SWOT analysis is only one step. Executing the findings identified by the analysis is just as important — if not more.

Put your insights into action using the following steps.

Take advantage of your strengths.

Use your strengths to pursue opportunities from your analysis.

For example, if we look at the local boutique example above, the strength of having affordable prices can be a value proposition. You can emphasize your affordable prices on social media or launch an online store.

Address your weaknesses.

Back to the boutique example, one of its weaknesses is having a poor social media presence. To mitigate this, the boutique could hire a social media consultant to improve its strategy. They may even tap into the expertise of a social-savvy employee.

Make note of the threats.

Threats are often external factors that can’t be controlled, so it’s best to monitor the threats outlined in your SWOT analysis to be aware of their impacts on your business.

When to Use a SWOT Analysis

While the examples above focus on business strategy in general, you can also use a SWOT analysis to evaluate and predict how a singular product will play out in the market.

Ultimately, a SWOT analysis can measure and tackle both big and small challenges, from deciding whether or not to launch a new product to refining your social media strategy.

Editor's note: This post was originally published in May 2018 and has been updated for comprehensiveness.

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SWOT analysis: Examples and templates

A SWOT analysis helps you identify strengths, weaknesses, opportunities, and threats for a specific project or your overall business plan. It’s used for strategic planning and to stay ahead of market trends. Below, we describe each part of the SWOT framework and show you how to conduct your own.

Whether you’re looking for external opportunities or internal strengths, we’ll walk you through how to perform your own SWOT analysis, with helpful examples along the way. 

What is a SWOT analysis?

A SWOT analysis is a technique used to identify strengths, weaknesses, opportunities, and threats for your business or even a specific project. It’s most widely used by organizations—from small businesses and non-profits to large enterprises—but a SWOT analysis can be used for personal purposes as well. 

While simple, a SWOT analysis is a powerful tool for helping you identify competitive opportunities for improvement. It helps you improve your team and business while staying ahead of market trends.

What does SWOT stand for?

SWOT is an acronym that stands for: 

Opportunities

When analyzed together, the SWOT framework can paint a larger picture of where you are and how to get to the next step. Let’s dive a little deeper into each of these terms and how they can help identify areas of improvement. 

Strengths in SWOT refer to internal initiatives that are performing well. Examining these areas helps you understand what’s already working. You can then use the techniques that you know work—your strengths—in other areas that might need additional support, like improving your team’s efficiency . 

When looking into the strengths of your organization, ask yourself the following questions:

What do we do well? Or, even better: What do we do best?

What’s unique about our organization?

What does our target audience like about our organization?

Which categories or features beat out our competitors?

 Example SWOT strength:

Customer service: Our world-class customer service has an NPS score of 90 as compared to our competitors, who average an NPS score of 70.

Weaknesses in SWOT refer to internal initiatives that are underperforming. It’s a good idea to analyze your strengths before your weaknesses in order to create a baseline for success and failure. Identifying internal weaknesses provides a starting point for improving those projects.

Identify the company’s weaknesses by asking:

Which initiatives are underperforming and why?

What can be improved?

What resources could improve our performance?

How do we rank against our competitors?

Example SWOT weakness:

E-commerce visibility: Our website visibility is low because of a lack of marketing budget , leading to a decrease in mobile app transactions.

Opportunities in SWOT result from your existing strengths and weaknesses, along with any external initiatives that will put you in a stronger competitive position. These could be anything from weaknesses that you’d like to improve or areas that weren’t identified in the first two phases of your analysis. 

Since there are multiple ways to come up with opportunities, it’s helpful to consider these questions before getting started:

What resources can we use to improve weaknesses?

Are there market gaps in our services?

What are our business goals for the year?

What do your competitors offer?

Example SWOT opportunities:

Marketing campaign: To improve brand visibility, we’ll run ad campaigns on YouTube, Facebook, and Instagram.

Threats in SWOT are areas with the potential to cause problems. Different from weaknesses, threats are external and ‌out of your control. This can include anything from a global pandemic to a change in the competitive landscape. 

Here are a few questions to ask yourself to identify external threats:

What changes in the industry are cause for concern?

What new market trends are on the horizon?

Where are our competitors outperforming us?

Example SWOT threats:

New competitor: With a new e-commerce competitor set to launch within the next month, we could see a decline in customers.

SWOT analysis example

One of the most popular ways to create a SWOT analysis is through a SWOT matrix—a visual representation of strengths, weaknesses, opportunities, and threats. The matrix comprises four separate squares that create one larger square. 

A SWOT matrix is great for collecting information and documenting the questions and decision-making process . Not only will it be handy to reference later on, but it’s also great for visualizing any patterns that arise. 

Check out the SWOT matrix below for a simple example. As you can see, each of the quadrants lists out the company's strengths, weaknesses, opportunities, and threats.

When used correctly and effectively, your matrix can be a great toolkit for evaluating your organization’s strengths and weaknesses. 

How to do a SWOT analysis, with examples 

A SWOT analysis can be conducted in a variety of ways. Some teams like to meet and throw ideas on a whiteboard, while others prefer the structure of a SWOT matrix. However you choose to make your SWOT analysis, getting creative with your planning process allows new ideas to flow and results in more unique solutions. 

There are a few ways to ensure that your SWOT analysis is thorough and done correctly. Let’s take a closer look at some tips to help you get started.

Tip 1: Consider internal factors 

Often, strengths and weaknesses stem from internal processes. These tend to be easier to solve since you have more control over the outcome. When you come across internal factors, you can start implementing improvements in a couple of different ways.

Meet with department stakeholders to form a business plan around how to improve your current situation.

Research and implement new tools, such as a project management tool , that can help streamline these processes for you. 

Take immediate action on anything that can be changed in 24 hours or less. If you don’t have the capacity, consider delegating these items to others with deadlines. 

The way you go about solving internal factors will depend on the type of problem. If it’s more complex, you might need to use a combination of the above or a more thorough problem management process.

Tip 2: Evaluate external factors

External factors stem from processes outside of your control. This includes competitors, market trends, and anything else that’s affecting your organization from the outside in. 

External factors are trickier to solve, as you can’t directly control the outcome. What you can do is pivot your own processes in a way that mitigates negative external factors. 

You can work to solve these issues by:

Competing with market trends

Forecasting market trends before they happen

Improving adaptability to improve your reaction time

Track competitors using reporting tools that automatically update you as soon as changes occur 

While you won’t be able to control an external environment, you can control how your organization reacts to it. 

Let’s say, for instance, that you’re looking to compete with a market trend. For example, a competitor introduced a new product to the market that’s outperforming your own. While you can’t take that product away, you can work to launch an even better product or marketing campaign to mitigate any decline in sales. 

Tip 3: Hold a brainstorming session

Brainstorming new and innovative ideas can help to spur creativity and inspire action. To host a high impact brainstorming session, you’ll want to: 

Invite team members from various departments. That way, ideas from each part of the company are represented. 

Be intentional about the number of team members you invite, since too many participants could lead to a lack of focus or participation. The sweet spot for a productive brainstorming session is around 10 teammates. 

Use different brainstorming techniques that appeal to different work types.

Set a clear intention for the session.

Tip 4: Get creative

In order to generate creative ideas, you have to first invite them. That means creating fun ways to come up with opportunities. Try randomly selecting anonymous ideas, talking through obviously bad examples, or playing team building games to psych up the team.

Tip 5: Prioritize opportunities

Now, rank the opportunities. This can be done as a team or with a smaller group of leaders. Talk through each idea and rank it on a scale of one through 10. Once you’ve agreed on your top ideas based on team capabilities, competencies, and overall impact, it’s easier to implement them.

Tip 6: Take action

It’s all too easy to feel finished at this stage —but the actual work is just beginning. After your SWOT analysis, you’ll have a list of prioritized opportunities. Now is the time to turn them into strengths. Use a structured system such as a business case , project plan, or implementation plan to outline what needs to get done—and how you plan to do it.

SWOT analysis template

A SWOT analysis template is often presented in a grid format, divided into four quadrants. Each quadrant represents one of the four elements. 

Use this free SWOT analysis template to jump-start your team’s strategic planning.

Identify the strengths that contribute to achieving your objectives. These are internal characteristics that give you an advantage. Some examples could be a strong brand reputation, an innovative culture, or an experienced management team.

Next, focus on weaknesses. These are internal factors that could serve as obstacles to achieving your objectives. Common examples might include a lack of financial resources, high operational costs, or outdated technology. 

Move on to the opportunities. These are external conditions that could be helpful in achieving your goals. For example, you might be looking at emerging markets, increased demand, or favorable shifts in regulations.

Lastly, let's address threats. These are external conditions that could negatively impact your objectives. Examples include increased competition or potential economic downturns.

Why is a SWOT analysis important?

A SWOT analysis can help you improve processes and plan for growth. While similar to a competitive analysis , it differs because it evaluates both internal and external factors. Analyzing key areas around these opportunities and threats will equip you with the insights needed to set your team up for success.

A SWOT analysis isn’t only useful for organizations. With a personal SWOT analysis, you can examine areas of your life that could benefit from improvement, from your leadership style to your communication skills. These are the benefits of using a SWOT analysis in any scenario. 

1. Identifies areas of opportunity

One of the biggest benefits of conducting an analysis is to determine opportunities for growth. It’s a great starting point for startups and teams that know they want to improve but aren’t exactly sure how to get started. 

Opportunities can come from many different avenues, like external factors such as diversifying your products for competitive advantage or internal factors like improving your team’s workflow . Either way, capitalizing on opportunities is an excellent way to grow as a team.

2. Identifies areas that could be improved

Identifying weaknesses and threats during a SWOT analysis can pave the way for a better business strategy.

Ultimately, learning from your mistakes is the best way to excel. Once you find areas to streamline, you can work with team members to brainstorm an action plan . This will let you use what you already know works and build on your company’s strengths.

3. Identifies areas that could be at risk

Whether you have a risk register in place or not, it’s always crucial to identify risks before they become a cause for concern. A SWOT analysis can help you stay on top of actionable items that may play a part in your risk decision-making process. 

It may be beneficial to pair your SWOT analysis with a PEST analysis, which examines external solutions such as political, economic, social, and technological factors—all of which can help you identify and plan for project risks .

When should you use a SWOT analysis?

You won’t always need an in-depth SWOT analysis. It’s most useful for large, general overviews of situations, scenarios, or your business.

A SWOT analysis is most helpful:

Before you implement a large change—including as part of a larger change management plan

When you launch a new company initiative

If you’d like to identify opportunities for growth and improvement

Any time you want a full overview of your business performance

If you need to identify business performance from different perspectives

SWOT analyses are general for a reason—so they can be applied to almost any scenario, project, or business. 

SWOT analysis: Pros and cons

Although SWOT is a useful strategic planning tool for businesses and individuals alike, it does have limitations. Here’s what you can expect.

The simplicity of SWOT analysis makes it a go-to tool for many. Because it is simple, it takes the mystery out of strategic planning and lets people think critically about their situations without feeling overwhelmed. 

For instance, a small bakery looking to expand its operations can use SWOT analysis to easily understand its current standing. Identifying strengths like a loyal customer base, weaknesses such as limited seating space, opportunities like a rising trend in artisanal baked goods, and threats from larger chain bakeries nearby can all be accomplished without any specialized knowledge or technical expertise.

Versatility

Its versatile nature allows SWOT analysis to be used across various domains. Whether it’s a business strategizing for the future or an individual planning their career path, SWOT analysis lends itself well. 

For example, a tech start-up in the competitive Silicon Valley landscape could employ SWOT to navigate its pathway to profitability. Strengths might include a highly skilled development team; weaknesses could be a lack of brand recognition; opportunities might lie in emerging markets; and threats could include established tech giants. 

Meaningful analysis

SWOT excels in identifying external factors that could impact performance. It nudges organizations to look beyond the present and anticipate potential future scenarios. 

A retail company, for example, could use SWOT analysis to identify opportunities in e-commerce and threats from changing consumer behavior or new competitors entering the market. By doing so, the company can strategize on how to leverage online platforms to boost sales and counteract threats by enhancing the customer experience or adopting new technologies.

Subjectivity and bias

The subjective nature of SWOT analysis may lead to biases. It relies heavily on individual perceptions, which can sometimes overlook crucial data or misinterpret information, leading to skewed conclusions. 

For example, a manufacturing company might undervalue the threat of new entrants in the market due to an overconfidence bias among the management. This subjectivity might lead to a lack of preparation for competitive pricing strategies, ultimately affecting the company's market share.

Lack of prioritization

SWOT analysis lays out issues but falls short on prioritizing them. Organizations might struggle to identify which elements deserve immediate attention and resources. 

For instance, a healthcare provider identifying numerous opportunities for expansion into new services may become overwhelmed with the choices. Without a clear way to rank these opportunities, resources could be spread too thinly or given to projects that do not have as much of an impact, leading to less-than-ideal outcomes.

Static analysis

Since SWOT analysis captures a snapshot at a particular moment, it may miss the evolving nature of challenges and opportunities, possibly leading to outdated strategies. An example could be a traditional retail business that performs a SWOT analysis and decides to focus on expanding physical stores, overlooking the growing trend of e-commerce. As online shopping continues to evolve and gain popularity, the static analysis might lead to investment in areas with diminishing returns while missing out on the booming e-commerce market trend.

SWOT analysis FAQ

What are the five elements of swot analysis.

Traditionally, SWOT stands for its four main elements: strengths, weaknesses, opportunities, and threats. However, a fifth essential element often overlooked is "actionable strategies." Originally developed by Albert Humphrey, SWOT is more than just a list—it's a planning tool designed to generate actionable strategies for making informed business decisions. This fifth element serves to tie the other four together, enabling departments like human resources and marketing to turn analysis into actionable plans.

What should a SWOT analysis include?

A comprehensive SWOT analysis should focus on the internal and external factors that affect your organization. Internally, consider your strong brand and product line as your strengths, and maybe your supply chain weaknesses. Externally, you'll want to look at market share, partnerships, and new technologies that could either pose opportunities or threats. You should also account for demographics, as it helps in market targeting and segmentation.

How do you write a good SWOT analysis?

Writing an effective SWOT analysis begins with research. Start by identifying your strengths, like a strong brand, and your weaknesses, like a small human resources department. Following that, look outward to find opportunities, possibly in technological advancement, and threats, like fluctuations in market share. Many businesses find it helpful to use a free SWOT analysis template to structure this information. A good SWOT analysis doesn't just list these elements; it integrates them to provide a clear roadmap for making business decisions.

What are four examples of threats in SWOT analysis?

New technologies: Rapid technological advancement can make your product or service obsolete.

Supply chain disruptions: Whether due to natural disasters or geopolitical tensions, an unstable supply chain can seriously jeopardize your operations.

Emerging competitors: New players entering the market can erode your market share and offer alternative solutions to your customer base.

Regulatory changes: New laws or regulations can add costs and complexity to your business, affecting your competitiveness.

How do you use a SWOT analysis?

Once you've completed a SWOT analysis, use the results as a decision-making aid. It can help prioritize actions, develop strategic plans that play to your strengths, improve weaknesses, seize opportunities, and counteract threats. It’s a useful tool for setting objectives and creating a roadmap for achieving them.

Plan for growth with a SWOT analysis

A SWOT analysis can be an effective technique for identifying key strengths, weaknesses, opportunities, and threats. Understanding where you are now can be the most impactful way to determine where you want to go next. 

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What Is SWOT Analysis?

Understanding swot analysis, how to do a swot analysis, the bottom line.

• Fundamental Analysis

SWOT Analysis: How To With Table and Example

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Ariel Courage is an experienced editor, researcher, and former fact-checker. She has performed editing and fact-checking work for several leading finance publications, including The Motley Fool and Passport to Wall Street.

SWOT (strengths, weaknesses, opportunities, and threats) analysis is a framework used to evaluate a company's competitive position and to develop strategic planning. SWOT analysis assesses internal and external factors, as well as current and future potential.

A SWOT analysis is designed to facilitate a realistic, fact-based, data-driven look at the strengths and weaknesses of an organization, initiatives, or within its industry. The organization needs to keep the analysis accurate by avoiding pre-conceived beliefs or gray areas and instead focusing on real-life contexts. Companies should use it as a guide and not necessarily as a prescription.

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Key Takeaways

• SWOT analysis is a strategic planning technique that provides assessment tools.
• Identifying core strengths, weaknesses, opportunities, and threats leads to fact-based analysis, fresh perspectives, and new ideas.
• A SWOT analysis pulls information internal sources (strengths of weaknesses of the specific company) as well as external forces that may have uncontrollable impacts to decisions (opportunities and threats).
• SWOT analysis works best when diverse groups or voices within an organization are free to provide realistic data points rather than prescribed messaging.
• Findings of a SWOT analysis are often synthesized to support a single objective or decision that a company is facing.

Investopedia / Xiaojie Liu

SWOT analysis is a technique for assessing the performance, competition, risk, and potential of a business, as well as part of a business such as a product line or division, an industry, or other entity.

Using internal and external data , the technique can guide businesses toward strategies more likely to be successful, and away from those in which they have been, or are likely to be, less successful. Independent SWOT analysts, investors, or competitors can also guide them on whether a company, product line, or industry might be strong or weak and why.

SWOT analysis was first used to analyze businesses. Now, it's often used by governments, nonprofits, and individuals, including investors and entrepreneurs. There is seemingly limitless applications to the SWOT analysis.

Components of SWOT Analysis

Every SWOT analysis will include the following four categories. Though the elements and discoveries within these categories will vary from company to company, a SWOT analysis is not complete without each of these elements:

Strengths describe what an organization excels at and what separates it from the competition : a strong brand, loyal customer base, a strong balance sheet, unique technology, and so on. For example, a hedge fund may have developed a proprietary trading strategy that returns market-beating results. It must then decide how to use those results to attract new investors.

Weaknesses stop an organization from performing at its optimum level. They are areas where the business needs to improve to remain competitive: a weak brand, higher-than-average turnover, high levels of debt, an inadequate supply chain, or lack of capital.

Opportunities

Opportunities refer to favorable external factors that could give an organization a competitive advantage. For example, if a country cuts tariffs, a car manufacturer can export its cars into a new market, increasing sales and market share .

Threats refer to factors that have the potential to harm an organization. For example, a drought is a threat to a wheat-producing company, as it may destroy or reduce the crop yield. Other common threats include things like rising costs for materials, increasing competition, tight labor supply. and so on.

Analysts present a SWOT analysis as a square segmented into four quadrants, each dedicated to an element of SWOT. This visual arrangement provides a quick overview of the company’s position. Although all the points under a particular heading may not be of equal importance, they all should represent key insights into the balance of opportunities and threats, advantages and disadvantages, and so forth.

The SWOT table is often laid out with the internal factors on the top row and the external factors on the bottom row. In addition, the items on the left side of the table are more positive/favorable aspects, while the items on the right are more concerning/negative elements.

A SWOT analysis can be broken into several steps with actionable items before and after analyzing the four components. In general, a SWOT analysis will involve the following steps.

Step 1: Determine Your Objective

A SWOT analysis can be broad, though more value will likely be generated if the analysis is pointed directly at an objective. For example, the objective of a SWOT analysis may focused only on whether or not to perform a new product rollout . With an objective in mind, a company will have guidance on what they hope to achieve at the end of the process. In this example, the SWOT analysis should help determine whether or not the product should be introduced.

Step 2: Gather Resources

Every SWOT analysis will vary, and a company may need different data sets to support pulling together different SWOT analysis tables. A company should begin by understanding what information it has access to, what data limitations it faces, and how reliable its external data sources are.

In addition to data, a company should understand the right combination of personnel to have involved in the analysis. Some staff may be more connected with external forces, while various staff within the manufacturing or sales departments may have a better grasp of what is going on internally. Having a broad set of perspectives is also more likely to yield diverse, value-adding contributions.

Step 3: Compile Ideas

For each of the four components of the SWOT analysis, the group of people assigned to performing the analysis should begin listing ideas within each category. Examples of questions to ask or consider for each group are in the table below.

Internal Factors

What occurs within the company serves as a great source of information for the strengths and weaknesses categories of the SWOT analysis. Examples of internal factors include financial and human resources , tangible and intangible (brand name) assets, and operational efficiencies.

Potential questions to list internal factors are:

• (Strength) What are we doing well?
• (Strength) What is our strongest asset?
• (Weakness) What are our detractors?
• (Weakness) What are our lowest-performing product lines?

External Factors

What happens outside of the company is equally as important to the success of a company as internal factors. External influences, such as monetary policies , market changes, and access to suppliers, are categories to pull from to create a list of opportunities and weaknesses.

Potential questions to list external factors are:

• (Opportunity) What trends are evident in the marketplace?
• (Opportunity) What demographics are we not targeting?
• (Threat) How many competitors exist, and what is their market share?
• (Threat) Are there new regulations that potentially could harm our operations or products?

Companies may consider performing this step as a "white-boarding" or "sticky note" session. The idea is there is no right or wrong answer; all participants should be encouraged to share whatever thoughts they have. These ideas can later be discarded; in the meantime, the goal should be to come up with as many items as possible to invoke creativity and inspiration in others.

Step 4: Refine Findings

With the list of ideas within each category, it is now time to clean-up the ideas. By refining the thoughts that everyone had, a company can focus on only the best ideas or largest risks to the company. This stage may require substantial debate among analysis participants, including bringing in upper management to help rank priorities.

Step 5: Develop the Strategy

Armed with the ranked list of strengths, weaknesses, opportunities, and threats, it is time to convert the SWOT analysis into a strategic plan. Members of the analysis team take the bulleted list of items within each category and create a synthesized plan that provides guidance on the original objective.

For example, the company debating whether to release a new product may have identified that it is the market leader for its existing product and there is the opportunity to expand to new markets. However, increased material costs, strained distribution lines, the need for additional staff, and unpredictable product demand may outweigh the strengths and opportunities. The analysis team develops the strategy to revisit the decision in six months in hopes of costs declining and market demand becoming more transparent.

Use a SWOT analysis to identify challenges affecting your business and opportunities that can enhance it. However, note that it is one of many techniques, not a prescription.

Benefits of SWOT Analysis

A SWOT analysis won't solve every major question a company has. However, there's a number of benefits to a SWOT analysis that make strategic decision-making easier.

• A SWOT analysis makes complex problems more manageable. There may be an overwhelming amount of data to analyze and relevant points to consider when making a complex decision. In general, a SWOT analysis that has been prepared by paring down all ideas and ranking bullets by importance will aggregate a large, potentially overwhelming problem into a more digestible report.
• A SWOT analysis requires external consider. Too often, a company may be tempted to only consider internal factors when making decisions. However, there are often items out of the company's control that may influence the outcome of a business decision. A SWOT analysis covers both the internal factors a company can manage and the external factors that may be more difficult to control.
• A SWOT analysis can be applied to almost every business question. The analysis can relate to an organization, team, or individual. It can also analyze a full product line , changes to brand, geographical expansion, or an acquisition. The SWOT analysis is a versatile tool that has many applications.
• A SWOT analysis leverages different data sources. A company will likely use internal information for strengths and weaknesses. The company will also need to gather external information relating to broad markets, competitors, or macroeconomic forces for opportunities and threats. Instead of relying on a single, potentially biased source, a good SWOT analysis compiles various angles.
• A SWOT analysis may not be overly costly to prepare. Some SWOT reports do not need to be overly technical; therefore, many different staff members can contribute to its preparation without training or external consulting.

SWOT Analysis Example

In 2015, a Value Line SWOT analysis of The Coca-Cola Company noted strengths such as its globally famous brand name, vast distribution network, and opportunities in emerging markets. However, it also noted weaknesses and threats such as foreign currency fluctuations, growing public interest in "healthy" beverages, and competition from healthy beverage providers.

Its SWOT analysis prompted Value Line to pose some tough questions about Coca-Cola's strategy, but also to note that the company "will probably remain a top-tier beverage provider" that offered conservative investors "a reliable source of income and a bit of capital gains exposure."

Five years later, the Value Line SWOT analysis proved effective as Coca-Cola remains the 6th strongest brand in the world (as it was then). Coca-Cola's shares (traded under ticker symbol KO) have increased in value by over 60% during the five years after the analysis was completed.

To get a better picture of a SWOT analysis, consider the example of a fictitious organic smoothie company. To better understand how it competes within the smoothie market and what it can do better, it conducted a SWOT analysis. Through this analysis, it identified that its strengths were good sourcing of ingredients, personalized customer service, and a strong relationship with suppliers. Peering within its operations, it identified a few areas of weakness: little product diversification, high turnover rates, and outdated equipment.

Examining how the external environment affects its business, it identified opportunities in emerging technology, untapped demographics, and a culture shift towards healthy living. It also found threats, such as a winter freeze damaging crops, a global pandemic, and kinks in the supply chain. In conjunction with other planning techniques, the company used the SWOT analysis to leverage its strengths and external opportunities to eliminate threats and strengthen areas where it is weak.

What Is an Example of SWOT Analysis?

Home Depot conducted a SWOT analysis, creating a balanced list of its internal advantages and disadvantages and external factors threatening its market position and growth strategy. High-quality customer service, strong brand recognition, and positive relationships with suppliers were some of its notable strengths; whereas, a constricted supply chain, interdependence on the U.S. market, and a replicable business model were listed as its weaknesses.

Closely related to its weaknesses, Home Depot's threats were the presence of close rivals, available substitutes, and the condition of the U.S. market. It found from this study and other analysis that expanding its supply chain and global footprint would be key to its growth.

What Are the 4 Steps of SWOT Analysis?

The four steps of SWOT analysis comprise the acronym SWOT: strengths, weaknesses, opportunities, and threats. These four aspects can be broken into two analytical steps. First, a company assesses its internal capabilities and determines its strengths and weaknesses. Then, a company looks outward and evaluates external factors that impact its business. These external factors may create opportunities or threaten existing operations.

How Do You Write a Good SWOT Analysis?

Creating a SWOT analysis involves identifying and analyzing the strengths, weaknesses, opportunities, and threats of a company. It is recommended to first create a list of questions to answer for each element. The questions serve as a guide for completing the SWOT analysis and creating a balanced list. The SWOT framework can be constructed in list format, as free text, or, most commonly, as a 4-cell table, with quadrants dedicated to each element. Strengths and weaknesses are listed first, followed by opportunities and threats.

Why Is SWOT Analysis Used?

A SWOT analysis is used to strategically identify areas of improvement or competitive advantages for a company. In addition to analyzing thing that a company does well, SWOT analysis takes a look at more detrimental, negative elements of a business. Using this information, a company can make smarter decisions to preserve what it does well, capitalize on its strengths, mitigate risk regarding weaknesses, and plan for events that may adversely affect the company in the future.

A SWOT analysis is a great way to guide business-strategy meetings. It's powerful to have everyone in the room discuss the company's core strengths and weaknesses, define the opportunities and threats, and brainstorm ideas. Oftentimes, the SWOT analysis you envision before the session changes throughout to reflect factors you were unaware of and would never have captured if not for the group’s input.

A company can use a SWOT for overall business strategy sessions or for a specific segment such as marketing, production, or sales. This way, you can see how the overall strategy developed from the SWOT analysis will filter down to the segments below before committing to it. You can also work in reverse with a segment-specific SWOT analysis that feeds into an overall SWOT analysis.

Although a useful planning tool, SWOT has limitations. It is one of several business planning techniques to consider and should not be used alone. Also, each point listed within the categories is not prioritized the same. SWOT does not account for the differences in weight. Therefore, a deeper analysis is needed, using another planning technique.

Business News Daily. " SWOT Analysis: What It Is and When to Use It ."

Seeking Alpha. " The Coca-Cola Company: A Short SWOT Analysis ."

Panmore. " Home Depot SWOT Analysis & Recommendations ."

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Frequently Asked Questions

Swot analysis: how to strengthen your business plan.

Introduction

Every business, big or small needs a solid plan to succeed. A well-constructed business plan takes into account the strengths and weaknesses of a company and the opportunities and threats present in the marketplace. One of the most useful tools for assessing these factors is the SWOT analysis as it provides a comprehensive overview of a company's current situation and potential for growth. In this article, we will discuss what a SWOT analysis is, why it is important for businesses, who should conduct it, and how to conduct it effectively.

What is a SWOT analysis?

Have you ever wondered how businesses manage to evaluate all the internal and external factors that could affect their success? Welcome to the SWOT analysis. It's a strategic planning tool that helps businesses identify their Strengths, Weaknesses, Opportunities, and Threats.

Strengths refer to internal factors that give a company an edge over its competitors. Think of a strong brand, loyal customer base, experienced employees, or efficient operations. Weaknesses, on the other hand, are internal factors that put a company at a disadvantage. These could be a weak brand, lack of funding, inexperienced employees, or outdated technology .

But what about external factors that could impact a business's success? That's where Opportunities and Threats come in. Opportunities are external factors that could help a company grow and succeed. This could include a growing market, new trends, technological advancements, or changes in regulations. Threats, on the other hand, are external factors that could harm a company's growth and success. Examples of threats could be economic downturns, increased competition, changes in consumer behavior, or natural disasters.

By conducting a SWOT analysis, businesses can make informed decisions about their strategic initiatives. By focusing their resources on areas with the greatest potential for growth and competitive advantage, businesses can increase their profitability, market share, and long-term success. So, whether you're a business strategist, executive, manager, or consultant, SWOT analysis can provide a fresh perspective on your company's current situation and potential for growth .

Why is a SWOT analysis important for businesses?

A SWOT analysis is essential for developing a business plan that maximizes a company's strengths, minimizes its weaknesses, and takes advantage of opportunities while mitigating threats.

Here are some of the reasons why a SWOT analysis is important for businesses:

• Identifies key areas for improvement By conducting the SWOT analysis, businesses can gain a better understanding of their internal weaknesses and external threats, which enables them to prioritize areas for improvement. They can then focus their resources and efforts on those areas, which can help them become more competitive and improve their overall performance.
• Maximizes the strength of businesses In addition to identifying areas for improvement, SWOT analysis also helps businesses identify their strengths. By leveraging these strengths, businesses can differentiate themselves from their competitors and take advantage of their competitive advantages. This can lead to increased market share, improved profitability, and overall success.
• Mitigates threats SWOT analysis can help businesses identify potential threats to their operations and take proactive measures to mitigate them. This could include diversifying their product or service offerings, investing in risk management strategies, or developing contingency plans to minimize the impact of unforeseen events.
• Takes advantage of potential opportunities In addition to mitigating threats, SWOT analysis can also help businesses identify potential opportunities for growth and success. By capitalizing on these opportunities, businesses can increase their market share, expand their customer base, and improve their overall performance.
• Provides a comprehensive overview Finally, SWOT analysis provides a comprehensive overview of a company's internal and external factors. This can help businesses develop a well-informed business plan that takes into account their current situation and potential for growth. By developing a strategic plan based on the SWOT analysis, businesses can increase their chances of success and achieve their long-term goals.

How to conduct a SWOT analysis?

Now that we know what a SWOT analysis is and why it is important for businesses, let's discuss how to conduct a SWOT analysis effectively. Here are the steps involved:

• Define the objective: The first step in conducting a SWOT analysis is to define the objective. What is the purpose of the analysis? What are the specific goals that the analysis aims to achieve? Defining the objective will help focus the analysis and ensure that it is relevant to the specific needs of the business.
• Gather information: Once you have defined the objective, the next step is to gather information about the business, its industry, and its competitors. This can include things like financial reports, customer feedback, market research, and competitor analysis.
• Identify strengths: What are the things that the business does well? What advantages does it have over its competitors? This can include things like a strong brand, loyal customer base, experienced employees, and efficient operations.
• Identify weaknesses: The next step is to identify the weaknesses of the business. What are the areas that need improvement? What disadvantages does it have compared to its competitors? This can include things like a weak brand, lack of funding, inexperienced employees, and outdated technology.
• Identify opportunities: To identify the opportunities available to the business , you need to address questions such as, What are the trends in the industry? What changes in regulations could benefit the business? What new technologies are emerging? This can include things like a growing market, new trends, technological advancements, and changes in regulations.
• Identify threats: The final step is to identify the threats to the business. What are the economic, social, and environmental factors that could impact the business negatively? What are the risks associated with the current situation and potential growth opportunities? This can include things like economic downturns, increased competition, changes in consumer behavior, and natural disasters.

Once the SWOT analysis is complete, the next step is to use the information to develop a strategic plan that maximizes the strengths of the business, minimizes its weaknesses, takes advantage of opportunities, and mitigates threats.

Who should conduct a SWOT analysis and what are the benefits?

A SWOT analysis can be conducted by anyone involved in the strategic planning process of a business. This can include business strategists , executives, managers, and consultants. Here are some of the benefits of conducting a SWOT analysis:

• Provides a fresh perspective on a company's strengths, weaknesses, opportunities, and threats, allowing for a more objective view of the situation.
• Facilitates strategic decision-making that enables businesses to make informed strategic decisions based on their current situation and potential for growth.
• Helps prioritize action items based on their importance and potential impact to the business.
• Encourages collaboration among team members, allowing for a more comprehensive analysis of the situation.
• Enables risk assessment associated with their current situation and potential growth opportunities.
• Improves communication among team members, ensuring that everyone is on the same page regarding the current situation and potential for growth.

This information helps businesses to prioritize their key strategic initiatives, focus their resources on areas with the greatest potential for growth and competitive advantage, and develop a strategic plan that aligns with their goals and objectives. Ultimately, a SWOT analysis helps businesses to make more effective strategic decisions that can lead to increased profitability, market share, and long-term success.

Example of a SWOT analysis

To help illustrate the SWOT analysis process, let's take a look at an example of a SWOT analysis for a company in the fashion industry:

• Strong brand recognition
• Innovative designs
• Loyal customer base
• Experienced and skilled designers and staff
• Efficient production processes
• Limited distribution channels
• Dependence on a few key suppliers
• High production costs
• Lack of international presence
• Limited online presence

Opportunities

• Growing demand for sustainable fashion
• Emerging markets in Asia and South America
• Expansion into e-commerce
• Partnership with influencers and celebrities
• Diversification of product offerings
• Economic downturns and recessions
• Increased competition from established and emerging brands
• Shifting consumer preferences and trends
• Changes in regulations and trade policies
• Disruptive technologies and innovations

Using this SWOT analysis, the company could focus on expanding its distribution channels and international presence, reducing production costs, and investing in sustainable and diverse product offerings.

Q: Is a SWOT analysis only for large businesses? A: No, a SWOT analysis is beneficial for businesses of all sizes, including small businesses.

Q: Can a SWOT analysis be conducted for a specific project or product? A: Yes, a SWOT analysis can be conducted for a specific project or product to evaluate its strengths, weaknesses, opportunities, and threats.

Q: How often should a SWOT analysis be conducted? A: It is recommended to conduct a SWOT analysis at least once a year or whenever there are significant changes in the industry, competition, or business environment.

Q: What should I do with the information gathered from a SWOT analysis? A: The information gathered from a SWOT analysis should be used to develop a strategic plan that maximizes strengths, minimizes weaknesses, takes advantage of opportunities, and mitigates threats.

In conclusion, a SWOT analysis is an important tool that can help businesses of all sizes and industries to identify their strengths, weaknesses, opportunities, and threats. By conducting a SWOT analysis, businesses can gain a better understanding of their current situation and potential growth opportunities, enabling them to make informed business decisions and develop effective business strategies. As a strategic leader or business strategist, it is important to conduct a SWOT analysis regularly to stay up-to-date with changes in the industry and competition, and ensure that your business plan is relevant and effective in achieving your business goals.

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What Is a SWOT Analysis and How to Do It Right (With Examples)

Posted february 2, 2021 by noah parsons.

A SWOT analysis is an incredibly simple, yet powerful tool to help you develop your business strategy, whether you’re building a startup or guiding an existing company.

What is a SWOT Analysis?

SWOT stands for Strengths, Weaknesses, Opportunities, and Threats.

Strengths and weaknesses are internal to your company—things that you have some control over and can change. Examples include who is on your team, your patents and intellectual property, and your location.

Opportunities and threats are external—things that are going on outside your company, in the larger market. You can take advantage of opportunities and protect against threats, but you can’t change them. Examples include competitors, prices of raw materials, and customer shopping trends.

A SWOT analysis organizes your top strengths, weaknesses, opportunities, and threats into an organized list and is usually presented in a simple two-by-two grid. Go ahead and download our free template if you just want to dive right in and get started.

Why do a SWOT Analysis?

When you take the time to do a SWOT analysis, you’ll be armed with a solid strategy for prioritizing the work that you need to do to grow your business.

You may think that you already know everything that you need to do to succeed, but a SWOT analysis will force you to look at your business in new ways and from new directions. You’ll look at your strengths and weaknesses, and how you can leverage those to take advantage of the opportunities and threats that exist in your market.

Who should do a SWOT Analysis?

For a SWOT analysis to be effective, company founders and leaders need to be deeply involved. This isn’t a task that can be delegated to others.

But, company leadership shouldn’t do the work on their own , either. For best results, you’ll want to gather a group of people who have different perspectives on the company. Select people who can represent different aspects of your company, from sales and customer service to marketing and product development. Everyone should have a seat at the table.

Innovative companies even look outside their own internal ranks when they perform a SWOT analysis and get input from customers to add their unique voice to the mix.

If you’re starting or running a business on your own, you can still do a SWOT analysis. Recruit additional points of view from friends who know a little about your business, your accountant, or even vendors and suppliers. The key is to have different points of view.

Existing businesses can use a SWOT analysis to assess their current situation and determine a strategy to move forward . But, remember that things are constantly changing and you’ll want to reassess your strategy, starting with a new SWOT analysis every six to 12 months.

For startups, a SWOT analysis is part of the business planning process. It’ll help codify a strategy so that you start off on the right foot and know the direction that you plan to go.

How to do a SWOT analysis the right way

As I mentioned above, you want to gather a team of people together to work on a SWOT analysis. You don’t need an all-day retreat to get it done, though. One or two hours should be more than plenty.

1. Gather the right people

Gather people from different parts of your company and make sure that you have representatives from every department and team. You’ll find that different groups within your company will have entirely different perspectives that will be critical to making your SWOT analysis successful.

2. Throw your ideas at the wall

Doing a SWOT analysis is similar to brainstorming meetings, and there are right and wrong ways to run them. I suggest giving everyone a pad of sticky-notes and have everyone quietly generate ideas on their own to start things off. This prevents groupthink and ensures that all voices are heard.

After five to 10 minutes of private brainstorming, put all the sticky-notes up on the wall and group similar ideas together. Allow anyone to add additional notes at this point if someone else’s idea sparks a new thought.

3. Rank the ideas

Once all of the ideas are organized, it’s time to rank the ideas. I like using a voting system where everyone gets five or ten “votes” that they can distribute in any way they like. Sticky dots in different colors are useful for this portion of the exercise.

Based on the voting exercise, you should have a prioritized list of ideas. Of course, the list is now up for discussion and debate, and someone in the room should be able to make the final call on the priority. This is usually the CEO, but it could be delegated to someone else in charge of business strategy.

You’ll want to follow this process of generating ideas for each of the four quadrants of your SWOT analysis: Strengths, Weaknesses, Opportunities, and Threats.

Questions that can help inspire your analysis

Here are a few questions that you can ask your team when you’re building your SWOT analysis. These questions can help explain each section and spark creative thinking.

Strengths are internal, positive attributes of your company. These are things that are within your control.

• What business processes are successful?
• What assets do you have in your teams? (ie. knowledge, education, network, skills, and reputation)
• What physical assets do you have, such as customers, equipment, technology, cash, and patents?
• What competitive advantages do you have over your competition?

Weaknesses are negative factors that detract from your strengths. These are things that you might need to improve on to be competitive.

• Are there things that your business needs to be competitive?
• What business processes need improvement?
• Are there tangible assets that your company needs, such as money or equipment?
• Are there gaps on your team?
• Is your location ideal for your success?

Opportunities

Opportunities are external factors in your business environment that are likely to contribute to your success.

• Is your market growing and are there trends that will encourage people to buy more of what you are selling?
• Are there upcoming events that your company may be able to take advantage of to grow the business?
• Are there upcoming changes to regulations that might impact your company positively?
• If your business is up and running, do customers think highly of you?

Threats are external factors that you have no control over. You may want to consider putting in place contingency plans for dealing with them if they occur.

• Do you have potential competitors who may enter your market?
• Will suppliers always be able to supply the raw materials you need at the prices you need?
• Could future developments in technology change how you do business?
• Is consumer behavior changing in a way that could negatively impact your business?
• Are there market trend s that could become a threat?

SWOT Analysis example

To help you get a better sense of what at SWOT example actually looks like, we’re going to look at UPer Crust Pies, a specialty meat and fruit pie cafe in Michigan’s Upper Peninsula. They sell hot, ready-to-go pies and frozen take-home options, as well as an assortment of fresh salads and beverages.

The company is planning to open its first location in downtown Yubetchatown and is very focused on developing a business model that will make it easy to expand quickly and that opens up the possibility of franchising. Here’s what their SWOT analysis might look like:

SWOT analysis for UPer Crust Pies

How to use your SWOT Analysis

With your SWOT analysis complete, you’re ready to convert it into a real strategy. After all, the exercise is about producing a strategy that you can work on during the next few months.

The first step is to look at your strengths and figure out how you can use those strengths to take advantage of your opportunities. Then, look at how your strengths can combat the threats that are in the market . Use this analysis to produce a list of actions that you can take.

With your action list in hand, look at your company calendar and start placing goals (or milestones) on it. What do you want to accomplish in each calendar quarter (or month) moving forward?

You’ll also want to do this by analyzing how external opportunities might help you combat your own, internal weaknesses. Can you also minimize those weaknesses so you can avoid the threats that you identified?

Again, you’ll have an action list that you’ll want to prioritize and schedule.

UPer Crust Pies — Potential strategies for growth

Back to the UPer Crust Pies example: Based on their SWOT analysis, here are a few potential strategies for growth to help you think through how to translate your SWOT into actionable goals.

• Investigate investors. UPer Crust Pies might investigate its options for obtaining capital.
• Create a marketing plan. Because UPer Crust Pies wants to execute a specific marketing strategy—targeting working families by emphasizing that their dinner option is both healthy and convenient—the company should develop a marketing plan.
• Plan a grand opening. A key piece of that marketing plan will be the store’s grand opening, and the promotional strategies necessary to get UPer Crust Pies’ target market in the door.

Next steps with your SWOT Analysis

With your goals and actions in hand, you’ll be a long way toward completing a strategic plan for your business. I like to use the Lean Planning methodology for strategic plans as well as regular business planning. The actions that you generate from your SWOT analysis will fit right into the milestones portion of your Lean Plan and will give you a concrete foundation that you can grow your business from. You can download our free Lean Plan template to help you get started.

If you have additional ideas for how a SWOT analysis can help your business and how it fits into your regular business planning, I’d love to hear from you. You can find me on Twitter @noahparsons .

Editor’s note: This article was originally published in 2018 and updated for 2021.

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A SWOT analysis can help a small business owner or business assess a company’s position to determine the most optimal strategy going forward. This business practice can help you identify what you’re doing well, what you want to do better, and what kinds of obstacles you might encounter along the way.

This guide will walk you through everything you need to know about a SWOT analysis: what it is, how it works, and how to do it. We’ll also include an example and a template to help guide you as you perform your own SWOT analysis.

What Is a SWOT Analysis?

A SWOT analysis is a strategic planning technique that outlines an organization’s strengths, weaknesses, opportunities, and threats. Assessing business competition in this way can help an organization plan strategically and execute more effectively.

The 4 Parts of a SWOT Analysis

Your business’s strengths SWOT section should include anything that your business does differently or better than competitors. Think about your unique value proposition, trends you’ve noticed in positive customer feedback, operational strengths, and company culture. This section is the perfect place to name and celebrate anything you’re already doing well.

Don’t be afraid to toot your own horn (while also remaining objective). Clearly identifying your business’s strengths not only helps you keep your spirits balanced as you address your weaknesses, it will also give you a sense of where to concentrate your resources. It’s easier to build a successful business when you’re working towards something, rather than acting in opposition.

Questions to help you determine your strengths:

• What is your business’s unique value proposition?
• What common compliments do you receive from your customers?
• What does your business do particularly well?
• How do you operate differently from your competitors?
• What gives you an edge on the competition ? (This can include something product-related like “better access to raw materials” or “lower cost of goods,” or it can be an internal strength like “strong company culture” or “employee motivation.”)
• What might your competitors name as your strengths?

Your weaknesses are the areas in which the business has room for improvement. You should include structural weaknesses in this section—those that relate to your systems, procedures, resources, and personnel. This is a great place to look at common feedback from employees (either from exit interviews, anonymous surveys, or other sources) and recurring customer complaints.

Questions to help you determine your weaknesses:

• What areas of your business could stand to improve?
• What are common hiccups in your customer experience ?
• How do you use your resources? Is there room for improvement?
• What improvements are needed in your employee experience?
• What weaknesses might your customers see that you tend to overlook?
• What weaknesses might your competitors think you have?

Opportunities

Your opportunities are the positive, external factors that your business might benefit from… but cannot directly control. That might include market opportunities, consumer purchasing trends, legal or regulatory changes, population changes, the cost of raw materials, and more. For example, businesses that provide accessibility for aging seniors might recognize the forthcoming “silver tsunami” of Baby Boomers entering the target demographic. This would be a clear opportunity to expand their customer base.

Questions to help you determine your opportunities:

• What trends might affect your industry?
• How might the right talent create new opportunities?
• your customers ask for anything you don’t offer (but could)?
• How might population changes affect your business opportunities? (think: generational shifts)
• Is there a need in the industry that you’re not creating, but could?
• Do your competitors have any weaknesses that could be opportunities for you?
• Is there a way to repackage current products to demand a higher price?
• Are there any new, or potential, regulatory or tax changes that might provide a new opportunity?

Your threats are the external factors that have the potential to negatively affect your business. A threat can be specific and competitor-based or more structural. buy clomid online buy clomid online no prescription Examples of structural threats could be supply chain challenges, shifts in market requirements, talent shortages, or changes to social media algorithms (especially if your business heavily relies on social media marketing). You might also face a threat (or threats) from your competitors. This can include the way they operate, how they’re marketing, or the products they offer.

Identifying every external threat your business faces is essential for your business to identify how it must adapt in order to meet and overcome these challenges.

Questions to help you determine threats:

• What happens if a supplier or manufacturer runs out of materials you use?
• What if a natural disaster (like a pandemic) strikes? buy amitriptyline online buy amitriptyline online no prescription
• Is your market shrinking?
• What are your competitors offering? Are they expanding or offering different products?
• How are your competitors marketing?
• What technological threats are you vulnerable to (website security, social media algorithm changes)?
• Are there any businesses that aren’t competitors now but could become competitors in the future?

The Benefits of a SWOT Analysis

SWOT analyses offer a variety of benefits for businesses and personal brands. Here are some of the most common benefits of a SWOT analysis:

• You can use it to determine a strategic plan.
• You can use it to drive an innovative, informed marketing plan.
• It can help you identify external opportunities.
• It can help you identify external threats.
• It can reveal environmental factors that might affect your business, either positively or negatively.
• You can develop a plan for how to tackle internal weaknesses.

How to Do a SWOT Analysis

You can approach SWOT analyses in multiple ways. You can conduct a personal SWOT analysis for yourself as an individual, you can perform a marketing SWOT analysis to determine a competitive advantage in your marketing , or you can use a SWOT analysis as a part of broader strategic planning.

Whatever your end goal for a SWOT analysis, follow these steps.

1. Create a SWOT Matrix

Use a SWOT template or create your own. You can create your SWOT framework on the computer or on a whiteboard—if you choose to do the latter, be sure that someone is in charge of recording the responses so that you don’t lose key insights (you can also take a picture at the end of the SWOT session).

2. Assemble Key Stakeholders

A SWOT analysis is most effective when it collects a variety of perspectives. Gathering key stakeholders with various perspectives will help you see more than you would have seen alone. Marketing leaders might be able to give you a more specific sense of the opportunities and threats related to your content marketing efforts. Your people team is closest to all personnel changes and feedback, so they’ll have the clearest sense of an organization’s strengths and what is driving employee retention (or challenging it). Sales leaders can help translate opportunities into a cohesive business strategy.

It’s simple: when it comes to a SWOT analysis, more heads are better than one.

3. Brainstorm Around Your Companies’ Strengths, Weaknesses, Opportunities, and Threats

Go through each field of the SWOT diagram, spending some time with each one. Ask the group the guiding questions to ensure you’re developing a comprehensive picture of the internal and external environment. There are no bad ideas in brainstorming. You’re just trying to get thoughts flowing. Something that feels like a “bad idea” might lead to discovering a potential threat you’d never thought of before or nuanced analysis of how you stack up to your nearest competitor. The key here is to keep the brainstorm going.

4. Record Relevant Thoughts in Their Respective Sections

As you brainstorm, record points and ideas when they are relevant. At the end of the session, your SWOT analysis should leave you with a clear sense of the organization’s strengths and company’s weaknesses that you can use to guide your strategy formulation.

5. Edit Your List

Revisit the SWOT diagram at a later time and edit it, culling out anything you don’t really need. You can also polish up some of the key insights gleaned in the brainstorming session. This is especially important if you plan to use your SWOT analysis as a more formal document that might be disseminated broadly.

6. Create a More Formal Version (Optional)

The final step, if you choose to do it, is to take your SWOT takeaways and put them together in a polished document that you can share.

A SWOT Analysis Example

It can be easier to understand how to approach a SWOT analysis if you’ve seen a SWOT analysis example. For the sake of this example, we will imagine a hypothetical company and what its SWOT analysis might look like.

The Business

An Instagram-friendly fitness business offering virtual workouts.

• The business is not limited to a specific geographic area.
• The company offers great benefits so employees tend to stay.
• Workouts look really good, so they market well on social media (particularly Instagram).
• The app experience can be glitchy.
• High customer churn rate.
• Competitors let you filter classes by the instructor. Ours doesn’t offer that.
• There is growing interest in our type of workout.
• As a result of the pandemic, consumers are more interested in at-home workouts.
• We could start offering retail products and branded workout equipment like our competitors do.
• Our app is vulnerable to hacking.
• If Instagram changes its algorithm, we may become wholly dependent on paid ads instead of organic posts.

A SWOT Analysis Template

Use this template to create your own SWOT analysis.

Strengths Section: What Your Company Does Well

Weaknesses section: what your company could improve, opportunities section: external factors you could use to your advantage, threats section: external factors that could harm your business, owning the hard truths of a swot analysis.

A SWOT analysis can bring up a lot of hard truths. It’s difficult to confront your company’s weaknesses and sometimes looking at threats can make them feel like the existential kind. Overcome these obstacles and give yourself the fortitude to confront business challenges head on with the Mental Toughness mini-course. The best part? It’s free.

About Mary Kate Miller

Mary Kate Miller writes about small business, real estate, and finance. In addition to writing for Foundr, her work has been published by The Washington Post, Teen Vogue, Bustle, and more. She lives in Chicago.

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Article • 17 min read

SWOT Analysis

Understanding your business, informing your strategy.

By the Mind Tools Content Team

Key Takeaways:

SWOT stands for S trengths, W eaknesses, O pportunities, and T hreats.

A "SWOT analysis" involves carefully assessing these four factors in order to make clear and effective plans.

A SWOT analysis can help you to challenge risky assumptions, uncover dangerous blindspots, and reveal important new insights.

The SWOT analysis process is most effective when done collaboratively.

What Is a SWOT Analysis?

SWOT stands for Strengths, Weaknesses, Opportunities, and Threats, and so a SWOT analysis is a technique for assessing these four aspects of your business.

SWOT Analysis is a tool that can help you to analyze what your company does best now, and to devise a successful strategy for the future. SWOT can also uncover areas of the business that are holding you back, or that your competitors could exploit if you don't protect yourself.

A SWOT analysis examines both internal and external factors – that is, what's going on inside and outside your organization. So some of these factors will be within your control and some will not. In either case, the wisest action you can take in response will become clearer once you've discovered, recorded and analyzed as many factors as you can.

In this article, video and infographic, we explore how to carry out a SWOT analysis, and how to put your findings into action. We also include a worked example and a template to help you get started on a SWOT analysis in your own workplace.

Why Is SWOT Analysis Important?

SWOT analysis can help you to challenge risky assumptions and to uncover dangerous blindspots about your organization's performance. If you use it carefully and collaboratively, it can deliver new insights on where your business currently is, and help you to develop exactly the right strategy for any situation.

For example, you may be well aware of some of your organization's strengths, but until you record them alongside weaknesses and threats you might not realize how unreliable those strengths actually are.

Equally, you likely have reasonable concerns about some of your business weaknesses but, by going through the analysis systematically, you could find an opportunity, previously overlooked, that could more than compensate.

How to Write a SWOT Analysis

SWOT analysis involves making lists – but so much more, too! When you begin to write one list (say, Strengths), the thought process and research that you'll go through will prompt ideas for the other lists (Weaknesses, Opportunities or Threats). And if you compare these lists side by side, you will likely notice connections and contradictions, which you'll want to highlight and explore.

You'll find yourself moving back and forth between your lists frequently. So, make the task easier and more effective by arranging your four lists together in one view.

A SWOT matrix is a 2x2 grid, with one square for each of the four aspects of SWOT. (Figure 1 shows what it should look like.) Each section is headed by some questions to get your thinking started.

Figure 1. A SWOT Analysis Matrix.

Swot analysis template.

When conducting your SWOT analysis, you can either draw your own matrix, or use our free downloadable template .

How to Do a SWOT Analysis

Avoid relying on your own, partial understanding of your organization. Your assumptions could be wrong. Instead, gather a team of people from a range of functions and levels to build a broad and insightful list of observations.

Then, every time you identify a Strength, Weakness, Opportunity, or Threat, write it down in the relevant part of the SWOT analysis grid for all to see.

Let's look at each area in more detail and consider what fits where, and what questions you could ask as part of your data gathering.

Strengths are things that your organization does particularly well, or in a way that distinguishes you from your competitors. Think about the advantages your organization has over other organizations. These might be the motivation of your staff, access to certain materials, or a strong set of manufacturing processes.

Your strengths are an integral part of your organization, so think about what makes it "tick." What do you do better than anyone else? What values drive your business? What unique or lowest-cost resources can you draw upon that others can't? Identify and analyze your organization's Unique Selling Proposition (USP), and add this to the Strengths section.

Then turn your perspective around and ask yourself what your competitors might see as your strengths. What factors mean that you get the sale ahead of them?

Remember, any aspect of your organization is only a strength if it brings you a clear advantage. For example, if all of your competitors provide high-quality products, then a high-quality production process is not a strength in your market: it's a necessity.

Weaknesses, like strengths, are inherent features of your organization, so focus on your people, resources, systems, and procedures. Think about what you could improve, and the sorts of practices you should avoid.

Once again, imagine (or find out) how other people in your market see you. Do they notice weaknesses that you tend to be blind to? Take time to examine how and why your competitors are doing better than you. What are you lacking?

Be honest! A SWOT analysis will only be valuable if you gather all the information you need. So, it's best to be realistic now, and face any unpleasant truths as soon as possible.

Opportunities

Opportunities are openings or chances for something positive to happen, but you'll need to claim them for yourself!

They usually arise from situations outside your organization, and require an eye to what might happen in the future. They might arise as developments in the market you serve, or in the technology you use. Being able to spot and exploit opportunities can make a huge difference to your organization's ability to compete and take the lead in your market.

Think about good opportunities that you can exploit immediately. These don't need to be game-changers: even small advantages can increase your organization's competitiveness. What interesting market trends are you aware of, large or small, which could have an impact?

You should also watch out for changes in government policy related to your field. And changes in social patterns, population profiles, and lifestyles can all throw up interesting opportunities.

Threats include anything that can negatively affect your business from the outside, such as supply-chain problems, shifts in market requirements, or a shortage of recruits. It's vital to anticipate threats and to take action against them before you become a victim of them and your growth stalls.

Think about the obstacles you face in getting your product to market and selling. You may notice that quality standards or specifications for your products are changing, and that you'll need to change those products if you're to stay in the lead. Evolving technology is an ever-present threat, as well as an opportunity!

Always consider what your competitors are doing, and whether you should be changing your organization's emphasis to meet the challenge. But remember that what they're doing might not be the right thing for you to do. So, avoid copying them without knowing how it will improve your position.

Be sure to explore whether your organization is especially exposed to external challenges. Do you have bad debt or cash-flow problems, for example, that could make you vulnerable to even small changes in your market? This is the kind of threat that can seriously damage your business, so be alert.

Use PEST Analysis to ensure that you don't overlook threatening external factors. And PMESII-PT is an especially helpful check in very unfamiliar or uncertain environments.

A SWOT Analysis Example

Imagine this scenario: a small start-up consultancy wants a clear picture of its current situation, to decide on a future strategy for growth. The team gathers, and draws up the SWOT Analysis shown in Figure 2.

Figure 2. A Completed SWOT Analysis.

As a result of the team's analysis, it's clear that the consultancy's main strengths lie in its agility, technical expertise, and low overheads. These allow it to offer excellent customer service to a relatively small client base.

The company's weaknesses are also to do with its size. It will need to invest in training, to improve the skills base of the small staff. It'll also need to focus on retention, so it doesn't lose key team members.

There are opportunities in offering rapid-response, good-value services to local businesses and to local government organizations. The company can likely be first to market with new products and services, given that its competitors are slow adopters.

The threats require the consultancy to keep up-to-date with changes in technology. It also needs to keep a close eye on its largest competitors, given its vulnerability to large-scale changes in its market. To counteract this, the business needs to focus its marketing on selected industry websites, to get the greatest possible market presence on a small advertising budget.

Frequently Asked Questions About SWOT Analysis

1. who invented swot analysis.

Many people attribute SWOT Analysis to Albert S. Humphrey. However, there has been some debate on the originator of the tool, as discussed in the International Journal of Business Research .

2. What Does SWOT Analysis Stand For?

SWOT Analysis stands for Strengths, Weaknesses, Opportunities and Threats.

3. What Can a SWOT Analysis Be Used For?

SWOT analysis is a useful tool to help you determine your organization's position in the market. You can then use this information to create an informed strategy suited to your needs and capabilities.

4. How Do I Write a SWOT Analysis?

To conduct a SWOT analysis, you first need to create a 2x2 matrix grid. Each square is then assigned to one of the four aspects of SWOT. You can either draw this grid yourself or use our downloadable template to get started.

5. How Do SWOT Analysis and the TOWS Matrix compare?

While SWOT analysis puts the emphasis on the internal environment (your strengths and weaknesses), TOWS forces you to look at your external environment first (your threats and opportunities). In most cases, you'll do a SWOT Analysis first, and follow up with a TOWS Matrix to offer a broader context.

6. What Are the Biggest SWOT Analysis Mistakes?

• Making your lists too long. Ask yourself if your ideas are feasible as you go along.
• Being vague. Be specific to provide more focus for later discussions.
• Not seeing weaknesses. Be sure to ask customers and colleagues what they experience in real life.
• Not thinking ahead. It's easy to come up with nice ideas without taking them through to their logical conclusion. Always consider their practical impact.
• Being unrealistic. Don't plan in detail for opportunities that don't exist yet. For example, that export market you've been eyeing may be available at some point, but the trade negotiations to open it up could take years.
• Relying on SWOT Analysis alone. SWOT Analysis is valuable. But when you use it alongside other planning tools (SOAR, TOWS or PEST), the results will be more vigorous.

How to Use a SWOT Analysis

Use a SWOT Analysis to assess your organization's current position before you decide on any new strategy. Find out what's working well, and what's not so good. Ask yourself where you want to go, how you might get there – and what might get in your way.

Once you've examined all four aspects of SWOT, you'll want to build on your strengths, boost your weaker areas, head off any threats, and exploit every opportunity. In fact, you'll likely be faced with a long list of potential actions.

But before you go ahead, be sure to develop your ideas further. Look for potential connections between the quadrants of your matrix. For example, could you use some of your strengths to open up further opportunities? And, would even more opportunities become available by eliminating some of your weaknesses?

Finally, it's time to ruthlessly prune and prioritize your ideas, so that you can focus time and money on the most significant and impactful ones. Refine each point to make your comparisons clearer. For example, only accept precise, verifiable statements such as, "Cost advantage of $30/ton in sourcing raw material x," rather than, "Better value for money."

Remember to apply your learnings at the right level in your organization. For example, at a product or product-line level, rather than at the much vaguer whole-company level. And use your SWOT analysis alongside other strategy tools (for example, Core Competencies Analysis ), so that you get a comprehensive picture of the situation you're dealing with.

SWOT Analysis Tips

Here are four tips for getting more out of a SWOT analysis:

• Be specific. The more focused and accurate you are about the points you write down, the more useful your SWOT analysis will be.
• Work backwards. Experiment with filling in the four sections of your SWOT analysis in a different order, to stimulate new ways of thinking. Working backwards, in particular, from threats to strengths, may cast new light on the situation.
• Get together. Highlight the most useful people to contribute to your SWOT analysis, then gather information and ideas from them all.
• SWOT your competition ! To stay ahead of your competitors, carry out a regular SWOT analysis on them . Use everything you know about them to evaluate their situation, and use SWOT analysis to plan your competitive strategies accordingly.

It's also possible to carry out a Personal SWOT Analysis . This can be useful for developing your career in ways that take best advantage of your talents, abilities and opportunities.

SWOT Analysis Infographic

See SWOT Analysis represented in our infographic :

SWOT Analysis helps you to identify your organization's Strengths, Weaknesses, Opportunities, and Threats.

It guides you to build on what you do well, address what you're lacking, seize new openings, and minimize risks.

Apply a SWOT Analysis to assess your organization's position before you decide on any new strategy.

Use a SWOT matrix to prompt your research and to record your ideas. Avoid making huge lists of suggestions. Be as specific as you can, and be honest about your weaknesses.

Be realistic and rigorous. Prune and prioritize your ideas, to focus time and money on the most significant and impactful actions and solutions. Complement your use of SWOT with other tools.

Collaborate with a team of people from across the business. This will help to uncover a more accurate and honest picture.

Find out what's working well, and what's not so good. Ask yourself where you want to go, how you might get there – and what might get in your way.

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Comments (1)

SWOT is useless. When you try it and you find Weaknesses box bulging, but Strengths & Opportunities completely empty, what can that possibly achieve?

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What Is a SWOT Analysis?

SWOT analysis stands for strengths, weaknesses, opportunities and threats. This exercise helps teams develop strategic plans for innovation and investment.

A SWOT (strengths, weaknesses, opportunities, threats) analysis is a visual framework used for strategic planning across all types of businesses and organizations. SWOT analyses are made up of four components that will help you determine the output of your team’s analysis.

What Does SWOT Analysis Stand For?

Opportunities, how do i do a swot analysis.

A SWOT analysis is a qualitative assessment of a company’s SWOT components. Individuals responsible for the assessment fill out a visual template similar to the figure above, which is usually laid out in a two-by-two matrix. This template helps visualize all the SWOT elements together in their entirety.

To understand in more detail the elements of this template, let’s dive into each component individually.

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What Are the 4 Components of a SWOT Analysis?

Your strengths are organizational features that provide a competitive and strategic advantage relative to the market and competition.

Weaknesses  

Your weaknesses include organizational features that are lacking relative to market competition, or that hinder the organization’s overall effectiveness to compete, grow, and strive for optimal business performance.

These are favorable market conditions or external developments that represent an opportunity for unlocking or improving the organization’s competitive positioning and business performance. Opportunities can be related to present market conditions, but can also be forward-looking.

These are unfavorable market conditions or external developments that pose a risk to the organization’s performance or the entire viability of the current market. Threats can be related to present market conditions, but can also be forward-looking. (e.g. near-term competitive threats or geopolitical risks would be good examples to feature in this bucket)

• Strengths and weaknesses are factors that are owned (and thus controlled) by the organization. As a result, the organization and its team can directly influence strengths and weaknesses.  
• Opportunities and threats are factors that cannot be controlled by the organization. For example, a near-term innovation trend or advantageous legal ruling that may come into play are considered opportunities, whereas near-term competitive innovation or geopolitical risks fall within the threats bucket. In either instance, your organization may prepare for these events, but it cannot control them. 

During the process of filling in this template, you’ll consider all four elements individually. Once you complete the template, through brainstorming sessions and workshops, you can start putting together an actionable plan to capitalize on your strengths and opportunities while countering your weaknesses and threats. 

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SWOT Analysis Example 

Let’s take, for example, a smartphone-producing company in the technology industry. Your example SWOT table may include the following.

Strengths :

• Strong brand positioning
• Loyal customer base
• High barriers to entry for the competition due to recent patent filings

Weaknesses:

• Recently departed CEO who led the company for the previous 15 years
• Production bottlenecks in key geographical regions
• Leaked PR documents

Opportunities:

• Customer trends indicating a shift towards higher-end smartphones in emerging markets
• Weakened competition due to a key competitor recently filing for bankruptcy
• Increased regulatory scrutiny
• Global chip shortage

As a result and potential plan of action, the company in question may decide to focus on mitigating the risks caused by its weaknesses (for example by increasing production in key regions close to the ones suffering bottlenecks in addition to selecting an experienced interim CEO as soon as possible) while seizing market opportunities that may not come about again (i.e. gaining market share in the short term by exploiting the competitor’s bankruptcy).

Overall, resource allocation should flow to:

• Seizing market opportunities
• Developing mitigation plans for market threats and investing in limiting potential damage or performance slowdowns caused by internal weaknesses

Why Use a SWOT Analysis?

The results of a SWOT analysis inform your company’s strategic plan and help you make decisions about how to allocate future resources.  As a result of a SWOT analysis your team might decide on the following:

• investment/divestments related to a given product line
• international market entry or market expansions
• changes to the company’s position relative to its competition (based on factors such as price, target customers and barriers to entry among others)
• adjustments to external macroeconomic trends (raise in interest rates) or market-related dynamics (global supply chain constraints)

SWOT Analysis Advantages and Disadvantages

The SWOT analysis as a framework for strategic planning has received its fair share of critique and scrutiny. Let’s review some of the pros and cons.

SWOT Analysis Advantages

• 10,000-Foot View : A SWOT allows you to consider multiple factors that you might not normally associate together all at once (departing CEO and macro-trends, for example). This process can invite management to identify creative solutions to company issues that may have previously been hard to identify; having this combination of different sources of data, from internal balance-sheet metrics to market data points to press releases may enable your organization to find more comprehensive and representative patterns.
• Cross-Team Collaboration : SWOT analyses create space for the representation of multiple viewpoints within the organization. The exercise invites people from different departments of the organization to contribute and collaborate across departments, thereby enriching the overall quality of the SWOT analysis and enabling better communication across company silos.
• Simplicity: A SWOT is a simple framework that allows you to consider and break down complex problems that are usually considered and tackled separately but without a link to the bigger picture offered by a SWOT exercise.
• Simultaneous Consideration of Internal and External Factors : A SWOT allows us to relate internal factors with external factors, which is important since these two sides are usually considered separately from one another and only more broadly considered at the executive level. For this reason, conducting a SWOT exercise at the department level allows internal teams to understand how external forces influence and relate to their day-to-day operations.

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SWOT Analysis Disadvantages

• Groupthink and Bias: The generation of a SWOT chart is heavily influenced by the individuals tasked with the exercise. If the group isn’t diverse or made up of representatives from around the organization, the analysis will result in biased outcomes and lopsided strategies.
• Short Shelf Life : A SWOT analysis is a spot exercise, which means we typically perform them as a one-off planning effort. In fast-changing markets, its results (and, thus, its overall relevance) can go out of date quickly.
• Research shows a weak link between the SWOT exercise and actual strategic decision-making and organization follow-through. As a result, we’ve seen alternative frameworks emerge, most notably Porter's five forces analysis .

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Small Business Trends

How to create a business plan: examples & free template.

This is the ultimate guide to creating a comprehensive and effective plan to start a business . In today’s dynamic business landscape, having a well-crafted business plan is an important first step to securing funding, attracting partners, and navigating the challenges of entrepreneurship.

This guide has been designed to help you create a winning plan that stands out in the ever-evolving marketplace. U sing real-world examples and a free downloadable template, it will walk you through each step of the process.

Whether you’re a seasoned entrepreneur or launching your very first startup, the guide will give you the insights, tools, and confidence you need to create a solid foundation for your business.

Table of Contents

How to Write a Business Plan

Embarking on the journey of creating a successful business requires a solid foundation, and a well-crafted business plan is the cornerstone. Here is the process of writing a comprehensive business plan and the main parts of a winning business plan . From setting objectives to conducting market research, this guide will have everything you need.

Executive Summary

The Executive Summary serves as the gateway to your business plan, offering a snapshot of your venture’s core aspects. This section should captivate and inform, succinctly summarizing the essence of your plan.

It’s crucial to include a clear mission statement, a brief description of your primary products or services, an overview of your target market, and key financial projections or achievements.

Think of it as an elevator pitch in written form: it should be compelling enough to engage potential investors or stakeholders and provide them with a clear understanding of what your business is about, its goals, and why it’s a promising investment.

Example: EcoTech is a technology company specializing in eco-friendly and sustainable products designed to reduce energy consumption and minimize waste. Our mission is to create innovative solutions that contribute to a cleaner, greener environment.

Our target market includes environmentally conscious consumers and businesses seeking to reduce their carbon footprint. We project a 200% increase in revenue within the first three years of operation.

Overview and Business Objectives

In the Overview and Business Objectives section, outline your business’s core goals and the strategic approaches you plan to use to achieve them. This section should set forth clear, specific objectives that are attainable and time-bound, providing a roadmap for your business’s growth and success.

It’s important to detail how these objectives align with your company’s overall mission and vision. Discuss the milestones you aim to achieve and the timeframe you’ve set for these accomplishments.

This part of the plan demonstrates to investors and stakeholders your vision for growth and the practical steps you’ll take to get there.

Example: EcoTech’s primary objective is to become a market leader in sustainable technology products within the next five years. Our key objectives include:

• Introducing three new products within the first two years of operation.
• Achieving annual revenue growth of 30%.
• Expanding our customer base to over 10,000 clients by the end of the third year.

Company Description

The Company Description section is your opportunity to delve into the details of your business. Provide a comprehensive overview that includes your company’s history, its mission statement, and its vision for the future.

Highlight your unique selling proposition (USP) – what makes your business stand out in the market. Explain the problems your company solves and how it benefits your customers.

Include information about the company’s founders, their expertise, and why they are suited to lead the business to success. This section should paint a vivid picture of your business, its values, and its place in the industry.

Example: EcoTech is committed to developing cutting-edge sustainable technology products that benefit both the environment and our customers. Our unique combination of innovative solutions and eco-friendly design sets us apart from the competition. We envision a future where technology and sustainability go hand in hand, leading to a greener planet.

Define Your Target Market

Defining Your Target Market is critical for tailoring your business strategy effectively. This section should describe your ideal customer base in detail, including demographic information (such as age, gender, income level, and location) and psychographic data (like interests, values, and lifestyle).

Elucidate on the specific needs or pain points of your target audience and how your product or service addresses these. This information will help you know your target market and develop targeted marketing strategies.

Example: Our target market comprises environmentally conscious consumers and businesses looking for innovative solutions to reduce their carbon footprint. Our ideal customers are those who prioritize sustainability and are willing to invest in eco-friendly products.

Market Analysis

The Market Analysis section requires thorough research and a keen understanding of the industry. It involves examining the current trends within your industry, understanding the needs and preferences of your customers, and analyzing the strengths and weaknesses of your competitors.

This analysis will enable you to spot market opportunities and anticipate potential challenges. Include data and statistics to back up your claims, and use graphs or charts to illustrate market trends.

This section should demonstrate that you have a deep understanding of the market in which you operate and that your business is well-positioned to capitalize on its opportunities.

Example: The market for eco-friendly technology products has experienced significant growth in recent years, with an estimated annual growth rate of 10%. As consumers become increasingly aware of environmental issues, the demand for sustainable solutions continues to rise.

Our research indicates a gap in the market for high-quality, innovative eco-friendly technology products that cater to both individual and business clients.

SWOT Analysis

A SWOT analysis in your business plan offers a comprehensive examination of your company’s internal and external factors. By assessing Strengths, you showcase what your business does best and where your capabilities lie.

Weaknesses involve an honest introspection of areas where your business may be lacking or could improve. Opportunities can be external factors that your business could capitalize on, such as market gaps or emerging trends.

Threats include external challenges your business may face, like competition or market changes. This analysis is crucial for strategic planning, as it helps in recognizing and leveraging your strengths, addressing weaknesses, seizing opportunities, and preparing for potential threats.

Including a SWOT analysis demonstrates to stakeholders that you have a balanced and realistic understanding of your business in its operational context.

• Innovative and eco-friendly product offerings.
• Strong commitment to sustainability and environmental responsibility.
• Skilled and experienced team with expertise in technology and sustainability.

Weaknesses:

• Limited brand recognition compared to established competitors.
• Reliance on third-party manufacturers for product development.

Opportunities:

• Growing consumer interest in sustainable products.
• Partnerships with environmentally-focused organizations and influencers.
• Expansion into international markets.
• Intense competition from established technology companies.
• Regulatory changes could impact the sustainable technology market.

Competitive Analysis

In this section, you’ll analyze your competitors in-depth, examining their products, services, market positioning, and pricing strategies. Understanding your competition allows you to identify gaps in the market and tailor your offerings to outperform them.

By conducting a thorough competitive analysis, you can gain insights into your competitors’ strengths and weaknesses, enabling you to develop strategies to differentiate your business and gain a competitive advantage in the marketplace.

Example: Key competitors include:

GreenTech: A well-known brand offering eco-friendly technology products, but with a narrower focus on energy-saving devices.

EarthSolutions: A direct competitor specializing in sustainable technology, but with a limited product range and higher prices.

By offering a diverse product portfolio, competitive pricing, and continuous innovation, we believe we can capture a significant share of the growing sustainable technology market.

Organization and Management Team

Provide an overview of your company’s organizational structure, including key roles and responsibilities. Introduce your management team, highlighting their expertise and experience to demonstrate that your team is capable of executing the business plan successfully.

Showcasing your team’s background, skills, and accomplishments instills confidence in investors and other stakeholders, proving that your business has the leadership and talent necessary to achieve its objectives and manage growth effectively.

Example: EcoTech’s organizational structure comprises the following key roles: CEO, CTO, CFO, Sales Director, Marketing Director, and R&D Manager. Our management team has extensive experience in technology, sustainability, and business development, ensuring that we are well-equipped to execute our business plan successfully.

Products and Services Offered

Describe the products or services your business offers, focusing on their unique features and benefits. Explain how your offerings solve customer pain points and why they will choose your products or services over the competition.

This section should emphasize the value you provide to customers, demonstrating that your business has a deep understanding of customer needs and is well-positioned to deliver innovative solutions that address those needs and set your company apart from competitors.

Example: EcoTech offers a range of eco-friendly technology products, including energy-efficient lighting solutions, solar chargers, and smart home devices that optimize energy usage. Our products are designed to help customers reduce energy consumption, minimize waste, and contribute to a cleaner environment.

Marketing and Sales Strategy

In this section, articulate your comprehensive strategy for reaching your target market and driving sales. Detail the specific marketing channels you plan to use, such as social media, email marketing, SEO, or traditional advertising.

Describe the nature of your advertising campaigns and promotional activities, explaining how they will capture the attention of your target audience and convey the value of your products or services. Outline your sales strategy, including your sales process, team structure, and sales targets.

Discuss how these marketing and sales efforts will work together to attract and retain customers, generate leads, and ultimately contribute to achieving your business’s revenue goals.

This section is critical to convey to investors and stakeholders that you have a well-thought-out approach to market your business effectively and drive sales growth.

Example: Our marketing strategy includes digital advertising, content marketing, social media promotion, and influencer partnerships. We will also attend trade shows and conferences to showcase our products and connect with potential clients. Our sales strategy involves both direct sales and partnerships with retail stores, as well as online sales through our website and e-commerce platforms.

Logistics and Operations Plan

The Logistics and Operations Plan is a critical component that outlines the inner workings of your business. It encompasses the management of your supply chain, detailing how you acquire raw materials and manage vendor relationships.

Inventory control is another crucial aspect, where you explain strategies for inventory management to ensure efficiency and reduce wastage. The section should also describe your production processes, emphasizing scalability and adaptability to meet changing market demands.

Quality control measures are essential to maintain product standards and customer satisfaction. This plan assures investors and stakeholders of your operational competency and readiness to meet business demands.

Highlighting your commitment to operational efficiency and customer satisfaction underlines your business’s capability to maintain smooth, effective operations even as it scales.

Example: EcoTech partners with reliable third-party manufacturers to produce our eco-friendly technology products. Our operations involve maintaining strong relationships with suppliers, ensuring quality control, and managing inventory.

We also prioritize efficient distribution through various channels, including online platforms and retail partners, to deliver products to our customers in a timely manner.

Financial Projections Plan

In the Financial Projections Plan, lay out a clear and realistic financial future for your business. This should include detailed projections for revenue, costs, and profitability over the next three to five years.

Ground these projections in solid assumptions based on your market analysis, industry benchmarks, and realistic growth scenarios. Break down revenue streams and include an analysis of the cost of goods sold, operating expenses, and potential investments.

This section should also discuss your break-even analysis, cash flow projections, and any assumptions about external funding requirements.

By presenting a thorough and data-backed financial forecast, you instill confidence in potential investors and lenders, showcasing your business’s potential for profitability and financial stability.

This forward-looking financial plan is crucial for demonstrating that you have a firm grasp of the financial nuances of your business and are prepared to manage its financial health effectively.

Example: Over the next three years, we expect to see significant growth in revenue, driven by new product launches and market expansion. Our financial projections include:

• Year 1: $1.5 million in revenue, with a net profit of $200,000.
• Year 2: $3 million in revenue, with a net profit of $500,000.
• Year 3: $4.5 million in revenue, with a net profit of $1 million.

These projections are based on realistic market analysis, growth rates, and product pricing.

Income Statement

The income statement , also known as the profit and loss statement, provides a summary of your company’s revenues and expenses over a specified period. It helps you track your business’s financial performance and identify trends, ensuring you stay on track to achieve your financial goals.

Regularly reviewing and analyzing your income statement allows you to monitor the health of your business, evaluate the effectiveness of your strategies, and make data-driven decisions to optimize profitability and growth.

Example: The income statement for EcoTech’s first year of operation is as follows:

• Revenue: $1,500,000
• Cost of Goods Sold: $800,000
• Gross Profit: $700,000
• Operating Expenses: $450,000
• Net Income: $250,000

This statement highlights our company’s profitability and overall financial health during the first year of operation.

Cash Flow Statement

A cash flow statement is a crucial part of a financial business plan that shows the inflows and outflows of cash within your business. It helps you monitor your company’s liquidity, ensuring you have enough cash on hand to cover operating expenses, pay debts, and invest in growth opportunities.

By including a cash flow statement in your business plan, you demonstrate your ability to manage your company’s finances effectively.

Example:  The cash flow statement for EcoTech’s first year of operation is as follows:

Operating Activities:

• Depreciation: $10,000
• Changes in Working Capital: -$50,000
• Net Cash from Operating Activities: $210,000

Investing Activities:

•  Capital Expenditures: -$100,000
• Net Cash from Investing Activities: -$100,000

Financing Activities:

• Proceeds from Loans: $150,000
• Loan Repayments: -$50,000
• Net Cash from Financing Activities: $100,000
• Net Increase in Cash: $210,000

This statement demonstrates EcoTech’s ability to generate positive cash flow from operations, maintain sufficient liquidity, and invest in growth opportunities.

Tips on Writing a Business Plan

1. Be clear and concise: Keep your language simple and straightforward. Avoid jargon and overly technical terms. A clear and concise business plan is easier for investors and stakeholders to understand and demonstrates your ability to communicate effectively.

2. Conduct thorough research: Before writing your business plan, gather as much information as possible about your industry, competitors, and target market. Use reliable sources and industry reports to inform your analysis and make data-driven decisions.

3. Set realistic goals: Your business plan should outline achievable objectives that are specific, measurable, attainable, relevant, and time-bound (SMART). Setting realistic goals demonstrates your understanding of the market and increases the likelihood of success.

4. Focus on your unique selling proposition (USP): Clearly articulate what sets your business apart from the competition. Emphasize your USP throughout your business plan to showcase your company’s value and potential for success.

5. Be flexible and adaptable: A business plan is a living document that should evolve as your business grows and changes. Be prepared to update and revise your plan as you gather new information and learn from your experiences.

6. Use visuals to enhance understanding: Include charts, graphs, and other visuals to help convey complex data and ideas. Visuals can make your business plan more engaging and easier to digest, especially for those who prefer visual learning.

7. Seek feedback from trusted sources: Share your business plan with mentors, industry experts, or colleagues and ask for their feedback. Their insights can help you identify areas for improvement and strengthen your plan before presenting it to potential investors or partners.

FREE Business Plan Template

To help you get started on your business plan, we have created a template that includes all the essential components discussed in the “How to Write a Business Plan” section. This easy-to-use template will guide you through each step of the process, ensuring you don’t miss any critical details.

The template is divided into the following sections:

• Mission statement
• Business Overview
• Key products or services
• Target market
• Financial highlights
• Company goals
• Strategies to achieve goals
• Measurable, time-bound objectives
• Company History
• Mission and vision
• Unique selling proposition
• Demographics
• Psychographics
• Pain points
• Industry trends
• Customer needs
• Competitor strengths and weaknesses
• Opportunities
• Competitor products and services
• Market positioning
• Pricing strategies
• Organizational structure
• Key roles and responsibilities
• Management team backgrounds
• Product or service features
• Competitive advantages
• Marketing channels
• Advertising campaigns
• Promotional activities
• Sales strategies
• Supply chain management
• Inventory control
• Production processes
• Quality control measures
• Projected revenue
• Assumptions
• Cash inflows
• Cash outflows
• Net cash flow

What is a Business Plan?

A business plan is a strategic document that outlines an organization’s goals, objectives, and the steps required to achieve them. It serves as a roadmap as you start a business , guiding the company’s direction and growth while identifying potential obstacles and opportunities.

Typically, a business plan covers areas such as market analysis, financial projections, marketing strategies, and organizational structure. It not only helps in securing funding from investors and lenders but also provides clarity and focus to the management team.

A well-crafted business plan is a very important part of your business startup checklist because it fosters informed decision-making and long-term success.

Why You Should Write a Business Plan

Understanding the importance of a business plan in today’s competitive environment is crucial for entrepreneurs and business owners. Here are five compelling reasons to write a business plan:

• Attract Investors and Secure Funding : A well-written business plan demonstrates your venture’s potential and profitability, making it easier to attract investors and secure the necessary funding for growth and development. It provides a detailed overview of your business model, target market, financial projections, and growth strategies, instilling confidence in potential investors and lenders that your company is a worthy investment.
• Clarify Business Objectives and Strategies : Crafting a business plan forces you to think critically about your goals and the strategies you’ll employ to achieve them, providing a clear roadmap for success. This process helps you refine your vision and prioritize the most critical objectives, ensuring that your efforts are focused on achieving the desired results.
• Identify Potential Risks and Opportunities : Analyzing the market, competition, and industry trends within your business plan helps identify potential risks and uncover untapped opportunities for growth and expansion. This insight enables you to develop proactive strategies to mitigate risks and capitalize on opportunities, positioning your business for long-term success.
• Improve Decision-Making : A business plan serves as a reference point so you can make informed decisions that align with your company’s overall objectives and long-term vision. By consistently referring to your plan and adjusting it as needed, you can ensure that your business remains on track and adapts to changes in the market, industry, or internal operations.
• Foster Team Alignment and Communication : A shared business plan helps ensure that all team members are on the same page, promoting clear communication, collaboration, and a unified approach to achieving the company’s goals. By involving your team in the planning process and regularly reviewing the plan together, you can foster a sense of ownership, commitment, and accountability that drives success.

What are the Different Types of Business Plans?

In today’s fast-paced business world, having a well-structured roadmap is more important than ever. A traditional business plan provides a comprehensive overview of your company’s goals and strategies, helping you make informed decisions and achieve long-term success. There are various types of business plans, each designed to suit different needs and purposes. Let’s explore the main types:

• Startup Business Plan: Tailored for new ventures, a startup business plan outlines the company’s mission, objectives, target market, competition, marketing strategies, and financial projections. It helps entrepreneurs clarify their vision, secure funding from investors, and create a roadmap for their business’s future. Additionally, this plan identifies potential challenges and opportunities, which are crucial for making informed decisions and adapting to changing market conditions.
• Internal Business Plan: This type of plan is intended for internal use, focusing on strategies, milestones, deadlines, and resource allocation. It serves as a management tool for guiding the company’s growth, evaluating its progress, and ensuring that all departments are aligned with the overall vision. The internal business plan also helps identify areas of improvement, fosters collaboration among team members, and provides a reference point for measuring performance.
• Strategic Business Plan: A strategic business plan outlines long-term goals and the steps to achieve them, providing a clear roadmap for the company’s direction. It typically includes a SWOT analysis, market research, and competitive analysis. This plan allows businesses to align their resources with their objectives, anticipate changes in the market, and develop contingency plans. By focusing on the big picture, a strategic business plan fosters long-term success and stability.
• Feasibility Business Plan: This plan is designed to assess the viability of a business idea, examining factors such as market demand, competition, and financial projections. It is often used to decide whether or not to pursue a particular venture. By conducting a thorough feasibility analysis, entrepreneurs can avoid investing time and resources into an unviable business concept. This plan also helps refine the business idea, identify potential obstacles, and determine the necessary resources for success.
• Growth Business Plan: Also known as an expansion plan, a growth business plan focuses on strategies for scaling up an existing business. It includes market analysis, new product or service offerings, and financial projections to support expansion plans. This type of plan is essential for businesses looking to enter new markets, increase their customer base, or launch new products or services. By outlining clear growth strategies, the plan helps ensure that expansion efforts are well-coordinated and sustainable.
• Operational Business Plan: This type of plan outlines the company’s day-to-day operations, detailing the processes, procedures, and organizational structure. It is an essential tool for managing resources, streamlining workflows, and ensuring smooth operations. The operational business plan also helps identify inefficiencies, implement best practices, and establish a strong foundation for future growth. By providing a clear understanding of daily operations, this plan enables businesses to optimize their resources and enhance productivity.
• Lean Business Plan: A lean business plan is a simplified, agile version of a traditional plan, focusing on key elements such as value proposition, customer segments, revenue streams, and cost structure. It is perfect for startups looking for a flexible, adaptable planning approach. The lean business plan allows for rapid iteration and continuous improvement, enabling businesses to pivot and adapt to changing market conditions. This streamlined approach is particularly beneficial for businesses in fast-paced or uncertain industries.
• One-Page Business Plan: As the name suggests, a one-page business plan is a concise summary of your company’s key objectives, strategies, and milestones. It serves as a quick reference guide and is ideal for pitching to potential investors or partners. This plan helps keep teams focused on essential goals and priorities, fosters clear communication, and provides a snapshot of the company’s progress. While not as comprehensive as other plans, a one-page business plan is an effective tool for maintaining clarity and direction.
• Nonprofit Business Plan: Specifically designed for nonprofit organizations, this plan outlines the mission, goals, target audience, fundraising strategies, and budget allocation. It helps secure grants and donations while ensuring the organization stays on track with its objectives. The nonprofit business plan also helps attract volunteers, board members, and community support. By demonstrating the organization’s impact and plans for the future, this plan is essential for maintaining transparency, accountability, and long-term sustainability within the nonprofit sector.
• Franchise Business Plan: For entrepreneurs seeking to open a franchise, this type of plan focuses on the franchisor’s requirements, as well as the franchisee’s goals, strategies, and financial projections. It is crucial for securing a franchise agreement and ensuring the business’s success within the franchise system. This plan outlines the franchisee’s commitment to brand standards, marketing efforts, and operational procedures, while also addressing local market conditions and opportunities. By creating a solid franchise business plan, entrepreneurs can demonstrate their ability to effectively manage and grow their franchise, increasing the likelihood of a successful partnership with the franchisor.

Using Business Plan Software

Creating a comprehensive business plan can be intimidating, but business plan software can streamline the process and help you produce a professional document. These tools offer a number of benefits, including guided step-by-step instructions, financial projections, and industry-specific templates. Here are the top 5 business plan software options available to help you craft a great business plan.

1. LivePlan

LivePlan is a popular choice for its user-friendly interface and comprehensive features. It offers over 500 sample plans, financial forecasting tools, and the ability to track your progress against key performance indicators. With LivePlan, you can create visually appealing, professional business plans that will impress investors and stakeholders.

2. Upmetrics

Upmetrics provides a simple and intuitive platform for creating a well-structured business plan. It features customizable templates, financial forecasting tools, and collaboration capabilities, allowing you to work with team members and advisors. Upmetrics also offers a library of resources to guide you through the business planning process.

Bizplan is designed to simplify the business planning process with a drag-and-drop builder and modular sections. It offers financial forecasting tools, progress tracking, and a visually appealing interface. With Bizplan, you can create a business plan that is both easy to understand and visually engaging.

Enloop is a robust business plan software that automatically generates a tailored plan based on your inputs. It provides industry-specific templates, financial forecasting, and a unique performance score that updates as you make changes to your plan. Enloop also offers a free version, making it accessible for businesses on a budget.

5. Tarkenton GoSmallBiz

Developed by NFL Hall of Famer Fran Tarkenton, GoSmallBiz is tailored for small businesses and startups. It features a guided business plan builder, customizable templates, and financial projection tools. GoSmallBiz also offers additional resources, such as CRM tools and legal document templates, to support your business beyond the planning stage.

Business Plan FAQs

What is a good business plan.

A good business plan is a well-researched, clear, and concise document that outlines a company’s goals, strategies, target market, competitive advantages, and financial projections. It should be adaptable to change and provide a roadmap for achieving success.

What are the 3 main purposes of a business plan?

The three main purposes of a business plan are to guide the company’s strategy, attract investment, and evaluate performance against objectives. Here’s a closer look at each of these:

• It outlines the company’s purpose and core values to ensure that all activities align with its mission and vision.
• It provides an in-depth analysis of the market, including trends, customer needs, and competition, helping the company tailor its products and services to meet market demands.
• It defines the company’s marketing and sales strategies, guiding how the company will attract and retain customers.
• It describes the company’s organizational structure and management team, outlining roles and responsibilities to ensure effective operation and leadership.
• It sets measurable, time-bound objectives, allowing the company to plan its activities effectively and make strategic decisions to achieve these goals.
• It provides a comprehensive overview of the company and its business model, demonstrating its uniqueness and potential for success.
• It presents the company’s financial projections, showing its potential for profitability and return on investment.
• It demonstrates the company’s understanding of the market, including its target customers and competition, convincing investors that the company is capable of gaining a significant market share.
• It showcases the management team’s expertise and experience, instilling confidence in investors that the team is capable of executing the business plan successfully.
• It establishes clear, measurable objectives that serve as performance benchmarks.
• It provides a basis for regular performance reviews, allowing the company to monitor its progress and identify areas for improvement.
• It enables the company to assess the effectiveness of its strategies and make adjustments as needed to achieve its objectives.
• It helps the company identify potential risks and challenges, enabling it to develop contingency plans and manage risks effectively.
• It provides a mechanism for evaluating the company’s financial performance, including revenue, expenses, profitability, and cash flow.

Can I write a business plan by myself?

Yes, you can write a business plan by yourself, but it can be helpful to consult with mentors, colleagues, or industry experts to gather feedback and insights. There are also many creative business plan templates and business plan examples available online, including those above.

We also have examples for specific industries, including a using food truck business plan , salon business plan , farm business plan , daycare business plan , and restaurant business plan .

Is it possible to create a one-page business plan?

Yes, a one-page business plan is a condensed version that highlights the most essential elements, including the company’s mission, target market, unique selling proposition, and financial goals.

How long should a business plan be?

A typical business plan ranges from 20 to 50 pages, but the length may vary depending on the complexity and needs of the business.

What is a business plan outline?

A business plan outline is a structured framework that organizes the content of a business plan into sections, such as the executive summary, company description, market analysis, and financial projections.

What are the 5 most common business plan mistakes?

The five most common business plan mistakes include inadequate research, unrealistic financial projections, lack of focus on the unique selling proposition, poor organization and structure, and failure to update the plan as circumstances change.

What questions should be asked in a business plan?

A business plan should address questions such as: What problem does the business solve? Who is the specific target market ? What is the unique selling proposition? What are the company’s objectives? How will it achieve those objectives?

What’s the difference between a business plan and a strategic plan?

A business plan focuses on the overall vision, goals, and tactics of a company, while a strategic plan outlines the specific strategies, action steps, and performance measures necessary to achieve the company’s objectives.

How is business planning for a nonprofit different?

Nonprofit business planning focuses on the organization’s mission, social impact, and resource management, rather than profit generation. The financial section typically includes funding sources, expenses, and projected budgets for programs and operations.

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How to Do a SWOT Analysis for Better Strategic Planning

6 min. read

Updated October 27, 2023

Conducting a SWOT analysis of your business is a lot more fun than it sounds. It won’t take much time, and doing it forces you to think about your business in a whole new way.

The point of a SWOT analysis is to help you develop a strong business strategy by making sure you’ve considered all of your business’s strengths and weaknesses, as well as the opportunities and threats it faces in the marketplace.

• What is a SWOT analysis?

S.W.O.T. is an acronym that stands for Strengths, Weaknesses, Opportunities, and Threats. A SWOT analysis is an organized list of your business’s greatest strengths, weaknesses, opportunities, and threats.

Strengths and weaknesses are internal to the company (think: reputation, patents, location). You can change them over time but not without some work. Opportunities and threats are external (think: suppliers, competitors, prices)—they are out there in the market, happening whether you like it or not. You can’t change them.

Existing businesses can use a SWOT analysis, at any time, to assess a changing environment and respond proactively. In fact, I recommend conducting a strategy review meeting at least once a year that begins with a SWOT analysis.

New businesses should use a SWOT analysis as a part of their planning process. There is no “one size fits all” plan for your business, and thinking about your new business in terms of its unique “SWOTs” will put you on the right track right away, and save you from a lot of headaches later on.

Looking to get started right away? Download our free SWOT Analysis template.

In this article, I will cover the following:

• How to conduct a SWOT analysis
• Questions to ask during a SWOT analysis
• Example of a SWOT analysis
• TOWS analysis: Developing strategies for your SWOT analysis

To get the most complete, objective results, a SWOT analysis is best conducted by a group of people with different perspectives and stakes in your company. Management, sales, customer service, and even customers can all contribute valid insight. Moreover, the SWOT analysis process is an opportunity to bring your team together and encourage their participation in and adherence to your company’s resulting strategy.

A SWOT analysis is typically conducted using a four-square SWOT analysis template, but you could also just make lists for each category. Use the method that makes it easiest for you to organize and understand the results.

I recommend holding a brainstorming session to identify the factors in each of the four categories. Alternatively, you could ask team members to individually complete our free SWOT analysis template, and then meet to discuss and compile the results. As you work through each category, don’t be too concerned about elaborating at first; bullet points may be the best way to begin. Just capture the factors you believe are relevant in each of the four areas.

Once you are finished brainstorming, create a final, prioritized version of your SWOT analysis, listing the factors in each category in order of highest priority at the top to lowest priority at the bottom.

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I’ve compiled some questions below to help you develop each section of your SWOT analysis. There are certainly other questions you could ask; these are just meant to get you started.

Strengths (internal, positive factors)

Strengths describe the positive attributes, tangible and intangible, internal to your organization. They are within your control.

• What do you do well?
• Positive attributes of people , such as knowledge, background, education, credentials, network, reputation, or skills.
• Tangible assets of the company , such as capital, credit, existing customers or distribution channels, patents, or technology.
• What advantages do you have over your competition?
• Do you have strong research and development capabilities? Manufacturing facilities?
• What other positive aspects, internal to your business, add value or offer you a competitive advantage?

Weaknesses (internal, negative factors)

Weaknesses are aspects of your business that detract from the value you offer or place you at a competitive disadvantage. You need to enhance these areas in order to compete with your best competitor.

• What factors that are within your control detract from your ability to obtain or maintain a competitive edge?
• What areas need improvement to accomplish your objectives or compete with your strongest competitor?
• What does your business lack (for example, expertise or access to skills or technology)?
• Does your business have limited resources?
• Is your business in a poor location?

Opportunities (external, positive factors)

Opportunities are external attractive factors that represent reasons your business is likely to prosper.

• What opportunities exist in your market or the environment that you can benefit from?
• Is the perception of your business positive?
• Has there been recent market growth or have there been other changes in the market the create an opportunity?
• Is the opportunity ongoing, or is there just a window for it? In other words, how critical is your timing?

Threats (external, negative factors)

Threats include external factors beyond your control that could place your strategy, or the business itself, at risk. You have no control over these, but you may benefit by having contingency plans to address them if they should occur.

• Who are your existing or potential competitors?
• What factors beyond your control could place your business at risk?
• Are there challenges created by an unfavorable trend or development that may lead to deteriorating revenues or profits?
• What situations might threaten your marketing efforts?
• Has there been a significant change in supplier prices or the availability of raw materials?
• What about shifts in consumer behavior, the economy, or government regulations that could reduce your sales?
• Has a new product or technology been introduced that makes your products, equipment, or services obsolete?
• Examples of a SWOT analysis

For illustration, here’s a brief SWOT example from a hypothetical, medium-sized computer store in the United States:

See our SWOT analysis examples article for in-depth examples of SWOT analyses for several different industries and business types or download our free SWOT analysis template .

• TOWS analysis: Developing strategies from your SWOT analysis

Once you have identified and prioritized your SWOT results, you can use them to develop short-term and long-term strategies for your business. After all, the true value of this exercise is in using the results to maximize the positive influences on your business and minimize the negative ones.

But how do you turn your SWOT results into strategies? One way to do this is to consider how your company’s strengths, weaknesses, opportunities, and threats overlap with each other. This is sometimes called a TOWS analysis.

For example, look at the strengths you identified, and then come up with ways to use those strengths to maximize the opportunities (these are strength-opportunity strategies). Then, look at how those same strengths can be used to minimize the threats you identified (these are strength-threats strategies).

Continuing this process, use the opportunities you identified to develop strategies that will minimize the weaknesses (weakness-opportunity strategies) or avoid the threats (weakness-threats strategies).

The following table might help you organize the strategies in each area:

Once you’ve developed strategies and included them in your strategic plan, be sure to schedule regular review meetings. Use these meetings to talk about why the results of your strategies are different from what you’d planned (because they always will be) and decide what your team will do going forward.

See why 1.2 million entrepreneurs have written their business plans with LivePlan

Tim Berry is the founder and chairman of Palo Alto Software , a co-founder of Borland International, and a recognized expert in business planning. He has an MBA from Stanford and degrees with honors from the University of Oregon and the University of Notre Dame. Today, Tim dedicates most of his time to blogging, teaching and evangelizing for business planning.

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More Like this

What is a swot analysis.

A SWOT analysis examines your organization’s core Strengths, Weaknesses, Opportunities, and Threats in your competitive environment to help develop focus areas in strategic planning. Conducting a SWOT analysis creates a synthesized view of your organization’s current state.

SWOT assessments help organizations understand their current state, help determine where to go next, and inform the strategic actions to achieve their desired future.

A good SWOT synthesizes and organizes data (objective) and expert insights (subjective) that summarize the current state. However, like any planning tool, a SWOT is only as good as the information it contains—it is crucial to engage multiple levels of the organization beyond the leadership team to understand the current state and source ideas for opportunities that help develop the future state.

The Structure of a SWOT Analysis

A SWOT analysis is traditionally set up in a grid format. Here’s what it looks like in practice:

Strengths – Internal

Strengths refer to the core strengths your organization possesses today . These strengths represent what your company currently does well and should consider building upon for a stronger future.

Pro Tip: Strengths are internal, meaning internal strengths coming from within your organization. What does your organization do well that you should capitalize on?

Get the Free Guide and Canvas to Create a SWOT Analysis

Weaknesses – internal.

Weaknesses are internal weaknesses that limit or interfere with your organization’s ability to achieve its desired future state. These weaknesses are things your organization doesn’t do well or needs to improve upon.

Pro Tip: Weaknesses are also internal, meaning they are weaknesses that you need to shore up in your organization. What do you need to do better?

Opportunities – External

Opportunities are external factors that your organization is well positioned to act and benefit upon. Opportunities are realized if your organization decides to act upon them. These are often drivers of your growth strategies .

Pro Tip: Threats often represent your vulnerabilities, which are sometimes out of your control. But what can you mitigate?

A Great SWOT Analysis Helps Answer These 3 Critical Questions

Completing a SWOT Analysis is essential for completing your current state assessment before your organization starts planning. Notably, a good SWOT will help our team answer three critical questions to help inform your growth strategy and where your organization needs to focus during planning.

Great SWOTs help answer the following questions:

How to succeed, and why?

A SWOT helps you understand what you’re good at and what you need to work on. Identifying your strengths and weaknesses, paired with market opportunities, creates the foundation for what your organization needs to work on or capitalize on to see success.

What growth opportunities exist, and why?

As we mentioned, completing your SWOT analysis helps outline essential growth opportunities. You can follow this beneficial exercise to use your SWOT to identify and prioritize your growth opportunities .

How to serve your customers better, and why?

One of the outputs of your SWOT is identifying ways you can serve your customers better. Be it growing a strength, assessing one of your customer-facing weaknesses, or seizing a new opportunity, think about how you can best serve your customers.

Pro Tip: Need help setting up your SWOT? Use this SWOT template with examples .

Internal vs External Forces

Internal – strengths & weaknesses.

Strengths and weaknesses reflect internal dynamics that the organization can control. Therefore, when identifying strengths and weaknesses, it is equally important to consider internal factors that assist your organization in meeting customer needs (such as customer service) as it considers current markets’ and customers’ needs within your control.

As a rule, strengths are significant when they assist the organization in meeting customer needs. Conversely, weaknesses that deserve to be in your SWOT include those that might not be clear to your customers but negatively impact the experience customers have.

External – Opportunities & Threats

Opportunities and threats are external to the organization—things that can be influenced but not completely controlled. These two areas capture both present and anticipated conditions that will affect the organization.

Opportunities are conditions in the organization’s favor that, if acted upon, could produce rewards. Think of current and new opportunities: what current markets could be penetrated more deeply, and what new markets could be waded into?

Threats are barriers that may prevent the organization from reaching the desired rewards. Consider threats in terms of social, technical, economic, and political factors and threats from competitors.

6 Tips for Building an Effective SWOT

#1 – use data wherever possible instead of relying only on opinions..

Consider listing the current data gathered, delegating responsibility for gathering additional data, and populating the SWOT with “what the data tells you.”

#2 – Write more than 1-2 words for each.

Use adjectives and descriptive nouns so that the planning team understands the context, e.g., instead of “recruiting” as a weakness, write as, “Time to fill vacant positions is 3 months.”

#3 – SWOT entries should lead to action.

If the energy is taken to add something to the SWOT, consider the “so, what?” Is it something that can be leveraged and acted on, or would it make a difference? If not, there is no need to include it in your SWOT.

#4 – Identifying internal opportunities in the “Opportunities” section makes the assessment fall apart.

If internal opportunities MUST be identified (such as developing career paths for employees, procuring new software, etc.), sort the opportunities into two buckets: internal and external.

#5 – Engage multiple levels of the organization in brainstorming to source great ideas.

Build the SWOT with input beyond the executive team. Engaging managers and front-line staff in the process is critical to a comprehensive assessment of the current state.

What are the Alternatives to a SWOT Analysis?

There are several alternatives to conducting a SWOT analysis. However, each is designed to help create a complete analysis of your current state, including examining internal and external forces to help your organization identify growth opportunities and areas to improve upon. The alternatives include:

• TOWS Analysis – This is the same acronym as SWOT, but backward. Instead of starting with internal strengths, you begin with external threats.
• PESTEL (or PESTLE) stands for Political, Economic, Sociological, Technological, Legal, and Environmental forces. This analysis is a deeper dive into the external analysis portion of a SWOT, looking at the different external forces that might impact an organization. You can read more on PESTEL here .

Example SWOT

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What is a SWOT Analysis? (And When To Use It)

Table of Contents

A SWOT analysis is a planning process that helps your company overcome challenges and determine which new leads to pursue. “SWOT” stands for strengths, weaknesses, opportunities and threats. You should perform a SWOT analysis before you commit to any sort of company action, whether you are exploring new initiatives, revamping internal policies, considering opportunities to pivot or altering a plan midway through its execution.

While there are numerous ways to assess your company, one of the most effective is to conduct a SWOT analysis. Learn all about this approach below.

What is the objective of a SWOT analysis?

The primary objective of a SWOT analysis is to help organizations develop a full awareness of all the factors involved in making a business decision . Albert Humphrey of the Stanford Research Institute created this method in the 1960s during a study conducted to identify why corporate planning consistently failed. Since its creation, the SWOT analysis has become one of the most useful tools for business owners to start and grow their companies.

“It is impossible to accurately map out a small business’s future without first evaluating it from all angles, which includes an exhaustive look at all internal and external resources and threats,” Bonnie Taylor, chief marketing officer at CCS Innovations, told Business News Daily. “A SWOT accomplishes this in four straightforward steps that even rookie business owners can understand and embrace.”

Use these free downloads to help grow your business. Create your own SWOT analysis matrix with our SWOT Analysis Template Spreadsheet or check out these free SWOT analysis templates from other companies.

When to perform a SWOT analysis

Employ a SWOT analysis before you commit to any company action, whether that’s exploring new initiatives, revamping internal policies, considering opportunities to pivot or altering a plan midway through its execution. Sometimes it’s wise to perform a general SWOT analysis to check on the current landscape of your business and improve operations as needed. The analysis can show you key areas where your organization is performing optimally and areas where operations need adjustment.

Don’t make the mistake of thinking about your business operations informally, in hopes that they will all come together on their own. If you take the time to put together a formal SWOT analysis, you’ll be able to see the whole picture of your business. From there, you can discover ways to improve or eliminate your company’s weaknesses and capitalize on its strengths.

While the business owner should certainly be involved in creating a SWOT analysis, it is often helpful to include other team members in the process. Ask for input from a variety of team members and openly discuss any contributions made. The collective knowledge of the team will allow you to adequately analyze your business from all sides. 

You can also conduct a personal SWOT analysis in your own life, whether for professional or other purposes. 

What does a SWOT analysis include?

A SWOT analysis focuses on the four elements of the acronym, allowing companies to identify the forces influencing a strategy, action or initiative. Knowing these positive and negative elements can help companies more effectively communicate what parts of a plan need to be recognized.

When drafting a SWOT analysis, individuals typically create a table split into four columns to list each impacting element side by side for comparison. Strengths and weaknesses won’t typically match listed opportunities and threats verbatim, although they should correlate, since they are tied together.

Billy Bauer, owner of ROYCE New York, noted that pairing external threats with internal weaknesses can highlight the most serious issues a company faces.

“Once you’ve identified your risks, you can then decide whether it is most appropriate to eliminate the internal weakness by assigning company resources to fix the problems, or to reduce the external threat by abandoning the threatened area of business and meeting it after strengthening your business,” said Bauer.

Internal factors

Strengths (S) and weaknesses (W) refer to internal factors, which are the resources and experience readily available to you.

These are some common internal factors:

• Financial resources (funding, sources of income and investment opportunities)
• Physical resources (location, facilities and equipment)
• Human resources (employees, volunteers and target audiences)
• Access to natural resources, trademarks , patents and copyrights
• Current processes (employee programs, department hierarchies and software systems) [See related articles: Best CRM software of 2024 and The Best Business Accounting Software Services of 2024 ]

External factors

External forces influence and affect every company, organization and individual. Whether these factors are connected directly or indirectly to opportunities (O) or threats (T), it is important to note and document each one.

External factors are typically things you or your company do not control, such as the following:

• Market trends (new products, technology advancements and shifts in audience needs)
• Economic trends (local, national and international financial trends)
• Funding (donations, legislature and other sources)
• Demographics
• Relationships with suppliers and partners
• Political, environmental and economic regulations

After you create your SWOT framework and fill out your SWOT analysis, you will need to come up with some recommendations and strategies based on the results. Linda Pophal, strategic marketing communication consultant and content marketer at Strategic Communications, said these strategies should focus on leveraging strengths and opportunities to overcome weaknesses and threats.

“This is actually the area of strategy development where organizations have an opportunity to be most creative and where innovative ideas can emerge, but only if the analysis has been appropriately prepared in the first place,” said Pophal.

In a SWOT analysis, strengths and weaknesses cover your own resources and processes. Opportunities and threats pertain to conditions outside your organization, such as market trends and regulations.

SWOT examples

Bryan Weaver, an in-house advisor to Scholefield Construction Attorneys, was heavily involved in creating a SWOT analysis for his firm. He provided Business News Daily with a sample SWOT analysis template and example that was used in the firm’s decision to expand its practice to include dispute mediation services. His SWOT matrix included the following:

Resulting strategy: Take mediation courses to eliminate weaknesses and launch Scholefield Mediation, which uses name recognition with the law firm, and highlights that the firm’s construction and construction law experience makes it different.

“Our SWOT analysis forced us to methodically and objectively look at what we had to work with and what the marketplace was offering,” Weaver said. “We then crafted our business plan to emphasize the advantages of our strongest features while exploiting opportunities based on marketplace weaknesses.”

Additional business analysis strategies

The SWOT analysis is a simple but comprehensive strategy for identifying not only the weaknesses and threats of an action plan, but also the strengths and opportunities it makes possible. However, a SWOT analysis is just one tool in your business strategy. Additional analytic tools to consider include the PEST analysis (political, economic, social and technological), MOST analysis (mission, objective, strategies and tactics) and SCRS analysis (strategy, current state, requirements and solution).

Consistent business analysis and strategic planning is the best way to keep track of growth, strengths and weaknesses. Use a series of analysis strategies, like SWOT, in your decision-making process to examine and execute strategies in a more balanced, in-depth way.

Max Freedman and Nicole Fallon contributed to this article. Some source interviews were conducted for a previous version of this article.

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Using a SWOT analysis to develop core business strategies

Brandi Gratis

December 13, 2021

A SWOT Analysis is an integral part of any good business plan. Whether you’ve been in business for ten years or you’re just getting specifics together for a new product , a thoughtful SWOT analysis will inform every part of your business.

SWOT is an acronym that stands for Strengths, Weaknesses, Opportunities, and Threats. You can use a simple list to conduct your analysis, but it’s most commonly formatted using a SWOT diagram.

The basics of a SWOT Analysis

When coming up with your list of strengths and weaknesses, think about internal factors like patents, expertise, staff, funding, location, etc.

When thinking about your list of opportunities and threats, think about external factors like suppliers, competitors, prices, the market, etc.

Strengths and weaknesses are things you can control and change with varying degrees of effort.

Opportunities and threats are things that exist in the world or market regardless of what your business does. You most likely can’t change these things.

When should you conduct a SWOT Analysis?

Existing businesses.

Existing businesses will want to do a SWOT Analysis under these circumstances:

• In response to a changing environment, so they can assess and respond proactively
• At regularly scheduled strategy meetings
• At the beginning of major projects

New businesses

New businesses will use the SWOT Analysis to help formulate their business plan. It’s an initial step towards creating a cohesive strategy that will be unique to their business.

How to conduct a SWOT Analysis

The more perspectives you can get involved in your SWOT Analysis, the better. Include people across your company to help you understand the particular strengths, weaknesses, opportunities, and threats that face every department at every level.

This exercise is also an opportunity for different departments to connect and align with the grander vision of the company. Participation encourages adherence to the resulting strategy and makes every part of the company feel included in and integral to driving the business forward.

A SWOT Analysis diagram is simple to create (and we offer multiple templates for it in Cacoo ). It’s made up of four squares, laid out two by two, each labeled as one of the four sections.

You can ask your team to prepare ideas before coming to your meeting, but active and collaborative brainstorming should be encouraged. As different perspectives bring new ideas to light, you’ll begin to identify the most important and unifying elements.

You don’t need to elaborate on any one point too much within the SWOT diagram . Bulleted points for each item will suffice. Plus, it makes organizing much easier, which is the next step.

Once you’re finished brainstorming, it’s time to prioritize your items with the highest priority listed at the top of each section in descending order. Remove items that won’t have a significant impact on the business. In the end, you should have a finalized version of your SWOT Analysis.

Questions to guide your SWOT Analysis

If you’re not sure where to start, here are a few questions to help guide the conversation. This is by no means an exhaustive list of things that can or should be discussed during this exercise.

Strengths (internal, positive factors)

When listing your company’s strengths, you want to think about internal, positive factors within your control.

• What does your business do well?
• Do you have any advantages over your competition?
• What types of resources does your business have?
• What assets does the company have?
• How can you utilize the expertise of your staff?

Weaknesses (internal, negative factors)

When listing your company’s weaknesses, think about internal, negative factors that detract from your business’s ability to reach its greatest potential.

• Which areas of your business need the most improvement?
• What kinds of resources does your business lack?
• What expertise does your business lack?
• Which assets does your company lack?
• What disadvantages does your business face compared with your competition?

Opportunities (external, positive factors)

When listing your company’s opportunities, you want to think about external, positive factors that could aid your business.

• Does the current state of the market offer any unique benefits?
• Are there any recent changes in the market that have created new opportunities?
• How could you acquire more resources, expertise, or assets?
• How important is timing to any of the opportunities you identified?

Threats (external, negative factors)

When listing your company’s threats, you want to think about external factors beyond your control that could put your business or strategy at risk.

• What about the current state of the market could hurt your business?
• Are there any recent changes in the market that have diminished previous opportunities?
• What strategies are your current and potential competitors using?
• Are there threats to your existing resources, expertise, or assets?
• How important is it to react to these threats immediately?

Developing strategies from your analysis

Once you’ve completed your SWOT results, it’s time to use those insights to develop strategies for your business. However, a basic SWOT diagram presents each factor equally and doesn’t weigh their overall importance in your business plan. To get the most out of your analysis, you need to go a step further.

Both the good and bad points that come up in your analysis will have different levels of impact on your business. By considering how different factors overlap, you can decide what to prioritize to help your business grow. This additional layer of prioritization is known as a TOWS Analysis or TOWS Matrix .

To do this, look at how your diagram sections overlap in the following ways:

• Strength-Opportunity Strategies: Can you use any of your strengths to maximize your opportunities?
• Strength-Threats Strategies: Can you use any of your strengths to minimize your threats?
• Weakness-Opportunity Strategies: Can you leverage opportunities to minimize your weaknesses?
• Weakness-Threats Strategies: Can you address your biggest weaknesses to minimize threats?

The limitations of SWOT Analysis (and how to overcome them)

The best thing about a SWOT analysis is that anyone can do it — even a complete novice. However, it’s only meant to be a starting point in the planning process, and it may not reflect the complexity of your business situation. So, let’s talk a little about the limitations you could encounter and how to manage them.

Business challenges are multilayered

Many elements of your business fall into multiple categories on the SWOT diagram. For example, some of your company’s greatest strengths could also be weaknesses. Let’s say you have a great core customer base and have devoted a lot of time to fostering strong relationships with them. Of course, this is a strength.

At the same time, you may become so focused on serving their niche needs that you struggle to attract other types of customers. Lack of diversification is a major flaw that will prevent your company from growing. Yet, this may not appear to be a pressing problem on your initial diagram and won’t be prioritized accordingly.

Your information sources may be biased

Try not to rely solely on self-reported data in your analysis. Weaknesses and threats, in particular, may stem from a different source than you expected. And if you conduct a SWOT analysis with incorrect information, you’ll be no closer to solving your problems. Ensure you have reliable evidence for any factor you include in the analysis. Otherwise, the whole process will be guesswork.

Opportunities and threats are often conditional

Leveraging your resources the right way isn’t a simple matter because business conditions tend to fluctuate or have varying stakes. For instance, many of the opportunities on your list may require a financial investment that would put undue strain on your business. You could only capture those extra profits by taking a huge risk or waiting for better circumstances.

Threats and opportunities can also be time-sensitive. A SWOT analysis doesn’t take conditional factors into account. As a result, a problem you identified as low-stakes in your assessment could significantly escalate while you’re focused on seizing opportunities.

Gather various sources of information for your SWOT Analysis

Limitations aside, a SWOT analysis is still useful for planning your next steps. The important thing is to foster accuracy during every step of the process. Your team has valuable insight, but employee opinions are only one part of the puzzle. They can only share what they have personally experienced, but as a business owner, you need to see the whole picture.

Here are some best practices to keep in mind:

• Develop scenarios for each set of priorities . As you perform the SWOT/TOWS diagram, think about conditional factors that could significantly affect a strength, weakness, opportunity, or threat. This should be based on trends in your industry or conditions that already exist in your business. Factors that are highly prone to fluctuations should be monitored more closely, in case they change from low to high stakes very quickly.
• Back up assumptions with data . Ask your team to come prepared with specific examples or data at your strategy sessions. Not only will this allow you to measure improvement, but it helps you to gain an accurate picture of what you’re doing right and what you need to do to improve.
• Do further research . Delve deeper into the objectives in your SWOT analysis. For example, you may need market research to figure out how to differentiate your business or financial advice to understand which opportunities are best for the company .

Final thoughts

As internal and external factors change, your strategies will need to adapt to them. It’s essential to conduct a regularly scheduled SWOT Analysis of your business to make sure you’re pivoting your strategy regularly and accurately.

Searching for the right diagramming tool?

Check out Cacoo , a diagramming tool for better team collaboration.

This post was originally published on June 6, 2017, and updated most recently on December 13, 2021.

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PESTLE Analysis

Insights and resources on business analysis tools

How to Use SWOT in Business Plans

Last Updated: Jun 15, 2016 by Thomas Bush Filed Under: SWOT Analysis , Business

Building a successful business requires extensive forethought and planning. The latter, business planning, assists you in picking goals, defining strategies, and actualizing your vision. It may sound complicated to do so, but with the help of some key business analyses , especially the SWOT analysis, you can make the process much easier for yourself.

SWOT: What and Why?

If you’re a regular PESTLEAnalysis.com reader, you should know by now that SWOT analysis identifies the S trengths, W eaknesses, O pportunities, and T hreats of a business or individual venture. A well-executed SWOT analysis reveals lots of information about the circumstances you (do or will) find yourself in, and how to make the most out of them, both of which are essential in business planning.

If you are still not sold on the importance of a SWOT analysis in business, it is critical that you review this article (“ How Your Business Could Fall Without Proper SWOT Analysis ”) before continuing on.

SWOT Analysis in Business Planning / Plans

Business plans often try to answer questions like “How will we grow?”, “What will we change?”, or “What might prevent us?” The two external factors in a SWOT matrix (Opportunities and Threats) begin the process of answering these questions, thanks to their inherent relation to the future. The other two factors (Strengths and Weaknesses) — both of which are internal — also contribute to an answer, but in a less explicit way. These two factors help you pick out, amongst other things, what to make the most of and what might need working on to reach your goals.

Business Planning, Analysis, and SWOT

You can’t plan for where you want your business to be in some amount of time if you don’t know where it is now. Thankfully, business analyses are designed to help you work that out. Before actually getting started with your business plan, be sure to conduct a concise business analysis (which might also use a SWOT analysis as discussed in a previous article ) to gain some more insight into this matter.

Actually Planning with SWOT

When formulating a business plan, go through each of the variables included in a SWOT analysis, and ask how they relate to your plan. Here are a few examples for each factor:

• Does our vision correspond with what we do well?
• Are we good at what we will need to be good at?
• How will our plan make the most of what we are good at?
• Weaknesses:
• Will our business plan be hindered by certain weaknesses?
• Is it worth fixing them, or adjusting our plan to avoid them?
• Opportunities:
• What opportunities can we plan for?
• How will we make the most of unexpected, unplanned-for opportunities?
• What could prevent us from following our plan?
• How will we deal with any unexpected issues?

SWOT Models for Business Planning

Everything is better explained with lots of examples or outlines, and so we have an entire article dedicated to SWOT analysis templates for more effective, efficient business planning. Be sure to check it out for another approach to using SWOT in business.

That’s all there is to using SWOT analysis in business planning! It may seem simple, but its benefits are surprisingly apparent. Have you used a SWOT analysis for business planning or a previous venture? We’d love to hear about it down below, along with your questions and comments.

Image © Thodonal | Dreamstime.com – Business plan

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What Is a SWOT Analysis and Its Importance to Businesses

By Cristian Oana , Jan 21, 2022

You’ve heard that conducting a SWOT analysis creates the foundation for your business and marketing strategy—but what exactly is a SWOT analysis and how do you do it?

Learn what SWOT analysis is, how to conduct one and how you can integrate visuals into your SWOT analysis to persuade your audience or gain buy-in from investors—all can be done by using Venngage’s SWOT Analysis Maker .

Click to jump ahead:

What does swot stand for, what is a swot analysis, why is a swot analysis important, how do you conduct a swot analysis.

SWOT stands for Strengths, Weaknesses, Opportunities and Threats — the four key aspects of your business that you must assess to pave the way for a more productive brainstorming and strategic planning session.

Generally speaking, the SWOT analysis focuses on helping you identify and analyze the internal and external factors of a company or an organization.

When you conduct a SWOT analysis, you look at the internal factors (strengths and weaknesses) and external factors (opportunities and threats), and from there you can identify your business’s competitive advantages over your competitors and start developing your business strategy.

As such, SWOT analyses are especially useful tools for marketing departments and sales organizations . They can also be powerful tools in highly changeable industries like healthcare .

A SWOT analysis is often in the form of a quadrant or matrix, like this SWOT matrix:

Let’s take a look at what constitutes each internal and external factor of the SWOT framework.

Identify your business’s strengths

Strengths are the internal factors and resources that support a successful outcome for an organization. These are the things that you are particularly excellent at or the things that set your business apart from its competitors.

A strength brings you competitive advantages over your competitors. If all your competitors offer high-quality products, then manufacturing high-quality products is not a strength in your market. Rather, it is deemed as a necessity.

Point out your weaknesses

Weaknesses are inherent in an organization, too. Focus on your people, resources, systems and procedures, and determine which of these need improvement or must be avoided. 

A business’s weakness can come in the form of its workforce like in this SWOT analysis example:

Regularly assess your employees’ work performance using this template to enhance company productivity.

Don’t be afraid to acknowledge your weaknesses. Instead, embrace and address them. Be realistic now instead of ignoring the unpleasant truths.

Spot opportunities

Opportunities are typically born out of external situations. They are windows of possibilities, of something promising to happen. But you must be able to spot and exploit them. Do just that and you bring up your organization’s chances of trouncing the competition and, hopefully, of leading the market.

These opportunities don’t have to be big right away. Remember, every positive opportunity counts, even the small ones. What’s important is that you can grab them and take advantage of them immediately.

Use this SWOT analysis template to assist your brainstorming session. Make sure you have taken advantage of all the presented opportunities for your business.

Anticipate the threats

Threats are the total opposite of opportunities. These are factors based on your company’s external environment that could negatively impact your business.

While opportunities could allow a company to thrive, threats could stunt your company’s growth and generally jeopardize your company’s success.

External threats may include changes in the market requirements, shortage of new employees, and supply chain problems. It is vital to take action against these before these could adversely affect your company. 

For more examples of SWOT analysis templates, read on or check our blog posts: 20+ SWOT Analysis Templates, Examples & Best Practices

Return to Table of Contents

It’s a tool for strategic planning

As previously established, SWOT analyses are an effective tool for planning, brainstorming and even decision-making.

The tool works more effectively if you conduct it while bearing a specific question or objective in mind such as taking advantage of a new business opportunity, responding to new trends, implementing new technology, or dealing with a competitor’s change in operations.

The SWOT analysis example below points out the opportunities presented to a grocery delivery company. Based on this analysis, you’d recognize that the strategy in the short term should focus on attracting a larger audience by optimizing the mobile app and improving the website’s SEO.

SWOT analysis leads to a competitive advantage

Since SWOT analysis helps an organization determine the areas that perform well, the areas they pinpoint are considered to be the fundamental success factors that will give your business the competitive advantage that it deserves.

SWOT also requires you to analyze your competitors to understand where you stand on the market, thus being able to point out your competitive advantages over others.

If you’re interested in learning more about competitor analysis , check out this post: How to Create a Competitor Analysis Report (Templates Included)

This SWOT analysis template can be used to generate a diagram where you can examine the aspects of your organization that can be used more to your advantage.

It can also help you deal with your weaknesses

To help you put your organization in a better spot, conduct a SWOT analysis to identify your weaknesses so you can cut down or improve them even before they develop into a problem. As said before, be realistic in identifying your weaknesses to adequately deal with them.

SWOT analysis can ward off threats

The steps your competitors take may also be a threat to your business. Make sure you anticipate them and proactively ward off their marketing campaigns with this SWOT analysis template.

External factors such as a new government policy or your competitor’s new advertising campaign can be seen as threats to your business. Identify the threats looming around your business through a SWOT analysis. You may also find ways to ward them off depending on the strengths and weaknesses that you listed in your analysis.

Achieve your organization’s goals and objectives with the use of the information you have gathered from your SWOT analysis. Use the following steps to begin your journey.

Step 1. Establish your objective

From the beginning, you have to have a clear objective or a question in mind so you can get the most out of your SWOT analysis. For example, you may use the information you gathered to decide whether or not to push through with the launch of a new product or service to the market.

Here’s an example of a SWOT analysis conducted to examine the possibility of scaling for an apparel design business:

Step 2. Conduct research

Understand your business and the industry and market it belongs to before you begin the SWOT analysis. Brainstorm with your team, business partners, investors, and clients to get a diverse range of perspectives. Don’t forget to take your competitors into account so find time to research about them, too!

Step 3. Make a list of your business’s strengths and weaknesses.

Identify and list down your business’s strengths and weaknesses respectively. Your strengths may include those that relate to your workforce, financial resources, competitiveness, and your business location while your weaknesses may include your lack of innovative products and employee absenteeism.

Your goal should be to look back on your SWOT analysis and find that your weaknesses have already been resolved. Despite the emergence of new weaknesses over time, the fact that you have already addressed the old ones is a good indicator of your business’s growth.

Take note that your list does not need to be definitive during this part as you will still be organizing them at the fifth step.

Add what you have in your list to this SWOT analysis template:

Remember, you can always add icons or illustrations to the template to make it your own:

Or even apply your brand colors to it, using My Brand Kit :

Step 4. Make a list of your business’s potential opportunities and perceived threats.

Businesses must not fail to recognize the windows of opportunities presented to them, as well as looming threats lingering around it.

List down all possible external opportunities and threats for your business. Your opportunities may include innovative technologies, potential investors and partnerships, training programs, and a diversified marketplace while your threats may include unemployment growth, emergence of competitors, and the uncertainty of global markets.

Note that the same item could not be listed down as both an opportunity and a threat.

Add your opportunities and threats to your SWOT analysis design. If you don’t like the template above, here’s another one:

Step 5. Determine the hierarchy of priorities.

After completing the steps above, you will have four different lists—one each for strengths, weaknesses, opportunities, and threats. This is where you work out the hierarchy of importance among the issues, which are the most important ones and which can be dealt with at a later time.

Step 6. Come up with strategies addressing the problems found.

Review your prioritized list by asking how your strengths and weaknesses can take advantage of the opportunities listed and counteract the threats listed respectively. Also consider the things you would need to get control of your weaknesses to take advantage of the opportunities as well as the ways to minimize your weaknesses to push through your identified threats.

After answering those, you may begin developing your strategies to achieve your business goals and objectives.

Conducting a SWOT analysis doesn’t have to be daunting

Start brainstorming, researching and developing strategies for your business with the help of SWOT analyses. You can always customize our SWOT analysis template and add it to your report , presentation or infographic to share with colleagues or investors (and guess what, we have templates for those too!)

Start creating your own SWOT analysis for free using Venngage’s SWOT Analysis Maker —no design experience required.

How to Write a Marketing Plan

By Joe Weller | March 28, 2024

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A  marketing plan is a guide for achieving marketing initiatives on a set timeline. It includes analysis of a company's target audience, competitors, and market sector. Teams can build an organized strategy with that information to reach their goals.  

Inside this article you’ll find a detailed, step-by-step guide to writing a marketing plan, with a free, downloadable  marketing starter kit for beginners .

A  marketing plan includes analysis of the target audience, the competitors, and the market so that teams can determine the best strategy for achieving their goals. The plan’s length and detail depend on the company's size and the scope of the marketing project. A marketing plan is useful for all types of marketing, including digital, social media, new product, small business, B2C, and B2B. Follow the steps below to write a comprehensive marketing plan. 

1. Prepare for Success 

Before you begin writing your marketing plan, set yourself up for success by conducting thorough market research and assembling a team with diverse skills in marketing strategy, content creation, digital marketing, and data analysis. Be sure to consult all your team members as you progress through these steps. It might also be helpful to assign leaders to complete different sections of the plan, depending on their areas of expertise. For example, you might assign the market analysis section to a team member with strong analytical skills and experience in data analysis.  

2. Use a Marketing Plan Template

Download a free marketing plan template to ensure consistency and thoroughness in your final marketing plan.

For more template options, see this collection of  free marketing plan templates and examples.   

3. Identify Your Target Customers

To identify target customers for your marketing plan, collect information about their location, demographics (such as age, gender, and income), interests, values, and purchasing behaviors. This knowledge enables you to focus your marketing goals and tactics to meet their specific needs and preferences.

A  customer persona is a fictional representation of your ideal customer that provides valuable insights for strategic decision-making. Use one of these  customer persona templates  to craft a detailed profile of your ideal customer.   

4. Conduct a SWOT Analysis

A SWOT analysis is an important part of any marketing plan, because it helps identify a company’s strengths, weaknesses, opportunities, and threats in relation to the market environment. To start, divide a page into four quadrants and label each as strengths, weaknesses, opportunities, and threats. Next, brainstorm with your team to fill in each section. Be as honest and specific as possible, considering factors such as market trends, competition, and your own resources and capabilities. This information will allow the team to capitalize on strengths, prepare for challenges, and make sound strategic decisions throughout the marketing plan. 

See this collection of  marketing plan SWOT analysis templates  for additional guidance.   

5. Conduct a Market Analysis 

A  market analysis is an assessment of a market's size, growth, trends, customer segments, and competitor dynamics. Include it in your marketing plan to provide critical insights for strategic decision-making, helping to tailor products to customer needs, differentiate from competitors, and identify new opportunities. 

To conduct a market analysis for your marketing plan, determine each of the following factors:    

• Market Size: This is the total potential sales that a particular product or service can achieve within a defined market. Determine the market size by estimating the number of potential buyers for a particular service and multiplying that by the estimated number of purchases over a specific timeframe. (Number of Target Customers) x (Number of Purchases in a Given Time) = Market Size Imagine your company sells wireless headphones, and you estimate that the average consumer purchases a new pair every two years. If your market includes 1 million target customers, and assuming each customer buys one pair of headphones every two years, the calculation for annual market size would be as follows: (1 million target customers) x (0.5 purchases per year) = 500,000 pairs of wireless headphones per year   
• Market Growth Rate:  This measures the change in a market’s size over a specific time period and is typically expressed as a percentage. To determine the market growth rate, use the following formula: [(Current Market Size − Previous Market Size​) ÷ Previous Market Size] × 100% = Growth Rate For example, if the market for wireless headphones was worth $1 billion last year and is worth $1.1 billion this year, the market growth rate would be as follows: [($1.1 Billion – $1 Billion) ÷  $1 Billion] x 100% = 10%  

Market Share:  This is the percentage of total sales in an industry generated by a particular company over a period of time. It provides a benchmark for assessing performance relative to competitors. Use this formula for calculating market share: (Company’s Revenue ÷ Total Industry Revenue) x 100% = Market Share  

Tip:  Keep in mind that the market size, share, and growth rate are all estimates. It’s impossible to be exact. To obtain the most accurate numbers, review the latest industry reports and seek insight from experts.  

• Market Demand:  This is the amount of a product or service a consumer is willing to purchase and how much they are willing to pay for it. To determine market demand in a market analysis, begin by conducting comprehensive research on consumer behavior, preferences, and purchasing patterns related to your product or service. Use tools such as surveys, SEO analytics, and interviews to gather data on potential customer interest and willingness to pay, and analyze competitor pricing and offerings.  
• Market Trends:  This is the growth or decline direction of a product or service’s price over a specific timeframe. To identify a market trend, monitor industry developments, consumer behavior, and technological advancements over time. Review industry reports and expert analyses to understand broader market movements and future projections. Summarize these observations and include them in your plan to highlight the direction in which the market is heading.        

Market Segments:  The broader market includes specific groups, categorized by shared characteristics. Generally, there are four types of market segments: geographic, demographic, psychographic, and behavioral. In your marketing plan, detail how you'll target each segment by adapting your strategies to their unique characteristics. This targeted approach ensures more effective engagement with each segment.   

• Competitor Analysis:  A competitor analysis involves examining your competitors’ strengths, weaknesses, market positioning, product offerings, and marketing strategies. Describe how you'll conduct a comprehensive evaluation of key competitors by analyzing their market share, pricing, distribution channels, and promotional tactics. For more guidance, try downloading this competitor analysis template. Use it to identify areas where your rivals succeed and why. Their strengths indicate areas for improvement, while their weaknesses indicate opportunities.  

6. List Your SMART Goals 

Include SMART goals in your marketing plan to ensure that objectives are specific, measurable, actionable, relevant, and time-bound, providing a clear direction for strategic actions and performance evaluation. Start by identifying key performance areas that align with your overall business strategy. Then, for each goal, apply the SMART framework. 

Here are two examples of SMART marketing goals:   

• By Q4 end, increase search results page (SERP) position from 14th to the top three for keywords pertaining to our brand and lead to more organic traffic. 
• Increase social media following, reach, and engagement by 25 percent in six months and 50 percent in one year.

Learn more about SMART goals and find a customizable SMART goals worksheet  in this comprehensive  guide to writing SMART goals . 

7. Create a Marketing Strategy

A  marketing strategy is the plan for achieving your SMART goals.   

“A marketing plan should include strategic and tactical elements,” says Gayle Kalvert, Founder and CEO at  Creo Collective , a full-service marketing agency. “From a strategic standpoint, it is critical that the marketing plan aligns to the overall goals of the organization. Tactically, what initiatives will the marketing team execute, and why? Tactics with no strategy lead to spotty results and poor-quality leads.”

Use one of these  marketing strategy templates to get started. A successful marketing strategy will include the following elements: 

7a. Customer Buying Cycle

The  customer buying cycle is the path a potential customer follows from first having exposure to a product or service to becoming an advocate for it. Understanding this process allows marketers to effectively target communications and strategies at each stage in their marketing plan. 

Pro Tip: “Consider your persona’s buyer's journey and ensure marketing has a role at each stage of the journey, especially after the close,” says Kalvert. “That is when customers can become advocates, sources of referral, and great subjects for marketing content for future buyers.”

7b. Unique Selling Proposition

A  unique selling proposition (USP) is a specific benefit or advantage that sets your product or service apart from the competitors. By including a USP in a marketing plan, you help ensure that the team communicates why customers should choose your offering over others. 

For example, Google’s USP is its powerful and accurate search algorithm that delivers relevant search results faster and more efficiently than its competitors.

7c. Branding 

Branding is the development of a unique identity, image, and experience for a company. Marketers convey a brand through messaging, tone, logo, colors, and web design. The marketing strategy needs to align with the company’s brand in order to maintain consistency in messaging and experience, which ultimately builds customer trust.

7d. Marketing Mix A marketing mix refers to the set of actions that a company takes to promote its brand or product in the market, typically encapsulated by the four Ps: product, price, place, and promotion. Go through each of these steps when including the marketing mix in your strategy:  

• Product: Describe the product and the problem it solves for your target customers. What makes your product or service different from the competition? Why is it special? 
• Price: Explain how much your target customer is willing to pay for the product or service based on its real and perceived value. What do your competitors charge for a similar product? Will you run any seasonal promotions or discounts? 
• Place:  Describe where your product or service will be available for purchase by your target customers. Will you sell it online, through retail partners, or both? How will you manage logistics and supply chain to ensure your product is accessible to your target market?
• Promotion:  Detail the strategies you will use to communicate your product’s value to consumers. This includes advertising, public relations, social media marketing, email campaigns, sales promotions, and direct marketing tactics.    

7e. Channels 

Identify the specific mediums and platforms — or  channels — where you’ll share your message to your target audience. These should include distribution channels, communication channels, and engagement channels. 

As you list them, explain how they will be used to effectively reach and engage with your target audience. For example, if you’re marketing a new fitness app, one distribution channel would be a direct download from the App Store to reach fitness enthusiasts directly on their smartphones. An engagement channel could be an in-app community feature for users where they can share progress.

Here is a brief list of popular marketing channels:  

• Affiliate marketing
• Email marketing
• Social media
• Website marketing

7f. Tactics Tactics are the specific actions you will take to reach the goals outlined in your strategy. They cover everything from the creation and distribution of marketing materials to the scheduling of campaigns to the platforms used for advertising and engagement.  Detail the specific actions and tools you will use to execute your marketing strategy, along with timelines, responsibilities, and budget allocations for each activity. This includes specifying the exact steps for product promotion, customer engagement, content creation, digital marketing efforts, and any other methods chosen to reach and convert your target audience. “Equally as important as using data is to build in time and resources to be flexible,” says Kalvert. “The marketing landscape is evolving at such a rapid pace. Tactics that worked last year may not work this year. Be open to experimenting with new tactics and adjusting your approach based on feedback and results.”

8. Determine the Budget 

Start by estimating the costs associated with each tactic and channel outlined in your strategy, taking into account factors such as content creation, platform fees, and personnel costs. Next, prioritize spending based on the expected ROI for each tactic. Finally, document the budget in a clear, detailed format within your marketing plan, including an itemized list of costs for each tactic, total expenditure, and a contingency fund.

For more resources and help estimating marketing project costs, take a look at this collection of helpful free  marketing plan budget templates . 

9. Create a Calendar

Create a calendar to schedule and track deliverables. Include time for brainstorming, planning, executing, and analyzing results. List objectives, start dates, end dates, due dates, and responsible parties. Keep the calendar in a central location so that team members can easily access it.

10. List Marketing Tools and Technology

List any marketing tools or technologies your team will use to help achieve their goals. These can include email marketing software, blogging software, social media management software, or any other programs you plan to use.

11. Identify Metrics and KPIs

Identify the metrics for measuring and tracking your marketing goals. Metrics and KPIs eliminate ambiguity so that you can accurately measure progress. Select indicators that directly reflect the success of your marketing objectives, such as conversion rates, website traffic, lead generation, and customer acquisition costs.

12. Write an Executive Summary

Once you’ve completed all the sections in your marketing plan document, return to the first section to write the executive summary. Completing this section last ensures that you have a thorough understanding of all key elements before summarizing them. 

Concisely highlight the main objectives, target market, and key strategies of the plan, providing a snapshot of the market analysis and expected outcomes. Outline the budget, resources required, and the metrics for measuring success. This section serves as a compelling overview, enticing stakeholders to delve into the plan.

For more detailed information on executive summaries, see this guide to  writing an effective executive summary. You can also download a helpful template from this collection of  free executive summary templates

Marketing Starter Kit for Beginners

Download Marketing Starter Kit for Beginners

Get everything you need for creating a marketing plan with this free, downloadable marketing plan starter kit. The kit includes an executive summary template, a customer persona worksheet, a SWOT analysis template, a competitor analysis template, a SMART goals worksheet, a marketing strategy template, and a calendar template with a budget tracker, all in one easy-to-download file.

In this kit, you’ll find the following:  

• An executive summary template for Microsoft Word to help you introduce the content of your marketing plan.    
• A customer persona worksheet for Microsoft Word to collect information about your ideal customer.  
• A SWOT analysis template for Microsoft Word to guide strategic decision-making based on the company’s strengths, weaknesses, opportunities, and threats. 
• A competitor analysis template for Microsoft Word to help you compare and evaluate your competitors. 
• A SMART goals worksheet for Microsoft Word to ensure each marketing objective follows SMART guidelines. 
• A marketing strategy template for Microsoft Word to outline the plan for achieving your goals. 
• A calendar template with budget tracker for Excel where you can organize, track, and manage marketing deliverables and their costs. 
• A marketing plan template for Microsoft Word to ensure consistency and thoroughness in your final marketing plan.

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The Smartsheet platform makes it easy to plan, capture, manage, and report on work from anywhere, helping your team be more effective and get more done. Report on key metrics and get real-time visibility into work as it happens with roll-up reports, dashboards, and automated workflows built to keep your team connected and informed.

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How To Write a SWOT Analysis For a Business Plan

An acronym standing for Strengths, Weaknesses, Opportunities, and Threats, a SWOT Analysis is designed to help you analyze your company’s capabilities against the realities of your business environment. Doing so allows you to direct your business toward areas where your abilities are the strongest and your opportunities are abundant. It also allows you to develop short and long-term strategies for your business. A well-developed SWOT analysis will:

• capture business opportunities by capitalizing on business strengths
• overcome weaknesses to take advantage of business opportunities
• monitor potentially threatening outside forces while maintaining or developing internal strength response capabilities
• eliminate weaknesses to protect your business from threats

Writing a SWOT Analysis  

When writing your SWOT Analysis, we recommend involving employees with different perspectives and stakes in your company, for example, management, sales, customer service, and customers.

To write a SWOT Analysis for a business plan, we recommend following these four steps. You can use a four-square SWOT Analysis template, or if more manageable, you can make lists for each category.

Example of a four-square template:

After you’ve gathered the right group of employees together, brainstorm your company’s strengths and weaknesses and its opportunities and threats, first individually and then collectively.

Strengths and weaknesses are internal to your company and can change over time with work. Examples of internal factors include:

• Company culture
• Company image
• Operational efficiency
• Operational capacity
• Brand awareness
• Market share
• Financial resources
• Organizational structure

Opportunities and threats are external, happening whether you want them to or not, and can’t be changed. Examples of external factors include:

• Societal changes
• Competitors
• Economic environment
• Government regulations
• Market trends

Strengths refer to the positive, tangible and intangible attributes internal to your company that are within your control.

To help you determine what your company’s strengths are, ask yourself:

• What does the company do well?
• The positive attributes of your employees (knowledge, background, education, credentials, network, reputation, or skills)
• The tangible assets of the company (capital, credit, existing customers or distribution channels, patents, or technology)
• What advantages does the company have over our competitors?
• Do we have strong research and development capabilities? What about manufacturing facilities?
• What other positive aspects, internal to the business, add value or offer us a competitive advantage?

Any aspect of your business that detracts from the value you offer or places you at a competitive disadvantage is a weakness. To determine your company’s weaknesses, ask yourself these questions:

• What factors detract from a competitive edge?
• To accomplish my objectives or compete with my strongest competitor, what areas need to improve?
• What does the business lack? Is it expertise? Maybe it’s access to skills or technology?
• Does the company have limited resources?
• Is my business in a poor location?

Opportunities

Opportunities are attractive external factors that denote reasons your business is likely to thrive. To identify your business opportunities, ask yourself:

• What opportunities are there in my market or my environment that I can benefit from?
• Does my business have a positive perception?
• Has my market recently grown, or have there been other changes that have created an opportunity?
• Is this opportunity ongoing or time-limited? How critical is my timing?

Any external factor beyond your control that could place your strategy, or the business itself, at risk is a threat. Although you have no control over threats, you can benefit by having a contingency plan to address them if and when they occur. To identify threats, ask yourself:

• Who are my existing or potential competitors?
• What factors beyond my control could place my business at risk?
• Are there challenges created by an unfavourable trend or development that could lead to declining revenues or profits?
• What situations could threaten my marketing efforts?
• Have supplier prices or the availability of raw materials significantly changed?
• Are there any shifts in consumer behaviour, the economy, or government regulations that could reduce my sales?
• Are any of my products, equipment, or services obsolete due to the introduction of a new product or technology in the market?

Once you’ve brainstormed your lists of strengths, weaknesses, opportunities, and threats, we recommend ranking them through a voting process. At the end of this process, you should have a prioritized list of ideas, with one person, usually the CEO, having the final call on priority.

Divide your strengths into two groups:

• Group 1: Strengths that can help you take advantage of opportunities facing your business.
• Group 2: Strengths that can help you head off potential threats.

Divide your weaknesses into two groups:

• Group 1: Weaknesses that require improvement before you can take advantage of opportunities.
• Group 2: Weaknesses that you need to completely and quickly overhaul and convert into strengths to avert potential threats to your business.

Continually refer to your lists as you make decisions that contribute to your business, including developing strategies and actions for capitalizing on opportunities. Questions that can guide your decision making include:

• Do strengths open any opportunities?
• How can we convert weaknesses to strengths?
• What do we have to do to take advantage of opportunities?
• How can we best neutralize threats?

SWOT Analysis For a Business Plan Conclusion

Once you have finalized your SWOT Analysis and added it to your business plan, don’t just leave it and forget it. A SWOT Analysis is a crucial element in any business plan and should be revisited regularly, at least annually.

Suppose your business is facing significant changes in the marketplace or competitive conditions, experiencing growth problems, or failing to meet goals. In that case, you may want to revisit your SWOT Analysis more frequently.

It should reflect the world around you as it is, not the way it was. It’s an invaluable tool for leveraging your company’s strengths, minimizing threats, taking advantage of available opportunities, strategic planning, and determining company objectives.

At Bsbcon, we are available to provide support and guidance with your company’s SWOT Analysis, ensuring that it reflects the current state of your business and considers all factors needed to ensure your business’s short and long-term goals and successes. Once your SWOT Analysis is complete, we will work with you to incorporate it seamlessly into your business plan.

Each of our business plans are tailor-made (no templates or plugins!) and designed to be easily implementable in practice. We have business plans for bank loans, investors, strategic purposes, immigration, and more.

Contact us today to get started on accomplishing everything you’ve dreamed with consumer-tested, expert panel-approved business plans that outline your steps to success.

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How to Write an Online Business Plan in 2024

Written by Vanessa Petersen on July 26, 2023 Blog , Sell Online .

You’ve committed to turning your ecommerce or online business idea into something real. You want your small business to produce revenue and change the course of your life, but what’s your first step in realizing your dream? Developing a plan. If you’re not sure about how to write an online business plan, you’ve come to the right place.

One of the most essential tasks involved in starting any kind of business is to write a business plan. An online business plan won’t look that different from a traditional business plan and will include many of the same elements.

In this post, we’ll show you how to write an online business plan, including all the components and sections. We’ll also walk through how WooCommerce can help you put your plan to action and achieve your business goals.

Why write a business plan? 

Starting your own business is a great experience and something that will shape your life, fill you with self-confidence and independence, and inspire other people around you. A new business is also a serious endeavor that will take time, money, sweat, lots of decisions, and a degree of risk.

A traditional business plan template helps you document and keep track of your business goals, challenges, opportunities, and all the steps and processes involved with making your idea work. It will help you conduct thorough market research and set you up for success.

When you write a business plan, it can confirm that you’ve found the best online business to start , or provide clarity about the need to pivot.

It details all the things you will need to do in order to successfully launch and grow your business, and may include revenue projections, timelines for specific goals, concept art for products, and architectural drawings for any brick and mortar aspects of your business. 

Business plans help create a structure for your company’s development and keep you grounded in reality, focused, and not distracted by less important matters. 

If you have more than one person helping run the business, the business plan also keeps everyone unified around the same set of goals and objectives. 

Another reason to write a business plan is for situations where you are presenting your idea to someone else and asking them to invest. In that scenario, your business plan is also a sort of sales document. It makes the argument for why your business idea is so good and well-considered that an investor should want to be a part of it. 

But even if you’re self-funding your entire business — which is more common with online businesses — you still want to write the plan for the reasons given earlier.

The benefits of running an online business

Starting an online business or ecommerce store offers many of the same great benefits as any other business, but without as much risk. If you’re thinking of starting a business, here’s why an online one is a great option:

It has low startup costs

Without a storefront, you eliminate so many costs of running a business. With all the bills that come with having property — like rent, parking, furnishings and decor, etc. — there’s a much higher investment required to start a brick-and-mortar-based business. Online businesses still have startup costs, but they are much lower. 

It gives you freedom over your schedule

With an online business, you have more freedom to set your own hours, because you don’t always have to be open during the usual times. You can build your business to suit the lifestyle you want. Rearrange your time to get things done in the fastest possible way and take time off when you need it. 

You can start small

Once you have a location, it’s yours, and you have to make it work. With an online business, you can start very small, offering just a few products or even just a single service. You can more easily test the waters without making huge commitments with inventory, and other physical investments.

You can more easily pivot

If your online or ecommerce business doesn’t do as well as you expected, it’s easier to pivot and adapt to something new because you haven’t committed so much to making your original idea work. There are many business success stories where the business owner adjusted their idea after gaining some experience, and then it took off. It’s a lot easier to do that when you aren’t tied to a physical location.

But, there’s one thing online businesses have in common with every other type of business: You need a robust business plan to help guide your idea from concept to a successful reality that makes money and fulfills your dreams and goals. 

So, let’s get into business planning. 

How do I write my own online business plan?

Most formal business plans and business plan templates include seven sections, plus an executive summary. You’ll need to keep in mind who you’re writing your business plan for. If you are taking this to potential investors or will be seeking a business loan, your business plan needs to sell the idea of your business as a great investment opportunity and communicate the skills, expertise, and commitment you personally bring to the table. 

Here are the key sections of a traditional business plan format:

• Executive summary
• Company description
• Market analysis
• Organization and management
• Service and product line
• Sales and marketing plans
• Financial projections
• Funding request (if working with investors or partners)

Here’s a brief look at each step of creating an online business plan:

Draft an executive summary

In the executive summary, the first section of almost every business plan template, you’ll present your vision and focus on building excitement. If the business plan is a sales document, the executive summary is the lead. It gets the reader engaged and excited to hear more. 

Your executive summary should achieve two goals:

• Deliver the basic facts about your business
• Motivate the reader to keep going and get them excited about your idea

What facts should you include? Whatever helps the reader understand your business idea. Describe the industry and niche. Mention the target market. Briefly state the needs or problems your products and services will be solving. Touch on the potential for growth in terms of revenue and customers. 

For motivation, describe your mission statement and company values. What will set you apart from the competition? What is your value proposition as a business owner? What makes you different? Again — keep this brief. You’ll elaborate later. 

It might be a good move to write all the other sections first, then finish with the executive summary so it will be the most concise and best version of how you describe your business.

Write a company description

Here, you’ll give a brief overview of your company. What are your strengths, skills, and areas of expertise as a business owner that will position you for success? If you have a compelling story behind why you’re starting your business, you can include that too.

Conduct a SWOT analysis 

If you’re not sure where to start, consider doing a SWOT analysis , which is a diagram outlining your strengths, weaknesses, opportunities, and threats. 

It’s a common part of many business plans and will help paint a realistic picture of what your business can achieve, and what stands in the way. You won’t include all of this in the company description, but your strengths and opportunities may fit here. 

Create a mission and vision statement

The company description is also the place to create a mission statement and a vision statement. What’s the difference between these? 

The vision is where you’re going, the mission is how you’ll get there. A vision statement paints a picture of a future reality for your customers and perhaps the world at large, as a result of your company’s influence. A mission statement expresses how you will achieve that.

The company description can elaborate on your vision and mission beyond just a single sentence, and later you can fine-tune what you write into a succinct pair of statements. Feeling some writer’s block? See company description templates by industry for some inspiration.

Include any unique attributes

If your company will involve particular attributes such as manufacturing, supply chains, dropshipping, affiliates, coaching or advising, online courses, or other relevant particulars, include that in your company description, too. 

State your business location, industry, niche, and other details

Also, state the location of your business, even though it’s online. Name your industry and niche target market again, and describe the nature of your company. For example, is it an ecommerce business, a consulting firm, delivery service, wholesale, or ad-based website? These are just some of many types of online business structures. 

You may also want to include whether your business is in any special class of business that might position it for special loan or grant opportunities like women-owned businesses or veteran-owned businesses.

After reading your description, readers should have a good understanding of what your business is about, why it exists, and how it works. Here’s a detailed look at company descriptions , with an example.

Perform a market analysis

A market analysis uses industry research to assess the scope of your business’s target market and describe the current competition in your industry. It can help you estimate the potential for success and prepare for the challenges you may face when you launch your online business or ecommerce shop.

Doing this research, and including it your business plan, can also help you:

• Identify industry trends
• Pinpoint opportunities 
• Diminish risks and reduce costs
• Generate new ideas for products and services
• Learn from the failures and shortcomings of your competitors
• Find ways to stand out from your competitors
• Discover new markets
• Refine your marketing plans

Now let’s dig into the elements involved in a thorough market analysis.

Understand your audience

Here, you will explain in detail who your target customers are and why they want or need what you’ll be selling. What problems or needs does your product solve? What will motivate people to buy from you? And why can’t they get it somewhere else just as easily? An ecommerce business competes against other ecommerce businesses as well as brick-and-mortar stores and shopping malls. Stores with omnichannel strategies compete with both. Why would someone choose you?

Share your key customer demographics, psychographics, and interests. Who will you be serving? What drives them? 

What are their values? If your product, service, or personal brand will appeal to a customer segment that also shares particular values, that’s a strength, not a weakness, and you can use that to win them over. 

Perform customer segmentation

Break down different categories of target customers your business plans to serve. One category could be age. Another might be life situations such as retirees, parents, divorcees, or living with older relatives. You could create a segment of people with particular health conditions, or who live certain lifestyles. 

But you can also get way more specific than that. Runners are different from hikers, who are different from bikers, yoga enthusiasts, and gym enthusiasts. Different supplements, philosophies about food, motivations for eating various foods — all of these present near endless possibilities for more narrowly defining your customer segments, all under the broad category of ‘health.’ And you might serve multiple segments. 

The more customer segments you know, the more effectively you can market to them. In an online store, good product descriptions call out the various customer segments that product is designed for.

Also, give a sense of the potential size of your target market. How many people need what you’re selling? Show how this market is large enough to justify your business and drive revenue. You might do this by studying revenue reports from other companies in your industry. Or look at specific products related to yours and research their sales and revenue performance. 

You may also perform a survey of some kind, or an online quiz, and use that to express the needs your potential customers have that aren’t currently being met.

Perform a competitive analysis

Study your competition. What are they doing well? What areas are they underserving? Where are they underperforming? Make note of what other companies in your industry are struggling with or failing at so that you can deliver something more valuable and gain a competitive advantage.

It could be product quality, customer service, or selection. Maybe their ecommerce store is badly designed and hard to use. Perhaps there’s a huge industry serving the masses, but customers who have more particular tastes or needs aren’t being well-served by the big companies. Those customers might spend more on something that delivers what they really want. 

Maybe your key competition has been rocked by scandal. Maybe a company went out of business, was sold, or closed down due to retirement and there’s an opening in the market you want to leverage. 

The main point of the competitive analysis is to persuade investors that there’s an underserved market that your business plans to cater to. You must be able to promise something that no one else is currently delivering. Otherwise, why should your business exist? Put them at ease by demonstrating proper market research.

Refer to your SWOT analysis and present any potential threats from the competition here, too.

Outline management and organizational structure

Next, present your management and legal structure. Is your company an LLC, sole proprietorship, S corporation, partnership, or some other arrangement? Who’s in charge of what? If you have different departments, list out the leadership for each one. If relevant, you might even include some information about the expertise of your leaders concerning the areas under their charge and the tasks they’ll be performing.

Remember — if your business plan will be used to persuade investors to help fund your business idea, this sort of information will reassure them that your company has strong and competent leadership. 

If there’s a chain of command, use a diagram or other method for laying out who reports to whom. 

List your products and services

What are you selling? You’ll touch on this briefly in the earlier sections, but here is where you’ll expand on the details. If you have an array of similar products, such as food flavors or clothing variations, list as many as seem relevant. But focus on the spirit of the business plan — you’re simply communicating what your business is about, not listing every SKU in your projected inventory. 

Also, include information about your products such as quality, durability, expirations, patents, and whatever else will give a clear picture of what you’re selling.

For service businesses and memberships that may include multiple packages, bundles, or tiers, describe each of these so your readers get a sense of how you’ll appeal to different types of customers and price points. 

Develop a sales and marketing strategy

Having products is great, but how do you intend to sell them? How will people find your business? How will anyone know you exist? And once they know, what will motivate them to buy from you and not from your competition? What is your unique value proposition — the thing that sets you apart from your direct competitors?

You’ll need to develop an initial marketing plan to help promote your business, products, and services to your target customers.

And remember, competition isn’t limited just to other businesses. Sometimes, competition is against the customer’s time, or their budget, or mere indifference — the conflict between doing something and doing nothing. Your SWOT analysis should touch on several of these potential barriers to the success of your online business.

Your marketing plan will obviously change over time, but give your readers and potential investors a sense of how you plan to launch and grow your business. 

Discuss media channels you plan to use, such as pay-per-click (PPC) ads , social media , email marketing , affiliate marketing , direct mail, referrals, joint ventures, search engine optimization (SEO), webinars, influencer marketing , and live events. Describe the ones you actually plan to use, and explain the core strategy you’ll begin with and how you will measure success. 

Also, include a sense of your marketing budget. If you will have a dedicated marketing team, or actual sales professionals using a particular process or sales script, discuss that as well. 

For ecommerce businesses, include a discussion of how you plan to leverage platforms like WooCommerce, which features a host of extensions that can help manage your business , engage customers, save money, and promote growth .

Make financial projections

You’ve made a lot of claims in your business plan, but how will your investors be convinced of your future success? At some point, you have to show them the money. 

If this is a brand new business with no income, where will your finances come from for the first year? Give realistic financial projections for anticipated profits and losses, as well as growth expectations for the first five years. Include financial documents if you have them, including profit and loss statements, balance sheets, and cash flow statements. Include costs of employment, manufacturing, and other investments both one-time and ongoing.

Your financial projections should reference your:

• market analysis 
• anticipated sales volume 

Investors will feel more confident when they can see your business plan does not rely entirely on just one or two ‘wins.’ For example, if your entire plan hinges on selling on eBay or Amazon , what happens if Amazon suspends your store, changes the terms, or you struggle to get noticed there? 

If your plan depends on winning over a few Instagram influencers, what if they don’t come through? It’s really easy to say what you hope will happen. But actually making it happen is another thing. Business success happens more easily when you apply a multi-channel marketing and sales approach. 

Your financial projections will feel based in reality, when you can demonstrate some prior successes, either in other businesses you’ve already launched, test audiences, local sales you made, prior experience, or data from other businesses. 

Explain your funding request — if applicable

If you intend to ask investors to help fund your business idea, present your request in the final main section of your business plan. If you’ve already secured funding from other sources, include that here as well. An investor will feel better knowing they are not the only one who believes in the potential of your business. 

Will your funding request be for a one-time payment, monthly, annually, or at some other interval? How do you plan to repay their investment? Will you allow them to charge interest? How much ROI can you promise them? 

How WooCommerce can help

WooCommerce can help you build a scalable online business that supports your business plan. No matter what you’re selling, WooCommerce offers a suite of flexible tools that allows you to customize your store to meet your needs and goals. 

Here are just some of the benefits your business will enjoy when you choose to build your store with WooCommerce:

• Sell absolutely anything you can imagine . From physical items and digital downloads to subscriptions, memberships, bookings, courses, and affiliate products, WooCommerce provides everything you need. Want to run a wholesale store? You can do that, too!
• Harness the power of WordPress . Since WooCommerce is a plugin specifically for WordPress, you can take advantage of powerful features like the block editor and blogging capabilities. 
• Capture payments securely. Choose from a large number of payment gateways, from popular options like PayPal and Stripe, to more niche processors for specific locations and types of regulated products. And with tools like WooPayments , you can keep customers on-site, capture a variety of currencies, and even accept digital wallets like Apple Pay and Google Pay.
• Customize your shipping options. Offer free shipping, charge based on weight, set fixed prices, or calculate shipping costs based on real-time carrier rates. You can even use extensions like Table Rate Shipping to create complicated shipping rules based on conditions that you set. And with WooCommerce Shipping , you benefit from discounted shipping labels and the ability to print right from your dashboard. 
• Connect to your social media channels. Use extensions to sync your store with social media platforms like Facebook, Instagram, and Pinterest. You can even sell on those platforms alongside your store without having to update inventory and information manually.
• Integrate with marketing tools. Quickly connect your store to any number of marketing tools, from email platforms like MailPoet to CRMs like Jetpack CRM . You can also implement a number of marketing strategies, from abandoned cart emails to loyalty programs.
• Keep track of your numbers. Ecommerce accounting is a big part of running an online business. While you can easily view data in your dashboard, you can also sync with tools like QuickBooks to make your accountant’s life a little bit easier.
• Manage inventory. Update your inventory levels manually or connect to tools like Scanventory to sync with your warehouse. Running low or out of stock? Add a wishlist option so customers get an alert as soon as it’s available.

As you can see, WooCommerce is well-equipped to handle any type of online store and support you as you grow. Here are a few more reasons that WooCommerce should be your go-to choice for implementing the ecommerce side of your online business plan:

WooCommerce itself is free! Many extensions for WooCommerce can also be found for free in the WordPress.org plugins library or on the Woo Marketplace . If you need to start your website with a limited budget, but want to build on a platform that can grow to support a thriving, high-traffic store, WooCommerce is an excellent option.

You have full control over your store

Unlike other ecommerce solutions that are tied to the platform’s own web hosting, WooCommerce is designed to be used with WordPress along with any hosting provider of your choice. You are also free to use whatever payment processor you want without any additional fees from WooCommerce. You can also customize your site’s appearance and functionality more extensively than you can with other ecommerce platforms and with less (or no) coding knowledge.

Thousands of free and premium extensions

There are over 800 free and premium extensions for WooCommerce on WooCommerce.com alone and over 1,000 in the WordPress.org plugins library . There are also hundreds of independent developers and agencies that offer premium and custom extensions for WooCommerce so that you can customize your store with the exact features you need. 

Excellent support and large community of users

WooCommerce is used by over 3.9 million stores — 23% of all online stores worldwide . The support team is available to answer questions and the documentation library is extensive and thorough. There are also plenty of independent resources for learning how to use WordPress and WooCommerce.

Dedicate time and resources to put your online business plan in action

A successful business plan is one that empowers and guides the business owner to launch their online or ecommerce business, and possibly secure funding. But it only works if you use it.

One advantage of starting an ecommerce store or online business is that you aren’t as locked down by deadlines. With a physical location, once you start paying the rent, you better have your business plan ready to put into action. 

But the beauty of being online is that you have more flexibility on the front end. Despite having more wiggle room with your timelines, you still need to keep your momentum going forward. Staying on track with your business projects and goals is one of the keys to reaching profitability sooner and turning your business plan into reality. A few quick tips:

• Schedule your time. Block out hours and specific days to work on your business.
• Treat it like a job, not a hobby. Build on your momentum week after week.
• Always keep learning. Research your industry, competition, target audience, and potential customers. Learn marketing — you can never know too much.
• Try stuff! Take risks, make calls, create campaigns, write content.

Your business plan template should give you a concrete list of tasks and business objectives. Once you write a business plan, then you can implement it.

Frequently asked questions about writing an online business plan

What are the seven steps of a business plan.

The seven key elements of a business plan are the executive summary, company description, market analysis, organization and management, services and products, marketing plan, and financial projections. If you’re making a funding request, that would be an eighth section.

Where can I find business plan templates?

You can find a free business plan template online, for general business plans as well as for specific industries. However, since each business is different and your plan must be authentic and specific to your company — a business plan template can only get you so far. 

If you need design inspiration for your own custom business plan template or want to start with a pre-designed template that you can customize, you can purchase one for a relatively low cost through a stock resources site like Envato Market or Creative Market .

Do I need a business plan if I am already running an online business or ecommerce shop?

Business plans aren’t only for people who are launching new businesses. You can create a business plan at any time to help you maintain or change the direction of your store or just to get a better picture of the health of your business. Below are a few different types of business plans that you might want to consider for your established online business:

• Operational business plan. Outlines the structure of your business operations, staffing, and logistics.
• Feasibility plan. Feasibility plans are like mini business plans that cover new business ideas and outline steps for implementation.
• Growth business plan. This plan is for businesses that want to demonstrate opportunities and plans for growth to attract investors.
• Maturing business plan. This plan is for businesses looking to merge with or acquire other companies, significantly expand, or go public.
• Strategic business plan. Any time your business wants to shift strategies regarding products or marketing or any other major changes to your previous business plan, you’ll want to create a new strategic business plan to address your new goals and the steps involved in achieving them.

What software should I use for my online business plan?

Your business plan should include some images, graphs, and graphic elements in the layout, so you’ll want to at least use word processing software to put your business plan together. If you have access to Google Workspace, Microsoft 365, Canva, or Adobe Creative Cloud, you’ll have some other options that might lead to a more professional layout.

Here’s a list of free and paid software that can help you put together your online business plan outline:

What do investors want to see in a business plan?

The most important piece of information to show investors in your business plan is potential for profitability. Investors don’t want to throw money at a sinking ship, no matter how cool and exciting the business sounds. 

Most investors also want to make sure that they’ll see a decent return on their investment in a relatively short time period — probably around 5-7 years. How much of a return they’ll expect will depend on your industry and what kind of investor they are. 

Investors will also want to see that you clearly understand your business, your industry, and that you have concrete, actionable steps for achieving, maintaining, and growing profitability. They’ll want to make sure that the key people on your team also understand your business and the roles they play and they’ll want to see that each person has a good amount of experience in their field and the required skill sets to fulfill their job duties, if not go above and beyond. 

Any details you can include that highlight unique aspects of your business will also be important. Any area where you have a competitive edge, are offering a unique or proprietary solution, have established any celebrity endorsements, have the backing of other investors, or have secured special grants will be of special interest to investors.

Create your plan for success

Now that you understand what goes into creating a formal business plan, it’s time to write one! Take the time to think through and consider each aspect of the list included in this article, and you’ll be well on your way to finding success.

And WooCommerce is here to support your business every step of the way, with powerful and flexible tools that help your business grow. Start selling online today !

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