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SWOT analysis: Examples and templates

Alicia Raeburn contributor headshot

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

Strengths, weaknesses, opportunities, and threats

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.

[Inline illustration] SWOT analysis (Example)

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.

Why is a SWOT analysis important?

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. 

Don’t forget, a bit of creativity and collaboration can go a long way. Encourage your team to think outside of the box with 100+ team motivational quotes .

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

Caroline Forsey

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.

man conducting swot analysis for his business

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.

→ Download Now: Market Research Templates [Free Kit]

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.

swot analysis on business plan

Free SWOT Analysis Template

A free SWOT analysis template, plus other helpful market research resources.

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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.

swot analysis chart: strengths

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.

swot analysis chart: weaknesses

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.

swot analysis chart: opportunities

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.

swot analysis chart: threats

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.

swot analysis on business plan

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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.

HubSpot’s free SWOT analysis template explains how to do a SWOT analysis.

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

swot analysis chart: hubspot swot analysis template

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.

An example SWOT analysis of 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:

An example SWOT analysis for Starbucks.

Download this Template for Free

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.

A SWOT analysis example for a restaurant small business.

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.

A SWOT analysis example 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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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

These frameworks are essential to fundamentally analyzing companies

swot analysis on business plan

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 analysis on business plan

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.

SWOT (strengths, weaknesses, opportunities, and threats) analysis is a method for identifying and analyzing internal strengths and weaknesses and external opportunities and threats that shape current and future operations and help develop strategic goals. SWOT analyses are not limited to companies. Individuals can also use SWOT analysis to engage in constructive introspection and form personal improvement goals.

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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SWOT Analysis

Understanding your business, informing your strategy.

By the Mind Tools Content Team

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.

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.

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.

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 (2)

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

Leslie Bartnicki

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

Posted february 2, 2021 by noah parsons.

swot analysis on business plan

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.

Strengths, Weaknesses, Opportunities and Threats analyzed in a 2 by 2 grid to define them for your business.

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.

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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

UPer Crust Pies SWOT analysis example

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.

swot template download link

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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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:

four square template business plan

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.

swot analysis on business plan

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.

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Written by Mary Kate Miller | June 29, 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.

swot analysis on business plan

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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SWOT Analysis: Definitions, Example & Templates

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What Is a SWOT Analysis?

A SWOT analysis is a technique that is used in strategic planning. It helps to identify the strengths, weaknesses, opportunities and threats of a business using a SWOT matrix. SWOT is also called a situational analysis in business planning because it captures the internal and external factors that make up the business environment of a company to provide an overview of its current state or current situation. In addition, a SWOT analysis helps to identify competitive advantages that your business or project plan might have and specify its objectives based on its strengths, weaknesses, opportunities and threats.

swot analysis on business plan

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SWOT Analysis Template

Use this free SWOT Analysis Template for Word to manage your projects better.

SWOT Acronym

SWOT stands for strengths, weaknesses, opportunities and threats. Here’s a quick explanation of how these four categories describe the environment of a project or business.

Strengths are one of the two internal factors you’ll map out in your SWOT analysis. It speaks to where you have a competitive advantage in your project or organization.

Weaknesses are the second half of your internal review. Here, you will look at where you’re falling short in your project or business planning.

Opportunities

Opportunities are the first half of your exploration of external factors impacting your business or project. Here, you’ll be looking for what in the business environment you can exploit to your advantage.

Threats are the second half of external factors in the business environment that can harm your project or organization.

The SWOT Matrix

A SWOT matrix is another way of saying SWOT analysis. The SWOT matrix is a term to describe the structure in which the SWOT analysis is reported. That is, the SWOT matrix is a box or shape that’s divided into four quadrants that represent strengths, weaknesses, opportunities and threats to the project or organization.

SWOT Analysis Example

Let’s look at a SWOT analysis in the real world to give us a better picture of what a SWOT analysis is and how it works. Let’s take a soda company that is well-established in the marketplace. Below is our SWOT analysis.

  • Strengths: High brand recognition, the majority share of the market and a variety of products.
  • Weaknesses: Going against health trends, unable to formulate a healthy version of its top-selling product.
  • Opportunities: The health market is wide open for them.
  • Threats: They are a late entry into the health market, which has already strong brand leaders, and their brand has an unhealthy image.

Considering the dominance of this product, the company should develop and market a health-conscious beverage sooner than later. It will help them to remove the tarnish to their brand and open up a huge potential for growth.

Why Use SWOT?

There are many reasons that the SWOT technique is used. For one, it can help explore new solutions to a problem as SWOT identifies barriers that limit goals and objectives.

In order to conduct an accurate SWOT analysis, you need accurate input. ProjectManager is work and project management software that delivers real-time data for more insightful decision-making. Our dashboard automatically collects and calculates project metrics and displays them in easy-to-read graphs and charts so you can make business decisions with live not date information. There’s no setup required as with inferior software, so get started now for free!

ProjectManager's dashboard view that's helpful for SWOT analyses

If you need to decide on a direction that’s more effective, a SWOT analysis can help you make that choice. It also helps to reveal possibilities and limitations for change. When thinking of revising plans, SWOT can be used to navigate systems, communities, organizations and more. It’s also a great way to brainstorm.

If you’re looking to conduct a SWOT analysis, you’ll need a SWOT analysis template . ProjectManager has dozens of free project management templates that address every stage of a project. Our free SWOT analysis template for Word gives you space to list all the strengths, weaknesses, opportunities and threats to your project or organization. Download your free SWOT template for Word today and get started on your strategic planning.

ProjectManager's free SWOT template

How to Use a SWOT Analysis

Execute a SWOT analysis with a matrix that has rows for internal organizational issues and external environmental issues. Make sure to add columns to collect what is helpful and harmful.

As a SWOT analysis example, think about a digital marketing agency. You can collect the company’s strengths, weaknesses, opportunities and threats—both internally and externally.

The next step is to take this data and build a strategy based on it. With a clear picture of where you stand in context, which has been mapped out on the SWOT matrix, it’s then possible to find a winning path through this landscape.

SWOT Analysis Video

Jennifer Bridges, shows you the what, why and how. She also includes a SWOT analysis example in the video, so be sure to watch it!

Here’s a screenshot of the whiteboard for your reference.

what is swot and how can it help your business analysis?

Transcription

Today, we’re talking about how to perform a SWOT analysis. But before we walk through how to perform one, I wanna talk about what one is and why it’s so important because I really do believe they’re so powerful and underutilized.

So first of all, a SWOT analysis is a technique and it’s used for strategic planning and analysis. So it helps to identify the strengths, weaknesses, opportunities, and threats, hence the SWOT.

It’s related to business competition and project planning. And it helps to specify the objectives of a business venture or project and to identify the internal and external factors that are favorable or unfavorable to achieving these objectives.

So let’s talk about why this is so powerful to use. First of all, they can be used to explore new solutions to problems, to identify barriers that could limit the goals and objectives, and help to decide on a direction that will be most effective. It also helps to reveal possibilities and limitations for change, to revise plans to best navigate systems, communication, or even organizations, and act as a brainstorming device.

So sometimes you will see the SWOT identified in a matrix, a 2 x 2 matrix. So if the SWOTs again, strengths, weaknesses, opportunities, and threats, we look at what’s helpful and what’s harmful. We also look at the internal which is representative of the organization, external, which is your environment. So let’s walk through an example.

So one of my clients is a digital marketing agency and they were looking at competition where best to utilize their services and address some of the things that were creating barriers to their growth or to be able to scale. So some of their strengths were having a reputation in the marketplace and they had the expertise and high level of expertise in the agency.

But the weaknesses were a shortage of experienced consultants available that they could hire when they want to scale. Another weakness was they were unable to handle too many different projects at a time because of the shortage of resources that had the expertise.

Some of the opportunities that were available to them are that they were well established, they had a well-established position with a well-defined niche so people came to them and that brought a lot of opportunities for growth for them.

It also identified a market for projects using traditional marketing. So where they went to look at other opportunities for growth because the digital marketing had some limitations, they went back and added the traditional marketing, which there are more resources out there with the expertise. So if they scaled and grew that, those were available.

Some of the threats were that there are a lot of larger agencies out there who use less experienced consultants. So they didn’t go for the high expertise. They went for the ones, maybe new into it, that they were training and teaching. And then another threat was there are more smaller agencies popping up all the time that were seeking to enter that market.

So, as you can see, by identifying the strengths, the weaknesses, opportunities, and threats, it not only gives you the means to plan and brainstorm growth, but it helps you in your next steps to really build out the strategies to avoid the limitations or avoid the threats and really leverage those opportunities.

So you can see the power of a SWOT analysis. And if you need additional resources on a SWOT analysis, then sign up for our software now at ProjectManager.

Click here to browse ProjectManager's free templates

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Using a SWOT analysis to develop core business strategies

Brandi Gratis

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.

colorful SWOT analysis

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.

pastel colored SWOT analysis

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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How to Write a SWOT Analysis (Template and Examples Included)

#scribendiinc

Written by  Scribendi

Planning for the Future

Where do you see yourself in five years? How about your career? Your business? 

These questions keep a staggering amount of people awake at night. All too often, the future can seem like a dark, ominous cloud that looms just out of view. As the old proverb goes, we fear the unknown—and little can possibly be more unknowable than the future.

While there is no crystal ball that can accurately predict future market trends or the steps you should take to optimize your productivity and sharpen your competitive edge, we can offer some advice: Reframe the question. Rather than trying to pinpoint where you think you might be in five years, think about where you want to be at that point in time. Once you have a destination in mind, you can start planning a route to get there. After all, maps are great tools, but they can't help you if you don't know where you're going.

So, what's the metaphorical map in this scenario? We present to you the SWOT (strengths, weaknesses, opportunities, and threats) analysis.

How to Write a SWOT Analysis

SWOT analyses are great strategic tools that are useful in project planning, business development , financial strategizing, and personal advancement . Simple, honest, and to-the-point, they facilitate a profound understanding of your or your business's current standing. Essentially, a SWOT analysis is a comparative list of all your strengths, weaknesses, opportunities, and threats.

There's more power in this process than you might think. You may be only hazily aware of your own strengths and weaknesses. However, thoughtfully recording and reflecting on them creates a thorough, conscious familiarity with both the resources available to you and the obstacles standing in your way. This awareness allows you to map out a path toward your goals with great precision and purpose. Writing a SWOT analysis will help you clearly evaluate whether your goals are feasible according to your resources and needs.

In this guide, we'll break down exactly how to write a SWOT analysis and provide a few examples along the way. Feel free to use our SWOT analysis template, given below, to write your own!

Our SWOT Analysis Template

swot analysis on business plan

Your list of strengths should focus on your current resources and abilities. It should relate to things that you do or that your company does well. These might be your or your company's accomplishments—both great and small—and the assets that you or your company have. Your strengths give you your greatest edge; they are the resources that propel you forward and that you can continue to develop as you progress.

When you draw up your first SWOT analysis, you may find yourself at a loss. Don't worry—it's difficult for most people to come up with an objective list of strengths and weaknesses on the spot. For your convenience, we've included a list of questions you can ask yourself to get started.

These questions should help you identify a few of your strengths. Remember, while our example questions mostly relate to business strengths, they can also apply to personal strengths. Go ahead and boast as much as you can.

  • What sets your company apart from others?
  • What do you have that other companies don't?
  • What are you most proud of about your company?
  • What makes clients come back to you?
  • What does your company do well?
  • What assets do you have access to?
  • What qualities does your company have that other companies try to emulate?
  • What has always been easy for your company? 

Listing your weaknesses might be a little more uncomfortable than detailing your strengths, but trust us—doing so will help you in the long run. Understanding the obstacles in your path and the elements of your business or skills you may need to improve is just as important as appreciating your strengths. Once you're aware of your weaknesses, you can start working on them and building your next steps around them.

Your list of weaknesses should pertain to any current problems and challenges. Check out the list of questions below—it should give you an idea of where to start. Again, if you'd rather focus on your personal or career growth, feel free to alter these questions to suit your needs.

  • What makes your company blend in with its competition?
  • What do other companies have that you don't?
  • What are the most common criticisms that you receive from clients?
  • Why have certain clients not returned to you?
  • What does your company need to improve upon?
  • What kind of feedback do you receive from your employees?
  • What might your competition consider to be a weakness?
  • What has always been difficult for your company?
  • What are you unwilling to do or change?

Opportunities

Think about the opportunities available to you as potential future strengths. Your opportunities are the assets, resources, and events that could be beneficial to you in some way in the future. You may need to change some of your current approaches or adapt in other ways to capitalize on these opportunities, and that is not necessarily a bad thing.

Here are some questions you can ask yourself to identify your potential opportunities:

  • What is happening in the current market that you could capitalize upon?
  • What changes have you been making that have returned positive results?
  • What is working for other companies?
  • How could you introduce new technology to make your processes more efficient?
  • What costs can you cut?
  • Could you access new sectors or demographic groups?
  • How can you improve or modernize your marketing techniques?
  • How can you remove existing obstacles?

  Threats

Just as your opportunities are based on potential, so are your threats; these are the possible obstacles or issues that are not yet directly affecting your progress. But this doesn't mean that you shouldn't start thinking about them! Being aware of the challenges that you may encounter will help you either plan around them or confront them with solutions. Try to come up with several future events that may realistically hinder the momentum you build from engaging with your strengths and opportunities.

To get started, take a peek at our list of questions:

  • What obstacles might your weaknesses create?
  • Do changing market trends negatively affect your competitive edge?
  • What might stand in the way of the changes you make to accommodate your strengths and opportunities?
  • Do you have a lot of debt?
  • Could your competition exploit your weaknesses?

How did you do? Do you feel like you've listed everything? Or do you think you're missing something? Below, we've drafted examples of a business and a personal SWOT analysis to provide you with some perspective on what a completed one might look like.

An Example of a Personal SWOT Analysis

swot analysis on business plan

An Example of a Business SWOT Analysis  

swot analysis on business plan

Final Words

The humble but effective SWOT analysis will produce a detailed map of your current environment—its hills and valleys alike. Knowing how to write a SWOT analysis will provide you with the vantage point you need to choose a direction and blaze a trail toward your goals. SWOT analyses may not be crystal balls, but they are something like compasses. Use them wisely, and you will never be lost.

Image source: cookelma/unspla sh.com

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SWOT Analysis In Business (With Examples)

SWOT Analysis in business

  • Business Growth

Here is a simple strategic SWOT analysis that you can use as a highly effective method for creating an edge in the market and to insure long term success.

SWOT is an acronym for the Strengths and Weakness of a business and the Opportunities and Threats facing the business. It is used to understand Current and Future, Internal and External factors that may have an effect on a  business results and success.

The Strengths and weaknesses are focused inward to analyze what your company does well and where it could be better. Opportunities and Threats are focused externally towards the industry, which analyze any potential negative effect on the business.

How To Carry Out A SWOT Analysis In Business

To carry out a SWOT analysis for your business, summarize the strengths, weaknesses, opportunities and threats of your business relative to competitors. A SWOT analysis is a simple, yet highly effective method for conducting an analysis on a business, product or service. Before you try writing a business or marketing plan, it is highly recommended that you first complete a SWOT analysis.

A SWOT approach to planning requires owners to look very closely and analytically at every aspect of their operation, so that objectives can be evaluated as achievable, while also building up a clear picture of the strategies that need to be adopted under the constraints that have been recognized.

swot analysis on business plan

“If you know the enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle.” 

- Sun Tzu,  The Art Of War -

When completing a SWOT analysis, the aim is to reflect on all aspects of your business’s operations. You may wish to do this exercise alone or include your staff, spouse or business advisor. Whether you choose to do it alone or with others, make sure you allow a solid chunk of time to complete the analysis without being interrupted.

A SWOT analysis is a brainstorming exercise and to get the best results I suggest you allow yourself at least thirty minutes, or preferably an hour. This allows your mind to free itself of the multitude of thoughts and minor details of day to- day living. It takes time to get a flow of ideas going, so be patient and allow yourself time. Once you have allotted sufficient time to focus on this exercise it is time to get started.

SWOT Analysis Template: Excel Download

SWOT Analysis

SWOT Analysis

Download SWOT Analysis Excel Template

This link will open as an Excel spreadsheet and is ready, and

easy to use but you can follow these video instructions for more information. 

SWOT Analysis Template Video

The SWOT Analysis Goal 

After you have successfully completed the SWOT analysis, take some time to explore ways to consolidate your strengths, minimize your weaknesses, take advantages of the opportunities and be prepared for the threats.

Your priorities should be to:

  • Consolidate a strength
  • Use a strength to address an opportunity or threat
  • Use a strength to minimize a weakness or threat
  • Convert a weakness to strength
  • Convert a threat to an opportunity

SWOT Analysis Template: PDF Download

Download swot analysis pdf.

A SWOT analysis is a simple, yet highly effective method for conducting an analysis on a business, product or service. Before you try writing a business growth or marketing plan, it is highly recommended that you first complete a SWOT analysis.

SWOT

S WOT Analysis - STRENGTH  

The first step is to reflect on what you do really well. What is working for you at the moment? Can you consolidate on any of these strengths and make them an even bigger advantage for your business? Try asking yourself the following questions

What are your business’s strengths?

  • Attractive shopfront
  • Operating hours
  • Industry experience
  • Follow-up service
  • What do you do well?
  • What unique resources can you draw on?
  • What do others see as your strengths?
  • How are you superior to your competitors?
  • Why are your products or services so good?
  • What is it that makes your business unique?

Potential Internal Strengths Can Be:

  • Adequate financial resources.
  • Well thought of by buyers.
  • An acknowledged market leader.
  • Well-conceived functional area strategies.
  • Insulated from strong competitive pressure.
  • Proprietary technology.
  • Cost advantages.
  • Better advertising campaigns.
  • Product innovation skills.
  • Proven management.
  • Better manufacturing capability.
  • Superior technological skills.

 “Appear weak when you are strong, and strong when you are weak.” 

- Sun Tzu, The Art Of War -

S W OT Analysis - WEAKNESS Examples

Weaknesses need to be understood so you can compensate or improve them. This is not the time to start beating yourself up for being less than perfect. Everyone has weaknesses. Your first task is to identify anything you think you need to improve. These could include:

  • Time management
  • Marketing strategy
  • Certain products or services
  • Cleaning up your work environment
  • Follow-up procedures
  • What could you improve?
  • Where do you have fewer resources than others?
  • What are others likely to see as weaknesses?

Potential Internal Weaknesses Can Be:

  • No clear strategic direction.
  • Obsolete facilities.
  • Low profitability because …
  • Lack of managerial depth and talent.
  • Poor track record in implementing strategy.
  • Internal operating problems.
  • Too marrow a product line.
  • Weak market image.
  • Weak distribution network.
  • Below-average marketing skills.
  • Unable to finance needed changes.
  • Higher overall costs relative to key competitors.

Make a comprehensive list and start reviewing which ones you could start transferring into strengths. If you find it difficult to be objective, ask someone you trust for his or her feedback on your perceived weaknesses.

“So in war, the way is to avoid what is strong, and strike at what is weak.”

SW O T Analysis - OPPORTUNITY 

The third stage of the analysis process is to look at the opportunities that your business has available. Where could you start gaining an advantage over your competitors? The more you know about what your competitors are doing, the easier it will be for you to see opportunities to create something different and compelling. Another great way to discover possible opportunities is to ask your current customers. They will often have all the answers if you are brave enough to ask the question.

  • What external factors can you take advantage of?
  • Are there current resources that are underutilized?
  • How can you turn your strengths into opportunities?
  • What trends could you take advantage of?
  • What good opportunities are open to you?

Potential External Opportunities Can Be:

  • Serve additional customer groups.
  • Enter new markets or segments.
  • Expand product line to meet broader range of customer needs.
  • Diversify into related products.
  • Falling trade barriers in attractive foreign markets.
  • Complacency among rival firms.
  • Faster market growth.

There are always opportunities. Take the time to brainstorm a comprehensive list and don’t sensor your ideas. There will be time to eliminate the most impractical ideas later. For now, just get the ideas down on paper.

“In the midst of chaos, there is also opportunity” 

SWO T  Analysis - THREAT  

Finally, you need to assess any current or future threats to your business. All potential threats should be brainstormed. It is better to be aware of problems that might arise than to be hit with them out of the blue. This list could include things like changes in legislation, a multinational competitor opening a store or a lack of products due to importing issues. Whatever the possible threats, list them and assess whether they are real or unlikely. Are there any threats to your current market share? When all areas have been plotted and identified, you will be in a much better position to plan your future.

Take the time to complete this exercise thoroughly as the benefits are very real.

  • What threats do your weaknesses expose you to?
  • What is your competition doing?
  • What trends could harm you?

Potential External Threats Can Be:

  • Entry of lower-cost foreign competitors.
  • Rising sales of substitute products.
  • Slower market growth.
  • Adverse shifts in foreign exchange rates and trade policies of foreign governments.
  • Costly regulatory requirements.
  • Changing buyer needs.
  • Adverse demographic changes.

SW OT Analysis Examples  

  • Sample SWOT Ideas for a Local Restaurant
  • Example SWOT for a Small, Local Coffee Chop Chain

“Who wishes to fight must first count the cost” 

About the Author Hans

Hans had 40 of his own businesses over the last 30 years and is famous for creating fast-growing businesses” He is an author, speaker, coach, and consultant and a specialist in business optimization and turnaround, helping smaller business owners eliminate business limitations, threats, and growth challenges in achieving their sales, profit, cash flow, and income goals with sniper precision.

Popular posts

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Why You Need a SWOT Analysis for Your Business

Table of contents.

swot analysis on business plan

Understanding your company’s position within your market or industry and knowing how and where you can grow is critical for any business owner. This knowledge allows you to develop your company strategically rather than wasting your efforts trying to expand into a market that doesn’t align with your business or being steamrolled by a surprise competitor.

What is a SWOT analysis?

SWOT — which stands for “strengths, weaknesses, opportunities and threats” — is a type of analysis that helps you develop your business strategy by comparing internal factors (strengths and weaknesses) against external factors (opportunities and threats). Examples of internal factors include things that you have control over and can change, such as your staff or your intellectual property. External factors are things that you cannot control, such as consumer trends or competitors.

A traditional SWOT analysis takes your strengths, weaknesses, opportunities and threats and organizes them into a list that is presented in a 2 x 2 grid.

A SWOT analysis has four quadrants:

swot analysis on business plan

The analysis provides you with an accurate picture of what your business is currently doing well and how it can improve.

“[A SWOT analysis] gives you a firm grasp of what is affecting your business internally and externally,” said Lynne Pratt, creative content expert. “By carefully evaluating the analysis, a business can find new ways of progressing and achieving growth .”

Why should you do a SWOT analysis?

A SWOT analysis gives you a detailed, unbiased overview of your business as a whole or a specific product or campaign. It can also help train your brain to consider every factor that could affect your project or business. When you’re facing a tough issue or if you’re just unsure of your current strategy, a SWOT analysis illuminates details so you can formulate actionable plans based on each of the four quadrants.

For example, if you were considering opening a new location for your business, you could run a SWOT analysis to see if you are in a good position to do so. You could also use it to identify outside factors that you will need to plan for.

“A SWOT analysis is useful so that you don’t get caught entirely off-guard,” said David LaVine, founder of RocLogic Marketing. “You [should] do a SWOT analysis for each application area you’re considering operating in.”

“We conduct [analyses] every six months as a rule in our business,” said Alistair Dodds, marketing director and co-founder of Ever Increasing Circles. “They act as a great check on how the competition has evolved in that time period.” [Discover five effective ways to differentiate your product .] 

Who should conduct a SWOT analysis?

A SWOT analysis should be a collaborative effort between several levels of employment within your company. Founders and leaders should be the most closely involved, but to gain a true picture of your business, gather input from a group of people that can contribute several perspectives.

“It’s vital to go through your analysis with key stakeholders,” said Dodds. “When you identify weaknesses, it’s a great time to get other department heads and staff to suggest solutions — you’ll be amazed at the creativity and problem-solving inherent in your team if they are given the opportunity [for] input.” 

If you’re a solo operation, ask close friends or related professionals, such as your accountant, lawyer or advisor, for input. Having plenty of outside perspectives helps make your analysis as well-rounded and objective as possible. 

How to do a SWOT analysis

The first step of a SWOT analysis is to create your grid. Start with strengths in the upper left corner, then weaknesses in the upper right corner, opportunities in the bottom left and threats at the bottom right of the grid.

Next, fill in each quadrant. An easy way to do this is to ask yourself questions that apply to each box. Here are some suggestions.

  • What do you do well?
  • What unique skills or services do you have?
  • What experiences do you have that can help you achieve your goal?
  • What do you do better than your competitors?
  • Where are you most profitable? Why?
  • What aspects of your business could hinder your progress?
  • What skills or resources are you lacking?
  • What is costing you money?
  • Is there anything you feel like you’re failing at?

Opportunities

  • What can you improve?
  • What external conditions can help you achieve your business goals ?
  • Are there new audiences you could potentially reach?
  • Is there technology you could use to enhance your business?
  • Can you do more for your existing customers?
  • Where or how could you expand your business?
  • What external conditions could damage your progress or performance?
  • What do your competitors do well?
  • What are your competitors doing that you are not?
  • What is going on in your industry?
  • What is happening (or could happen) in the economy that could harm your business?
  • Are there new competitors in your market?
  • Is your target audience shrinking?

Here are some additional points to consider as you fill in your quadrants:

swot analysis on business plan

Your quadrants do not have to be perfect — you can always create multiple drafts of your analysis, editing what you have filled in as you go. Host a brainstorming meeting to complete your first draft.

After you have filled in the quadrants, review each quadrant and evaluate your results.

In preparation for these conversations, review some of the most important terms for business owners to enhance your ability to assess each area of the SWOT analysis and brainstorm solutions. 

A SWOT analysis helps you consider aspects of your business you may have overlooked. This multifaceted exercise drives you to expand your thinking, create more strategic plans and produce better results as you achieve your goals.

How to evaluate your results

To evaluate your SWOT analysis effectively, start with your strengths and don’t brush them off, said Pratt. “You might feel that because you’ve got these nailed down that you don’t need to do anything with them, but this is wrong,” she said. “There is always room for improvement and working on your strengths, as well as [with] the [other quadrants], will help them remain your strengths.”

Next, look at your weaknesses and identify which aspects of your business each weakness is related to. For example, is poor customer retention due to staff? Location? Competitors? “Identify where the problem is coming from so you can begin to plan to address it,” said Pratt.

Then, you can see which of your threats are related to your weaknesses and if any of them are caused by something you can change. Try to connect your strengths to ways you can combat threats.

Finally, consider whether there are time constraints that could impact your opportunities. Are any of them short-term or seasonal? If so, make it a priority to hit those opportunities first and create an action plan for taking advantage of them.

Nathan Thompson, e-commerce and growth lead at The Others Beauty Co., said his company splits their business opportunities into short-, mid- and long-term goals. They set deadlines for each goal to ensure it gets done. “SWOT results should be analyzed and evaluated in order of actionability,” he said. “Having deadlines set for each milestone ensures accountability for all parties.”

As you’re evaluating your results, remember that your SWOT analysis is only a starting point, not an actionable plan. “Don’t confuse SWOT for strategy,” said Greg Githens, executive and leadership coach at Catalyst and Cadre. You are still responsible for developing a strategy that will take you from where you are to where you want to be, and SWOT provides a roadmap for that strategy.

A sample of SWOT in action

To see how SWOT analysis works, consider this example:

Soft-Touch makes pads that attach by Velcro to the plastic face mask worn by sleep apnea sufferers to help them breathe while they sleep. The company founder herself has sleep apnea, and she developed the product to increase the comfort of wearing the mask and to eliminate the marks it left on her face the following morning.

The company has largely grown its sales through word-of-mouth. A major sleep apnea equipment maker wants Soft-Touch to supply the pads for all of its masks. To satisfy the increased demand, Soft-Touch would have to outsource its manufacturing.

Here is a sample SWOT analysis for Soft-Touch as they consider this opportunity: 

swot analysis on business plan

Notice that the SWOT analysis doesn’t provide an answer; rather, it provides a framework to help formulate an answer and allows you to see exactly what the opportunities are (an expanded market share and increased revenue), what weaknesses currently limit the company (lack of funding and marketing expertise, limited manufacturing capacity), its current strengths (unique proposition and trusted brand) and the threats it could face if it takes the opportunity (less control and need for financing).

“Taking time to think strategically will lead to ways you can streamline to get more done as well as take your business into new directions that can benefit (or even save) the company,” said Joshua Ladick, president of GSA Focus.

Additional reporting by Sean Peek.

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20+ SWOT Analysis Templates, Examples & Best Practices

By Midori Nediger , Oct 12, 2023

You know what you need if you’re contemplating producing a new product line, jumping into a new industry, or even just working on a company analysis for a school assignment?

A SWOT analysis chart.

SWOT analysis is a great way to effectively evaluate a person, campaign, strategy or product — and if you want to create a SWOT table that impresses (your stakeholders or your college professor), you need a SWOT analysis template.

Read on to see different types of SWOT analysis templates you can create with Venngage, plus top tips and plenty of SWOT analysis examples.

Click to skip ahead:

What is a SWOT analysis?

What does swot stand for explaining each element of swot.

  • Personal SWOT analysis examples

Company SWOT analysis templates

Marketing swot analysis templates.

  • Nonprofit SWOT analysis examples

Exec SWOT analysis templates

  • Consultant SWOT analysis examples

SWOT analysis templates for Word

Swot analysis templates for powerpoint, how to write a swot analysis, how to do a swot analysis, how to visualize a swot analysis.

  • FAQs about SWOT analysis templates

A SWOT analysis is a strategic planning technique used to assess the strengths, weaknesses, opportunities and threats of a business, project or any other specific situation.

It provides a comprehensive overview of the internal and external factors that can impact the current and future state of the entity, enabling informed decision-making and the formulation of effective strategies.

A SWOT analysis is a simple and practical evaluation model. A SWOT diagram looks at a combination of internal and external factors, as well as assessing strengths and weaknesses. This combination of evaluation metrics means a SWOT analysis is particularly useful for gaining a thorough overview of a business, product, brand or a new project early on in the project life cycle .

The SWOT diagram has been around since at least the 1960s. Although its origins are unclear, they are still used today in businesses across the world

For more information on what a SWOT analysis is and the importance of SWOT analyses, check out these posts:

  • What Is a SWOT Analysis and Its Importance to Businesses
  • Why Is a SWOT Analysis Important [+ Examples]
  • Why You Need a Sales SWOT Analysis [+Tips on Writing One]
  • What is a SWOT Analysis in Healthcare and Why You Need It

The simplest way to build a SWOT analysis is to use a free SWOT analysis template. In this post, we’ll share examples of SWOT analysis templates that you can customize for your business growth strategy.

SWOT is an acronym that stands for: Strengths — Weaknesses — Opportunities — Threats.

swot acronym

Let’s take a closer look at each of these elements:

Strengths are the areas you excel at. What do you do better than anybody else? What do people praise you for?

To identify your Strengths, spend some time thinking about what you’ve done well, what tasks were well within your comfort zone, and any times that you’ve exceeded expectations, or achieved fantastic results.

A SWOT matrix could be conducted during recruitment to help identify the strengths of candidates, and directly compare them effectively. Or use a SWOT analysis template to understand how internal and external factors impact your brand.

This SWOT analysis template, for example, examines the strengths of a training program offered to employees of a call center :

SWOT analysis template

Pro tip : With a paid Venngage subscription , you can download this SWOT template as a PNG and add it to your Word document or PowerPoint presentation. You can also download it as a PPTX file and add it directly to your presentation as a slide.

Next you identify the areas that need improvement. Think about things you find difficult to achieve, times you’ve struggled to meet expectations, and areas that you don’t feel confident in. Look back at your Strengths list and think about the inverse when filling out your SWOT template.

Weaknesses should always be things you have control over, and things that you can put steps in place to improve upon. You could use a SWOT to help analyze your brand, and understand why your customers chose your competitors over you, or if there are any services you are not currently providing. Use this SWOT analysis example for inspiration.

swot analysis template flower

Opportunities

Moving onto the “O” in our SWOT – Opportunities are areas that your business could take advantage of. When conducting a SWOT for internal company analysis, is there an unserved or underserved market that you could grow into? Are you maximizing your media coverage? Could you change or develop a product to better serve a wider audience? What external factors work to your benefit in filling market gaps?

SWOT analysis example

If you look at SWOT Opportunities examples, you will find the importance of also looking back at your Strengths and Weaknesses lists. You should include any weaknesses that could be turned into a strength as an opportunity in your SWOT analysis template.

Finally, threats are potential or upcoming obstacles that you should be wary of. In this case, by threat, we mean emerging competitors, changes in the market, things that would negatively affect your business. Most commonly, you will not have any control over your threats but it’s still important to be aware of them so that you can develop contingency plans. Remember to keep this section of the SWOT matrix objective so you don’t miss out on opportunities.

Gradient Column SWOT Analysis Template

SWOT analysis templates (with examples )

You can actually edit any of our SWOT analysis templates above and add them to your Word document as an image file. We offer PNG or PNG HD download options.

Here’s another example of a SWOT analysis template you can create for your Word or Google Docs file:

swot analysis template for word

Note: download capability is only available in a paid Venngage plan .

Similar to Word, you can edit any of our SWOT analysis examples above and download them as a PNG to add to your PowerPoint or Google Slides presentation. A Venngage Business user can also download the template as a PPTX file and upload it directly to your presentation as a slide.

Besides simple SWOT analysis templates, we also offer presentation templates containing SWOT charts:

business proposal swot analysis

Personal SWOT analysis templates

In some circumstances, you might want to conduct a personal SWOT analysis to help evaluate your personal growth. If, for example, you were looking to move up the career ladder in your existing profession, or to change careers completely. If creating a personal SWOT analysis, you should slightly reposition your thinking regarding “threats”.

Comparing strengths and weaknesses directly can help give you clarity over areas that you can improve, like in this personal SWOT analysis example.

Personal swot analysis template

Rather than thinking about competitors or change in the market, think more about things that may hold you back personally – i.e. a lack of business finances , or an upcoming relocation, as you can see in this SWOT analysis example.

business employee swot analysis template

SWOT analysis helps companies identify their strengths to capitalize on, weaknesses to address, opportunities to pursue and threats to mitigate.

It aids in understanding the competitive landscape, customer preferences and market trends, allowing companies to make informed decisions about product development, marketing strategies and market expansion.

When composing a SWOT analysis for a company, begin by objectively evaluating the organization’s internal strengths, including areas where it outperforms competitors, possesses unique resources or excels in customer satisfaction.

swot analysis on business plan

Simultaneously, honestly identify internal weaknesses such as inadequate resources, operational inefficiencies or gaps in skills.

To thoroughly assess the external environment, remain attentive to emerging market trends and potential growth areas as opportunities, while also considering potential threats such as evolving consumer preferences, regulatory changes or intensified market competition.

swot analysis on business plan

It is crucial to maintain objectivity, involve key stakeholders and consider the analysis in the context of both short-term and long-term business objectives. That way, you can ensure the strategic insights gleaned from the SWOT analysis are effectively translated into actionable plans and initiatives.

When developing a marketing plan you should use a business planning SWOT template for your product or service. By looking at what you do better than your competitors you can start to understand the best way to market your product. This free SWOT analysis template for Word showcases the opportunities for the business.

Visual Column SWOT Analysis Template

Equally, by looking at opportunities you can begin to understand potential new markets, as well as under-served areas that you already market within. Marketers, consultants and freelancers often include SWOT analyses in competitor analysis reports .

Looking for more marketing resources?

  • How to conduct a SWOT analysis in marketing (+examples)
  • The complete guide to marketing infographics
  • How to use SEO in your visual marketing
  • How to make a marketing plan

Nonprofit SWOT analysis templates

Nonprofit organizations can use SWOT analyses to help inform their strategic planning.

A SWOT is a great way to understand how your nonprofit fits into the market, and how you can maximize your impact by running effective targeted campaigns and fundraising initiatives. This SWOT analysis example showcases areas where a nonprofit can improve.

Beige SWOT Analysis Template

Especially in nonprofits, you often don’t have the luxury of testing out multiple ideas or strategies due to time and budget constraints. Conducting a SWOT analysis early on in your strategy development can help you make the most informed decisions. This SWOT analysis example highlights the threats that a nonprofit should be looking to overcome soon.

swot analysis on business plan

Looking for more nonprofit guides?

  • The complete nonprofit marketing guide
  • Nonprofit communication resources
  • Nonprofit storytelling examples

Execs have to wear many different hats within their roles and organizations. Business development is a crucial part of company success, and being fully aware of your organizational strengths and weaknesses is invaluable. For example, there are numerous opportunities in this SWOT analysis example.

When going through a period of rapid growth within your business, you should take some time to conduct a SWOT analysis. This will help to ensure that you are able to reach your growth goals. Doing a SWOT also helps you identify any possible weaknesses that may become issues for your growth further down the line.

The weaknesses in this free SWOT analysis template for Word should be addressed quickly before they become a threat to the company.

Company SWOT Analysis

A SWOT diagram can also be used to help evaluate employees’ work. You can assess your employees’ performances and provide detailed feedback, like in this SWOT analysis example.

Bold swot analysis template

Interested in more resources?

  • Business letterhead templates
  • Mind map templates
  • Business pitch deck templates
  • How to write a project plan

Consultant SWOT analysis templates

Consultants are in a unique position because they are looking to market themselves. Starting out as a consultant can be difficult, but conducting a SWOT analysis of yourself as a consultant can help you discover any unique selling points for your services.

You might also want to conduct a SWOT analysis when delivering work for clients. A SWOT can help inform any project or growth plans that you are recommending. The SWOT analysis example below makes a strong case for the business.

Orange Brewery SWOT Analysis Template

Take a look at page 4 of this consulting proposal template for an example of how to use SWOT analyses in a consulting proposal :

swot chart in a consulting proposal template

Looking for more consulting templates?

  • Consulting proposal templates
  • Business proposal templates
  • Job proposal templates

To create a SWOT analysis, start by identifying your business’s strengths and weaknesses, followed by opportunities and threats in the market. Organize these factors into a concise table format, ensuring that each element is clear and specific. This analysis will provide a comprehensive overview of your business’s internal and external environment, aiding in strategic planning and decision-making.

The first two letters of our SWOT, Strengths and Weaknesses, are internal factors that you have control over, and you should look within your company or business to complete these sections. Opportunities and Threats are external factors that you do not have control over, and you should look outside of your organization to complete them, like in the simple SWOT analysis example below:

swot analysis example

When developing any marketing campaign you can use a SWOT analysis, like the one above, to outline any potential threats as well as opportunities for your business. You can include a SWOT diagram as part of your  marketing plan  or business plan, like in this SWOT analysis template.

B2C Consulting SWOT Analysis Template

A version of this SWOT analysis template is used in this business proposal (page 4).

consulting proposal template with swot analysis

You can see how the designer has adapted the brand colors of this business into the SWOT analysis, which you can easily do by using My Brand Kit :

Tips for creating a SWOT analysis

When doing a SWOT analysis, it can be difficult to find jumping-off points for your evaluation. Often, you either go too big and list “impossible to fix” problems, or think small and spend your time and energy focusing on things that are overall insignificant.

You also need to consider internal factors like team size that may be changing. Deciding on your SWOT analysis questions can take as much time as conducting the SWOT analysis itself!

That’s why it’s important to decide on an overall goal or objective that you want your SWOT template to help you achieve. This could be more sales, bigger growth, better brand recognition, a prestigious award, or more.

If you’re creating a personal SWOT analysis template, you can pick a goal you’re working towards such as a promotion, or an award, and identify your strengths, weaknesses, opportunities, and threats in relation to that goal. In personal SWOT analysis examples like this, you can give yourself a time period, such as the last year, to review.

Vibrant B2C Consulting Presentation Template

Once you have decided on a goal, you can start to think about SWOT analysis questions that are related to:

  • Your customers
  • Your competitors
  • Your market share
  • Business growth
  • Availability
  • Price point
  • Online following
  • Customer retention
  • Budget restrictions
  • Company culture

This is by no means a complete list of topics to evaluate, and you should add your own ideas, but it’s a good starting point for effective evaluation. Here’s a simple SWOT analysis template that shows you the result of asking the right questions.

Blue Fitness SWOT Analysis Template

A SWOT analysis helps you understand your business’s current position in the market and aids in developing strategies to leverage strengths, mitigate weaknesses, capitalize on opportunities and counter threats.

Follow these simple steps to create a comprehensive SWOT analysis:

  • Identify strengths: Recognize internal positive attributes that are within your control, such as unique selling points, skilled workforce or strong brand recognition.
  • Pinpoint weaknesses: Assess internal areas that need improvement, such as lack of resources, inefficient processes or poor brand reputation.
  • Recognize opportunities: Analyze external factors that could benefit your business, such as emerging markets, technological advancements or changes in consumer behavior.
  • Acknowledge threats: Consider external factors that could potentially harm your business, such as new competitors, changing regulations or economic downturns.

There are many different ways you can visualize a SWOT analysis. Below we’ve outlined the main layouts you might want to use for your SWOT, and provided SWOT analysis examples for each.

Use a 2×2 grid system design

You could use a 2×2 grid system to evaluate your options . This is a good way to compare all data at once, as each box has a direct relationship with every other box. This makes it easier to think about a SWOT as a whole, in context – rather than as individual segments, like in this SWOT analysis example we shared earlier:

swot analysis template graphic design

A 2×2 grid is easily stylized and a flexible design style, and you can use brand colors, shapes, or motifs. 2×2 grids are also useful in business reports that contain a lot of information, as they make it easy to digest all elements of the SWOT quickly.

Use a vertical list

You can also use a vertical list. Vertical list SWOT analysis templates work well for Word, within reports, on the internet, or if sending via email. If you’re doing this, make sure you make a visual distinction between each segment by using a box or leaving plenty of space.

This SWOT analysis example uses a vertical list with different colored boxes in its design:

swot analysis template numbered list

Use a horizontal table

A SWOT template for Word needs to be vertical, but that type of SWOT diagram is less useful for PowerPoint, due to the orientation of presentation slides usually being in landscape.

In this case, you should use a horizontal table for your SWOT analysis template. This is good for presentations as it allows you to fill the entire screen with information. Again, just make sure to suitably differentiate the segments with color, graphics, or empty space between the columns, like in this free SWOT analysis template for PowerPoint:

Light Competitor Analysis Presentation Template

SWOT analysis best practices & design tips

Whilst a SWOT diagram is a fairly straightforward evaluation model, there are a couple of SWOT best practice tips you should follow in order to maximize the effectiveness of your SWOT:

Use measurable and quantifiable statements in your SWOT

You should be able to evidence all of the points in your SWOT template, aka prove that you are good at the thing you said you are good at. Saying you increase your market share regularly is good, but saying you increase your market share 10% year over year is even better.

Make sure all areas of your business are represented when developing the SWOT

Get feedback from different departments on both what their strengths/weaknesses are, but ask what they think your strengths/weaknesses are. This SWOT analysis example has gathered feedback from multiple teams.

B2C Client Consulting Presentation Template

Try and keep the lists an even number

If you have 5 strengths, find 5 weaknesses. For every opportunity, try and write down a threat. This makes it easier to compare the categories in your SWOT template.

Have a goal in mind when doing your SWOT analysis

Whether this is developing a new project plan or business, or scaling your revenue – a SWOT diagram is particularly useful when there’s a definitive outcome you’re trying to achieve.

Don’t aim for the perfect SWOT list straight away

When you’re customizing your SWOT analysis template, start with much longer lists gathered in a brainstorming session and whittle the lists down. This brings us to…

Make sure your SWOT is thorough

Make sure you’ve thought about every possible strength, weakness, threat, and opportunity. A SWOT is only as valuable as the information you include, so make sure you do your due diligence during the analysis. Take inspiration from this SWOT analysis example.

Business Growth Client Consulting Proposal Template

Format your SWOT in a way that makes sense for multiple uses

If you plan to present your SWOT analysis to an executive at your company, make sure it is clear to understand, and presented in a way that makes it easy to take in all of the information at once – such as a 2×2 grid template. If it’s for a company presentation, use a horizontal SWOT analysis template for PowerPoint.

Business Strategy Mindmap Template

Think short, mid, and long term

Your product might be great now, but what could be happening in the next 6 months that might affect that? What about within the next year? Sure that competitor could be small fish now, but what about if they have an aggressive growth plan in place? You need to be prepared for that to stay ahead of the game, and that’s where a SWOT analysis template comes in.

Use clever design tricks

Use color in your SWOT matrix to help grab attention. Differentiate different areas of your SWOT, as this SWOT analysis template does.

Vibrant B2C Consulting Proposal Template

FAQ about SWOT analysis templates

1. why is a swot analysis important.

It’s important to remember that your business doesn’t exist in a vacuum and that you should analyze both internal and external factors. A SWOT diagram will allow you to gain a good, thorough understanding of where your business sits within the wider market, as well as identify potential opportunities to explore.

The benefit of a SWOT analysis is that you can directly compare every individual letter to its three counterparts. You can explore the relationship between your strengths and your weaknesses, but also look at how your strengths could be used to help leverage opportunities, and assess the potential your strengths have to help improve your weaknesses.

2. What comes after a SWOT analysis?

Once your SWOT template is complete you can use the information you have gathered to inform your business’ strategic planning.

Spend some time thinking about:

  • How you can continue to develop your strengths?
  • How you can improve your weaknesses, what procedures can be put in place or training can you undertake to help with this?
  • Also, think about how you can leverage your strengths to take advantage of the opportunities you’ve listed.
  • Can your strengths be used to tackle any threats?
  • What about your weaknesses, will they hold you back from pursuing the opportunities?
  • Will your weaknesses further disadvantage you when it comes to your threat list?

Simple B2C Consulting Proposal Template

Are you ready to create your SWOT analysis?

A SWOT analysis is an invaluable tool for evaluation and is particularly useful for small businesses or businesses in times of change. Make sure you follow these SWOT analysis best practice tips to maximize your evaluation opportunities and further your evaluation by conducting a thorough Competitor Analysis .

All of the SWOT analysis examples featured in this blog post are fully customizable SWOT analysis templates available for use on Venngage.  You can also use our Smart Templates to create documents easily.

Once you’ve created your business or personal SWOT analysis, make sure to keep a copy safe for the next time you conduct an evaluation. With Venngage you can keep your work online or download a SWOT analysis PDF if you’re a Business user.

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PESTLE Analysis

SWOT and Business Analysis Tools

How to Use SWOT in Business Plans

Jun 16, 2016 by Thomas Bush

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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SWOT analysis, business plan, strategic planning, strengths, weaknesses, opportunities, threats, competitive analysis, market analysis, business strategy, Ebizfiling

  • Posted On April 18, 2023
  • Posted By By Team Ebizfiling
  • Company law
  • Entrepreneurship
  • Business Advisory Services
  • Business Plan
  • SWOT Analysis

Why to do a SWOT analysis for a business plan

Table of Content

Introduction

As you develop your business plan, there are a myriad of considerations that need to be taken into account. One of the most important factors is conducting a SWOT analysis. SWOT analysis is a strategic planning that helps businesses identify their strengths, weaknesses, opportunities, and threats. By conducting a SWOT analysis, businesses can develop strategies to address their weaknesses, capitalize on their strengths, and take advantage of new opportunities.

What is a SWOT analysis?

A SWOT analysis is a strategic planning  used to evaluate the Strengths, Weaknesses, Opportunities, and Threats of a business, project, or individual. The analysis involves identifying the internal and external factors that can affect the success or failure of a venture. Here’s a breakdown of what each element of the SWOT analysis represents:

  • Strengths: These are the positive attributes or qualities of the subject being analyzed. They can include things like a strong brand reputation, skilled staff, unique products or services, or efficient processes.
  • Weaknesses: These are the negative aspects of the subject being analyzed. They can include things like poor cash flow, low employee morale, outdated technology, or a lack of resources.
  • Opportunities: These are external factors that can be leveraged to the advantage of the subject being analyzed. They can include things like emerging markets, new technologies, changing consumer trends, or favorable government policies.
  • Threats: These are external factors that can negatively impact the subject being analyzed. They can include things like increasing competition, economic downturns, regulatory changes, or natural disasters.

Benefits of SWOT analysis?

In this guide, we will outline the key benefits of conducting a SWOT analysis and provide tips on how to conduct a SWOT analysis for your business plan.

  • Identifying Strengths and Weaknesses: The first benefit of conducting a SWOT analysis is that it helps businesses identify their strengths and weaknesses. Strengths are internal factors that give a business an advantage over its competitors, while weaknesses are internal factors that put a business at a disadvantage. To identify your strengths and weaknesses, it is important to conduct an honest and thorough analysis of your business.

Assessing Opportunities and Threats: A SWOT analysis also helps businesses assess opportunities and threats. Opportunities are external factors that could benefit a business, while threats are external factors that could harm a business. To assess opportunities and threats, it is important to conduct a competitive analysis and a market analysis. This may include analyzing your competitors’ strengths and weaknesses, identifying new market trends, and assessing changes in the regulatory environment. By identifying opportunities and threats, you can develop strategies to take advantage of new opportunities and mitigate potential threats.

Developing Business Strategies: One of the most important benefits of conducting a SWOT analysis is that it helps businesses develop Strategic business planning. By identifying strengths, weaknesses, opportunities, and threats, businesses can develop strategies that capitalize on their strengths, address their weaknesses, take advantage of new opportunities, and mitigate potential threats.

Prioritizing Business Priorities: Another benefit of conducting a SWOT analysis is that it helps businesses prioritize their business priorities. By identifying the most important strengths, weaknesses, opportunities, and threats, businesses can focus their resources on the most important areas of their business. If your SWOT analysis identifies a major new market opportunity, you may prioritize your product development efforts to take advantage of this opportunity.

Facilitating Communication and Collaboration: Finally, conducting a SWOT analysis can facilitate communication and collaboration within your organization. By involving key stakeholders in the SWOT analysis process, you can ensure that everyone is on the same page and working towards the same goals. This may include involving your employees, customers, suppliers, and other stakeholders in the SWOT analysis process. By involving everyone in the process, you can ensure that everyone has a clear understanding of the business’s strengths, weaknesses, opportunities, and threats, and can work together to develop effective strategies to address them.

How to Conduct a SWOT Analysis?

Now that you understand the benefits of conducting a SWOT analysis, let’s take a look at how to conduct a SWOT analysis for your business plan.

Step 1: Identify Your Business’s Internal Factors:  The first step in conducting a SWOT analysis is to identify your business’s internal factors. These are the factors that are within your control and can have an impact on your business’s performance. This may include your products or services, your brand reputation, your financial position, your employees, and your marketing strategy. To identify your business’s internal factors, ask yourself the following questions:

What are our core strengths as a business?

What are our biggest weaknesses?

What are our key financial metrics?

How effective is our marketing strategy?

How satisfied are our customers?

Step 2: Identify Your Business’s External Factors:  The second step in conducting a SWOT for market analysis is to identify your business’s external factors. These are the factors that are outside of your control and can have an impact on your business’s performance. This may include your competitors, changes in the regulatory environment, changes in technology, and changes in market trends. To identify your business’s external factors, ask yourself the following questions:

Who are our main competitors?

What are our key market trends?

What are the regulatory challenges we face?

How is technology impacting our industry?

What are the biggest threats to our business?

Step 3: Analyze Your Business’s Strengths, Weaknesses, Opportunities, and Threats:  The third step in conducting a SWOT analysis is to analyze your business’s strengths, weaknesses, opportunities, and threats. This involves looking at your internal and external factors and identifying the most important factors that are impacting your business.

To analyze your business’s strengths, weaknesses, opportunities, and threats, use a SWOT matrix. This is a four-quadrant table that allows you to organize your findings and identify key areas for improvement.

In the SWOT matrix, list your strengths in the top-left quadrant, your weaknesses in the top-right quadrant, your opportunities in the bottom-left quadrant, and your threats in the bottom-right quadrant. Then, use this information to develop strategies to capitalize on your strengths, address your weaknesses, take advantage of new opportunities, and mitigate potential threats.

Step 4: Develop Strategies Based on Your SWOT Analysis:  The final step in conducting a SWOT for market analysis is to develop strategies based on your findings. This involves identifying the most important areas for improvement and developing strategies to address them.

To develop effective strategies, consider the following questions:

How can we build on our strengths to grow our business?

How can we address our weaknesses to improve our performance?

How can we take advantage of new opportunities to expand our business?

How can we mitigate potential threats to protect our business?

By answering these questions, you can develop effective strategies that address your business’s most pressing needs.

In conclusion, conducting a SWOT analysis is an essential step in developing a strategic business planning for market analysis. By identifying your business’s strengths, weaknesses, opportunities, and threats, you can develop strategies to build on your strengths, address your weaknesses, take advantage of new opportunities, and mitigate potential threats.

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The Strategy Story

Wells Fargo SWOT Analysis

swot analysis on business plan

Before we dive deep into the SWOT analysis, let’s get the business overview of Wells Fargo. Wells Fargo & Company is a multinational financial services company with significant global operations, serving over 70 million customers across 35 countries.

As one of the “Big Four Banks” in the United States, alongside JPMorgan Chase, Bank of America, and Citigroup, Wells Fargo holds a prominent position in the financial industry. The company is headquartered in San Francisco, California. It operates through its primary subsidiary, Wells Fargo Bank, N.A., a national bank with its main office in Sioux Falls, South Dakota.

The company’s vast array of services includes banking, investment, mortgage, and consumer and commercial finance products, distributed through various segments such as Consumer Banking and Lending, Commercial Banking, Corporate and Investment Banking, and Wealth and Investment Management.

Wells Fargo is recognized for its extensive network, comprising 8,050 branches and 13,000 automated teller machines, and 2,000 standalone mortgage branches. It is notable for being the second-largest retail mortgage originator in the U.S., originating one out of every four home loans and managing a $1.8 trillion home mortgage servicing portfolio.

Internationally, Wells Fargo maintains offices in major cities such as London, Dublin, Paris, Dubai, Singapore, Tokyo, Shanghai, Beijing, and Toronto, with significant back-office operations in India and the Philippines employing over 20,000 staff. The company’s history dates back to 1852, when it was founded by Henry Wells and William G. Fargo to provide express and banking services to California during the Gold Rush era. Wells Fargo’s current form resulted from a merger with Minneapolis-based Norwest Corporation in 1998, which expanded its reach to become a coast-to-coast bank, further solidified by the acquisition of Wachovia in 2008.

Financial Performance 2023 : Wells Fargo generated a revenue of $82.6 billion and a net income of $19.1 billion.

Here is the SWOT analysis for Wells Fargo

A SWOT analysis is a strategic planning tool used to evaluate the Strengths, Weaknesses, Opportunities, and Threats of a business, project, or individual. It involves identifying the internal and external factors that can affect a venture’s success or failure and analyzing them to develop a strategic plan. In this article, we do a SWOT Analysis of Wells Fargo.

SWOT Analysis: Meaning, Importance, and Examples

  • Global Operations : Wells Fargo has significantly expanded its reach beyond the United States, operating in over 35 countries and serving more than 75 million customers globally, which enhances its strength as an international bank​​.
  • Inclusion Among the Big Four : Wells Fargo is one of the “Big Four” banks in the United States, holding a substantial portion of the country’s deposits and significantly influencing policymaking. This positioning gives Wells Fargo a competitive edge and a strong influence in the financial industry​​​​.
  • Leadership in the Middle Market Segment : Wells Fargo has established itself as the leading bank for middle market companies in the U.S., enjoying the financial benefits of serving this vital segment of the economy​​.
  • Brand Value : The bank is recognized for its precious global banking brand, ranking 8th in the Brand Finance 2022 report with a brand value of  $30.1 billion . This reflects the bank’s strong reputation and the trust it has built over the years​​.
  • Diverse Services : Wells Fargo offers services tailored to different market segments, including consumer banking and lending, commercial banking, corporate and investment banking, and wealth and investment management. This diversity allows Wells Fargo to cater to a broad customer base and generate multiple revenue streams​​.
  • Strong Financial Performance : The bank has consistently shown robust financial performance, which enables it to invest in technology, infrastructure, and customer service, maintaining its competitive position​​.
  • Commitment to Sustainability and Social Responsibility : Wells Fargo has been recognized for its environment-friendly policies, providing over $10 billion to environmentally beneficial businesses and actively participating in efforts to mitigate carbon emissions​​.
  • Reputational Challenges : Wells Fargo has faced significant reputational damage due to various scandals, including creating millions of unauthorized accounts by employees to meet sales targets. This has eroded customer trust and attracted negative publicity and regulatory scrutiny​​​​.
  • Technological Limitations : The bank has struggled to update its antiquated banking systems, leading to increased operational breakdowns and customer inconvenience. This has made it difficult for Wells Fargo to satisfy regulatory requirements and remain competitive in a rapidly evolving digital banking landscape​​​​.
  • High Operational Costs : Wells Fargo has incurred high operational costs due to fines from lawsuits and the maintenance of outdated machinery. These costs have undermined profitability and challenged the bank’s long-term sustainability​​​​.
  • Limited International Presence : Compared to some of its competitors, Wells Fargo has a relatively limited international presence, which could restrict its growth opportunities and increase its exposure to domestic market fluctuations​​.
  • Overreliance on Traditional Banking : The bank’s heavy reliance on traditional banking services, such as lending and deposits, may hinder its ability to quickly adapt to changing customer preferences and the rise of fintech innovations​​.
  • Regulatory Limitations : Following the scandal involving unauthorized accounts, the Federal Reserve imposed a cap on the bank’s asset growth, limiting its ability to issue new loans and expand its business operations​​.

Opportunities

  • Digital Transformation : The rise of digital banking presents an opportunity for Wells Fargo to upgrade its technological capabilities and introduce innovative digital products and services. By investing in digital transformation, the bank can improve the customer experience, increase operational efficiency, and maintain competitiveness in the evolving financial landscape​​.
  • Expansion into New Markets : Wells Fargo can explore opportunities for expansion into new geographic markets, both domestically and internationally. Diversifying its presence can help the bank tap into new customer segments and reduce its dependence on the U.S. market​​.
  • Investment Banking Expansion : Wells Fargo plans to grow its corporate and investment banking business, seeing a $1 billion opportunity to offer more investment banking, advisory, and underwriting services to its existing customer base. This expansion into Wall Street activities represents a significant opportunity for growth​​.
  • Strengthening Commercial & Industrial Lending : Despite being a leader in SME lending, Wells Fargo has the potential to regain its leadership in commercial and industrial (C&I) lending. Strengthening its position in this segment can open up new revenue streams and enhance its market share​​.
  • Digital Infrastructure Strategy : The bank’s partnership with major cloud providers like Microsoft Azure and Google Cloud to adopt multi-cloud technologies can accelerate its digital transformation. This shift can lead to improved product offerings, enhanced customer experience, and increased employee collaboration​​.
  • Diversification of Portfolio : The volatile nature of the banking sector makes diversification a prudent strategy. Wells Fargo can diversify its portfolio by venturing into more stable and growing industries to balance out the risks associated with the banking sector​​.
  • Focusing on Smaller Towns : After establishing a strong presence in major cities worldwide, Wells Fargo has an opportunity to expand its services to smaller towns, potentially tapping into untapped markets and customer bases​​.
  • Expanding Operations in Emerging Economies : With most of its assets in the U.S., Wells Fargo can expand its operations in emerging economies such as Africa and Asia, exploiting growth opportunities in these regions​​.
  • Intense Competition : The banking sector is highly competitive, with numerous traditional banks, financial institutions, and emerging fintech companies offering similar products and services. This fierce competition can erode Wells Fargo’s market share, exert pressure on pricing, and challenge its growth​​​​.
  • Regulatory Environment : The financial industry is subject to stringent regulations and oversight, which can change and become more complex. Wells Fargo operates in a complex regulatory environment, and any changes in laws or compliance requirements can significantly impact the company’s operations, profitability, and ability to grow​​.
  • Economic Downturns : Wells Fargo’s performance is closely tied to the economy’s overall health. Economic downturns can lead to increased loan defaults, reduced demand for financial services, and decreased profitability. Economic uncertainties and market volatility threaten the company’s financial stability​​.
  • Global Recession : A severe global recession, evidenced by job losses and economic downturns in many countries, can adversely affect Wells Fargo. Customers defaulting on loans and mortgages during such times can lead to significant financial losses for the bank​​.
  • Public Perception and Trust : Regaining public trust after scandals is challenging. Negative public perception, mainly if fueled by ongoing investigations or new allegations, can lead to customer attrition and impact Wells Fargo’s ability to attract new business​​.
  • Pandemic-Related Impacts : The stability and success of the banking sector rely heavily on the broader economy. Wells Fargo’s profits were significantly affected by the pandemic, which led to job losses and the collapse of small businesses, resulting in the accumulation of unpaid loans​​.
  • Loan Caps Imposed by Regulators : Following the fake account scandal, the Federal Reserve imposed a cap on Wells Fargo’s asset growth, limiting its ability to issue new loans and expand its business operations. This restriction is a significant threat to the bank’s growth prospects​​.
  • Technological Disruptions : The rapid pace of technological innovation in the financial sector, particularly by fintech companies, threatens traditional banks like Wells Fargo. Staying competitive requires continuous investment in technology, which can be challenging given the bank’s other priorities and constraints.

Check out the SWOT Analysis of Global Businesses

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Money Talks News

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Plan Your Job and Career With a SWOT Analysis

Posted: January 3, 2024 | Last updated: January 3, 2024

<p><em>Editor's Note: This story originally appeared on <a href="https://www.flexjobs.com/blog/post/using-swot-analysis-to-plan-your-job-and-career/">FlexJobs.com</a>.</em></p> <p>Are you looking to gain insight into your next career move? Whether you’ve already launched your job search or you’re simply analyzing your career map, are you seeking a direction that’s intentional and not based on circumstance? If so, consider using a SWOT analysis to strategize your job search and your career as a whole.</p> <p>Businesses frequently use SWOT analyses to strategize and plan based on an overview of their current strengths, weaknesses, opportunities, and threats (SWOT). Even though the SWOT analysis was created for project management and large strategizing, it can be just as effective for career planning. <span>A SWOT analysis involves two areas: The first involves factors you can control — internal strengths and weaknesses; the second involves analyzing factors outside of your control — external opportunities and threats.</span></p>  <div class="FAQ-section"> <p>When you work through a SWOT analysis, you’ll better understand how you can impact external factors in your career by highlighting or developing your skills.</p> <p>Join 1.2 million Americans saving an average of $991.20 with Money Talks News. <a href="https://www.moneytalksnews.com/?utm_source=msn&utm_medium=feed&utm_campaign=one-liner#newsletter">Sign up for our FREE newsletter today.</a></p> <h3>Try a newsletter custom-made for you!</h3> <p>We’ve been in the business of offering money news and advice to millions of Americans for 32 years. Every day, in the <a href="https://www.moneytalksnews.com/?utm_source=msn&utm_medium=feed&utm_campaign=blurb#newsletter" rel="noopener">Money Talks Newsletter</a> we provide tips and advice to save more, invest like a pro and lead a richer, fuller life.</p> <p>And it doesn’t cost a dime.</p> <p>Our readers report saving an average of $941 with our simple, direct advice, as well as finding new ways to stay healthy and enjoy life.</p> <p><a href="https://www.moneytalksnews.com/?utm_source=msn&utm_medium=feed&utm_campaign=blurb#newsletter" rel="noopener">Click here to sign up.</a> It only takes two seconds. And if you don’t like it, it only takes two seconds to unsubscribe. Don’t worry about spam: We never share your email address.</p> <p>Try it. You’ll be glad you did!</p> <p class="disclosure"><em>Advertising Disclosure: When you buy something by clicking links on our site, we may earn a small commission, but it never affects the products or services we recommend.</em></p> </div>

Editor's Note: This story originally appeared on FlexJobs.com .

Are you looking to gain insight into your next career move? Whether you’ve already launched your job search or you’re simply analyzing your career map, are you seeking a direction that’s intentional and not based on circumstance? If so, consider using a SWOT analysis to strategize your job search and your career as a whole.

Businesses frequently use SWOT analyses to strategize and plan based on an overview of their current strengths, weaknesses, opportunities, and threats (SWOT). Even though the SWOT analysis was created for project management and large strategizing, it can be just as effective for career planning. A SWOT analysis involves two areas: The first involves factors you can control — internal strengths and weaknesses; the second involves analyzing factors outside of your control — external opportunities and threats.

When you work through a SWOT analysis, you’ll better understand how you can impact external factors in your career by highlighting or developing your skills.

Join 1.2 million Americans saving an average of $991.20 with Money Talks News. Sign up for our FREE newsletter today.

Try a newsletter custom-made for you!

We’ve been in the business of offering money news and advice to millions of Americans for 32 years. Every day, in the Money Talks Newsletter we provide tips and advice to save more, invest like a pro and lead a richer, fuller life.

And it doesn’t cost a dime.

Our readers report saving an average of $941 with our simple, direct advice, as well as finding new ways to stay healthy and enjoy life.

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<p>Break your brainstorming and analysis into four distinct sections: strengths, weaknesses, opportunities, and threats.</p> <p>Although a traditional SWOT analysis comprises a large square broken into four separate segments, you can also create four lists. The key is to create them independently but in a way that allows you to analyze correlations between them.</p>

How Does a SWOT Analysis Work? (Template)

Break your brainstorming and analysis into four distinct sections: strengths, weaknesses, opportunities, and threats.

Although a traditional SWOT analysis comprises a large square broken into four separate segments, you can also create four lists. The key is to create them independently but in a way that allows you to analyze correlations between them.

<p>For millions of people, a college degree is a ticket that helps them cash in on the American dream. Choosing the right school makes success even more likely, according to a recent analysis by the Georgetown University Center on Education and the Workforce.</p> <p>Georgetown researchers found that <a href="http://cew.georgetown.edu/wp-content/uploads/GeorgetownCEW_Business-Degrees-Press-Release_6-28-22.pdf" rel="noopener">earning a degree in business</a> pays off more than many other types of degrees — although graduates in health, engineering, and computer and information sciences programs tend to have an even higher financial return.</p> <p>The study finds that “the majority of business programs lead to median earnings that are roughly 10 times students’ debt payments two years after graduation.”</p>  <p>But the power of a business degree is particularly potent when it’s from a handful of schools. Following are the master’s, bachelor’s and associate’s degree business programs that earn students the largest salaries following graduation, according to the Georgetown report.</p> <p><a href="https://www.moneytalksnews.com?utm_source=msn&utm_medium=feed&utm_campaign=msn-newsletter-signup#newsletter">It’s not the usual blah, blah, blah. Click here to sign up for our free newsletter.</a></p> <h3>Sponsored: Add $1.7 million to your retirement</h3> <p>A recent Vanguard study revealed a self-managed $500,000 investment grows into an average $1.7 million in 25 years. But under the care of a pro, the average is $3.4 million. That’s an extra $1.7 million!</p> <p>Maybe that’s why the wealthy use investment pros and why you should too. How? With SmartAsset’s free <a href="https://www.moneytalksnews.com/smartasset-msn-nine"> financial adviser matching tool</a>. In five minutes you’ll have up to three qualified local pros, each legally required to act in your best interests. Most offer free first consultations. What have you got to lose? <strong><a href="https://www.moneytalksnews.com/smartasset-msn-nine">Click here to check it out right now.</a></strong></p>

As the name implies, this is what you’re good at. However, digging deeper into your strengths is vital to career success. In the context of your job search, it’s your on-the-job experience, certificates, and education. Along with all of those hard skills , list out your soft skills .

Include anything that sets you apart or might give you an edge over the competition. If you’re drawing a blank, think back to previous performance reviews or feedback from professors, previous managers, or coworkers. That should give you a good starting place for your list.

Perhaps you’re an excellent communicator, able to articulate complex ideas in a way anyone can understand. Or, maybe your project management skills have kept your previous teams on track and under budget. These experiences, skills, and talents make you a catch for employers.

Brainstorming questions :

  • What top three skills help me approach projects uniquely from others with the same title?
  • What tasks or situations have made me feel the most confident and effective?
  • What personal qualities do my bosses and coworkers acknowledge or praise (team leadership, innovative thinking, attention to detail)?
  • What accomplishment am I most proud of in my career?

<p>Seeing the wide range of functions that your memory supports you in at work, it’s easy to understand how a poor memory can render you ineffective in different parts of your job, which in turn can hurt your career.</p> <p>These are just a few of the ways that a faltering or faulty memory can set you up for career challenges:</p> <ul> <li><strong>You’ll have a difficult time learning new things</strong>. Whether it’s HR procedures, departmental processes, or even your own role, you won’t be able to stay on top of the details with a poor memory.</li> <li><strong>You’ll be less adaptable</strong>. To succeed in today’s work environment, you must be adaptable as a professional and able to draw on past successes and failures, which requires a strong memory.</li> <li><strong>You’ll be a weak problem-solver</strong>. Your memory helps you to be innovative, creative, and figure out solutions; a lackluster memory means you’ll have less ability to <a href="https://www.flexjobs.com/blog/post/do-you-solve-problems-for-employers-or-create-them/">solve problems on the job</a>, as well as in your longer-term career.</li> </ul>

Avoid spiraling into self-criticism. Consider your weaknesses in the context of a future job or promotion you’d like. Be honest about where your skills lie and where they need improvement in order to achieve your goals.

  • What skills do I feel less confident in, but need to advance in my field?
  • Have I received feedback from colleagues, supervisors, or clients about specific aspects of my work that need improving?
  • Are there recurring patterns in my professional life that lead to being overwhelmed?
  • What gaps in my education, certification, or professional development do I need to address?

No one’s perfect, and recognizing areas for improvement is good. Perhaps you need help with public speaking or getting too anxious when it’s time to present in a meeting. Or, maybe you’ve received specific feedback, such as your writing could be more transparent, or you can only progress once you become proficient in specific software.

Your weaknesses might not be interpersonal. They could be qualifications you need, such as specific software or certification. These aren’t failures but areas where you can grow.

swot analysis on business plan

Opportunities

At first glance, your opportunities overlap with your weaknesses. But they’re two very distinct categories. Opportunities refer to external factors that you don’t control. You’ll add potential careers and positions that you might pursue. That could be a company whose products or mission aligns more closely with your interests.

You may be tech-savvy with a passion for helping others. Have new digital tools created opportunities in health or finance that weren’t there before? This could be a perfect niche for you to explore.

On the other hand, it could be a more lucrative salary or flexible schedule that you’re after. Maybe technology is advancing and creating growth in a specific area of your job. Are there new roles opening up because of that? Those are opportunities for your job search and your career.

  • Are there any projects or initiatives your team hasn’t approached yet but would be a great fit?
  • What industry advancements are happening that you could lean into and help your team embrace?
  • Is there growth potential on the horizon due to company expansion or retirement? How do you set yourself up for promotion when those opportunities arise?
  • Is there a specific aspect of your role that you really enjoy? How could you set yourself up for a career move where you can focus more heavily on that aspect?

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<p>When assessing threats in the context of your job search or <a href="https://www.flexjobs.com/blog/post/3-tips-planning-a-career-modern-workforce/" rel="noopener noreferrer">career plan</a>, consider all of the factors beyond your control. Analyze industry trends, job market competition, technological advancements, or economic conditions. Although you can’t eliminate these external factors, you can develop strategies to mitigate their impact on your career path.</p> <p><strong>Brainstorming questions</strong>:</p> <ul> <li>Is your company considering a merger or acquisition that could limit your momentum?</li> <li>Are technology advances significantly impacting your industry, possibly leading to fewer high-quality positions?</li> <li>Has your life situation or health impacted your ability to fulfill your duties?</li> <li>Does your current situation lack opportunity for growth?</li> </ul> <p>Economic factors, like local and national financial concerns, are well outside your control. As you craft your job search and overall career plan, strategize effectively to weather any threats.</p> <p><a href="https://www.moneytalksnews.com/slideshows/surprising-things-you-can-sell-for-extra-money/">Related: 17 Surprising Things You Can Sell for Extra Money</a></p>

When assessing threats in the context of your job search or career plan , consider all of the factors beyond your control. Analyze industry trends, job market competition, technological advancements, or economic conditions. Although you can’t eliminate these external factors, you can develop strategies to mitigate their impact on your career path.

  • Is your company considering a merger or acquisition that could limit your momentum?
  • Are technology advances significantly impacting your industry, possibly leading to fewer high-quality positions?
  • Has your life situation or health impacted your ability to fulfill your duties?
  • Does your current situation lack opportunity for growth?

Economic factors, like local and national financial concerns, are well outside your control. As you craft your job search and overall career plan, strategize effectively to weather any threats.

Related: 17 Surprising Things You Can Sell for Extra Money

<p>Around 60 million Americans now freelance. Some do so for a little extra cash on the side, while others make a full-time living contracting with businesses.</p> <p>Freelancers need the right skills to succeed. But what are they?</p> <p><a class="notion-link-token notion-enable-hover" href="https://www.upwork.com/press/releases/upwork-unveils-most-in-demand-skills-for-independent-professionals-in-2023" rel="noopener noreferrer"><span>Upwork</span></a>, a marketplace for freelance work, recently ranked the 10 most in-demand job skills across five categories for independent workers in 2023.</p>  <p>In compiling its list, Upwork looked at skills data from its own database based on freelancer earnings in the U.S. from January through October 2022.</p> <p>Following is the list of the top skills for freelancers this year.</p> <p><a href="https://www.moneytalksnews.com?utm_source=msn&utm_medium=feed&utm_campaign=msn-newsletter-signup#newsletter">It’s not the usual blah, blah, blah. Click here to sign up for our free newsletter.</a></p> <h3>Sponsored: Add $1.7 million to your retirement</h3> <p>A recent Vanguard study revealed a self-managed $500,000 investment grows into an average $1.7 million in 25 years. But under the care of a pro, the average is $3.4 million. That’s an extra $1.7 million!</p> <p>Maybe that’s why the wealthy use investment pros and why you should too. How? With SmartAsset’s free <a href="https://www.moneytalksnews.com/smartasset-msn-nine"> financial adviser matching tool</a>. In five minutes you’ll have up to three qualified local pros, each legally required to act in your best interests. Most offer free first consultations. What have you got to lose? <strong><a href="https://www.moneytalksnews.com/smartasset-msn-nine">Click here to check it out right now.</a></strong></p> <p class="disclosure"><em>Advertising Disclosure: When you buy something by clicking links on our site, we may earn a small commission, but it never affects the products or services we recommend.</em></p>

Apply SWOT Analysis in Your Job Search

Once you’ve got a target, you can create a plan to get there. Consider how your experiences align with your target and what development you need, and plan to meet any external threats you listed.

Self-awareness is powerful! But you still need to take action on your findings. Create an actionable plan using SMART goal-setting — make your goals specific, measurable, achievable, relevant, and timely (SMART).

Break down larger tasks into smaller, more approachable tasks to build momentum.

If you need help building a clear path from where you’re at to where you want to be, consider working with a mentor or career coach to help you strategize. Remember to put a placeholder on your calendar for each quarter to reassess your SWOT analysis and adjust as needed.

Using a SWOT analysis to help you create a clear pathway is an innovative way to take a step back and strategize your career moves. It can offer a powerful insight that enables you to navigate the job market with more focus, intention, and confidence. So, roll up your sleeves and start SWOT-ing your way to a successful career!

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Business Terms Glossary

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68 min. read

Updated February 23, 2024

To start and run a business , you often need to understand business terms that may not be well-defined in a standard dictionary.

Our glossary of business terms provides definitions for common terminology and acronyms in business plans , accounting, finance, funding , and other aspects of small business.

Accounts Payable (AP)

Accounts payable (AP) are bills to be paid as part of the normal course of business.

This is a standard accounting term, one of the most common liabilities, which normally appears in the balance sheet listing of liabilities. Businesses receive goods or services from a vendor, receive an invoice, and until that invoice is paid the amount is recorded as part of “accounts payable.”

Accounts Receivable (AR)

Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.

The standard procedure in business-to-business sales is that when goods or services are delivered the come with an invoice, which is to be paid later. Business customers expect to be invoiced and to pay later. The money involved goes onto the seller’s books as accounts receivable, and onto the buyer’s books as accounts payable.

Accrual-Based Accounting

Accrual-based accounting is standard business accounting, which assumes there will be accounts payable (Bills to be paid as part of the normal course of business) and/or sales on credit (sales made on account; shipments against invoices to be paid later), as opposed to cash basis only.

For example, most businesses have regular bills such as rent, utilities, and often inventory purchase which are not paid for at the exact moment of purchase, but are invoiced. Most businesses will also not be able to collect on all of their sales immediately in cash, but must bill the purchaser or wait for payment on at least some percentage of their sales (the exact percentage varies by industry).

Accumulated Depreciation

Total accumulated depreciation reduces the formal accounting value (called book value) of assets. Each month’s accumulated balance is the same as last month’s balance plus this month’s depreciation.

An acid test is a business’s short-term assets minus accounts receivable and inventory, divided by short-term liabilities.

This tests a company’s ability to meet its immediate cash requirements. It is one of the more common business ratios used by financial analysts.

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Acquisition Costs

Acquisition costs are the incremental costs involved in obtaining a new customer.

Adaptive Firm

An adaptive firm is an organization that can respond to and address changes in their market, their environment, and/or their industry to better position themselves for survival and profitability.

To be adaptive, it’s smart to look at your business critically—and a tool like a SWOT analysis can be helpful here.

Adventure Capital

Adventure capital is capital needed in the earliest stages of the venture’s creation before the product or service is available to be provided.

Advertising Opportunity

A product or service may generate additional revenue through advertising if there is benefit from creating additional awareness, communicating differentiating attributes, hidden qualities, or benefits. Optimizing the opportunity may involve leveraging strong emotional buying motives and potential benefits.

An agent is a business entity that negotiates, purchases, and/or sells, but does not take title to the goods.

Asset Turnover

Asset turnover is sales divided by total assets . Important for comparison over time and to other companies of the same industry. This is a standard business ratio.

Assets are property that a business owns, including cash and receivables, inventory, and so on.

Assets are any possessions that have value in an exchange. The more formal definition is the entire property of a person, association, corporation, or estate applicable or subject to the payment of debts. What most people understand as business assets are cash and investments, accounts receivable, inventory, office equipment, plant and equipment, and so on.

Assets can be long-term or short-term, and the distinction between these two categories might be whether they last three years, five years, 10 years, or whatever; normally the accountants decide for each company and what’s important is consistency. The government also has a say in defining assets, because it has to do with tax treatment; when you buy a piece of equipment, if you call that purchase an expense then you can deduct it from taxable income.

If you call it an asset you can’t deduct it, but you can list it on your financial statement among the assets. The tax code controls how businesses decide to categorize spendings into assets or expenses.

Back End (Websites)

Back end and front end describe website program interfaces relative to the user.

The front end of your website is how it looks and how a user interacts with it: the graphic design and HTML portion—some people call this the user interface or UI.

In contrast, the back end handles the dynamic parts of the site, that your website visitors generally don’t see or interact with such as a newsletter, an administration page, a registration database, a contact page or more complicated web applications.

Your back end interfaces with your UI and makes your website work.

Balance Sheet

The balance sheet is one of three essential parts that form the bedrock of a company’s financial statements: cash flow, balance sheet, and income statement.

The balance sheet is a snapshot of your company’s assets, liabilities, and owner’s equity at a specific point in time. It shows what a company owns (assets), what it owes (liabilities), and how much owners and shareholders have invested (equity).

A balance sheet always has to balance: Assets = Liabilities + Equity

For more, read our article here on Bplans that gives an overview of what a balance sheet is .

A benchmark is a standard or guideline used to compare some aspect of a business to some objective or external standard measure.

For example, when a banker compares a business’ profitability to standard financial ratios for that type of business, the process is sometimes referred to as “benchmarking.”

Industry benchmarks can tell you whether you are matching the profit margins of your peers, keeping too much inventory on hand, or getting paid faster or slower than others.

For more on small business financials, see The Key Elements of the Financial Plan .

Your company’s brand includes your business name, logo, sign, symbol, design, or a combination of all used to differentiate your goods or services from competitors.

Brand Equity

Brand equity is the added value a brand name identity brings to a product or service beyond the functional benefits provided. For example, Apple benefits from the fact that its brand name is a household name in smartphones and computers. Apple built a brand that seems fundamentally different from all other computers and smartphones.

Brand Extension Strategy

Brand extension strategy is the practice of using a current brand name to enter a new or different product class. An example of this is the ride-sharing company Uber’s foray into scooters and bike share.

Brand Recognition

Brand recognition refers to a customer’s ability to identify a brand based on its name, logo, colors, or other aspects of a marketing campaign.

Break-Even Analysis

A break-even analysis is used to assess the expected profitability of a company or a single product. It helps you determine at what point revenues and expenditures are equal.

Break-even is usually expressed in terms of the number of units you’ll need to sell or how much revenue you’ll need to generate.

The break-even analysis uses three assumptions to determine a break-even point: fixed costs, variable costs, and unit price. Fixed costs and variable costs are both included in this glossary, and unit price is the average revenue per unit of sales.

The formula for the break-even point in sales amount is: = fixed costs/(1-(Unit Variable Cost/Unit Price)).

The break-even analysis is often confused with the payback period (also in this glossary), because many people interpret breaking even as paying back the initial investment.

However, this is not what the break-even analysis actually does. Despite the common and more general use of the term “break even,” the financial analysis has an exact definition as explained above.

One important disadvantage of the break-even analysis is that it requires estimating a single per-unit variable cost, and a single per-unit price or revenue, for the entire business. That is a hard concept to estimate in a normal business that has a variety of products or services to sell.

Another problem that comes up with break-even is its preference for talking about sales and variable cost of sales in units. Many businesses, especially service businesses, don’t think of sales in units, but rather as sales in money. In those cases, the break-even analysis should think of the dollar as the unit, and state variable costs per unit as variable costs per dollar of sales.

Break-Even Point

The break-even point is the output of a standard break-even analysis. The unit sales volumes or actual sales amounts a company needs to equal its running expense rate and not lose or make money in a given month.

The formula for the break-even point in sales amount is: = Regular running costs/(1-(Unit Variable Cost/Unit Price)).

This should not be confused with the recovering initial investment through the regular operation of a business. That concept, often confused with break-even, is called the payback period.

For more detail on the subject, read: What Is Break Even Analysis?

A broker is an intermediary that serves as a go-between for the buyer or seller.

Check out our latest articles on law and taxes for more information on the legal side of setting up and managing your business.

Bundling is the practice of marketing two or more product or service items in a single package with one price.

Burden Rate

Burden rate refers to personnel burden, the sum of employer costs over and above salaries (including employer taxes, benefits, and so on).

Business Mission

A business mission is, also called a mission statement, is a brief description of an organization’s purpose with reference to its customers, products or services, markets, philosophy, and technology.

For more on your business mission, see How to Write a Mission Statement With 10 Examples

Business Plan

A business plan is a strategic roadmap for any new or growing business or startup venture. Formal business plans are generally required by bank lenders, angel investors, and venture capitalists if you’re seeking funding to grow your company. 

A business plan captures the opportunity see for your company: it describes your product or service and your business model, the target market you’ll serve. 

It also includes details on how you’ll execute your plan: how you’ll price and market your solution, and your financial projections.

Check out our full guide covering the basics of business plans .

Buy-Sell Agreement

A buy-sell agreement is an agreement designed to address situations in which one or more of the entrepreneurs want to sell their interest in the venture.

For more on exiting your business, check out our article on selling your business .

C Corporation (C Corp)

The C corporation is the classic legal entity of the vast majority of successful companies in the United States.

Most lawyers would agree that the C corporation is the structure that provides the best shielding from personal liability for owners, and provides the best non-tax benefits. This is a separate legal entity, different from its owners, which pays its own taxes.

Most lawyers would also probably agree that for a company that has ambitions of raising major investment capital and eventually going public, the C corporation is the standard legal entity.

Compound Average Growth Rate (CAGR)

Compound annual growth rate (CAGR) is the rate of return that would be required for an investment to grow from its beginning balance to its ending balance if you reinvest profits every year.

The standard formula for compound average growth rate is: (last number/first number)^(1/periods)-1

Cannibalization

Cannibalization is the undesirable tradeoff where sales of a new product or service decrease sales from existing products or services and minimize or detract from the total revenue.

Capital Assets

Capital assets are long-term assets, also known as fixed assets.

These terms are interchangeable. Assets are generally divided into short-term and long-term assets, the distinction depending on how long they last.

Usually, the difference between short-term and long term is a matter of accounting and financial policy. Five years is probably the most frequent division point, meaning that assets that depreciate over more than five years are long-term assets. Ten years and three years are also common.

Capital Expenditure

Spending on capital assets (also called plant and equipment, fixed assets, or long-term assets).

Capital Input

Capital input can also be called investment, or new investment. It is new money being invested in the business, not as loans or repayment of loans, but as money invested in ownership.

This is also money at risk. It will grow in value if the business prospers, and decline in value if the business declines. This is closely related to the concept of paid-in capital, on the balance sheet table. 

Paid-in capital is the amount of money actually invested in the business as money, checks written by investors. Paid-in capital increases only when there is new investment. It is different from retained earnings.

Cash normally means bills and coins, as in paying in cash.

However, the term is used in a business plan to represent the bank balance, or checking account balance.

For more on cash, check out our article on forecasting cash flow .

Cash basis means an accounting system that doesn’t use the standard accrual accounting. 

It records only cash receipts and cash spending, without assuming sales on credit (sales made on account; shipments against invoices to be paid later) or accounts payable (bills to be paid as part of the normal course of business).

ash flow measures how much money is moving into and out of your business during a specific period of time.

Businesses bring in money through sales, returns on investments, and from loans and investments—that’s cash flowing into the business.

And businesses spend money on supplies and services, as well as utilities, taxes, loan payments, and other bills—that’s cash flowing out.

Cash flow is measured by comparing how much money flows into a business during a certain period of time compared to how much money flows out of that business during that same period. Usually, cash flow is measured over the course of a month or a quarter.

Cash Flow Budget

A cash flow budget is a budget that provides an overview of cash inflows and outflows during a specified period of time.

This is often called the cash flow, or the cash budget. Just as cash flow is one of the most critical elements of business, the cash flow projection or table is one of the most critical elements of a business plan.

Cash Flow Statement

The cash flow statement is one of the three main financial statements (along with the income statement and balance sheet) that shows the financial position and health of a business.

The cash flow statement shows actual cash inflows and outflows of a business over a specified period of time, usually a month or a quarter. The statement then compares cash received to cash spending to determine if a business is cash flow negative or positive.

Cash sales are sales made in cash, with credit cards, or by check. The opposite of sales on credit (sales made on account; shipments against invoices to be paid later).

Cash Spending

Cash spending is money a business spends when it pays obligations immediately instead of letting them wait for a few days first.

Central Driving Forces Model

The central driving forces model is an entrepreneurial-based model that considers the positives and negatives of three areas of the venture; founder(s), opportunities, and resources. 

The model then evaluates these areas regarding the “fits and gaps” that indicate correlating strengths or weaknesses for the venture. The CDF model also considers industry and market information in the overall analysis.

Channel Conflicts

Channel conflicts refer to a situation where one or more channel members believe another channel member is engaged in behavior that is preventing it from achieving its goals. Channel conflict most often relates to pricing issues.

Channels of Distribution

Channels of distribution are the system where customers are provided access to an organization’s products or services.

Click-Through Rate

Click-through rate is a way of measuring the success of an online advertising campaign.

A click-through rate (CTR) is obtained by dividing the number of users who clicked on an ad on a webpage by the number of times the ad was delivered (impressions).

For example, if your banner ad was delivered 100 times (impressions delivered) and 1 person clicked on it (clicks recorded), then the resulting CTR would be 1%.

Co-Branding

Co-branding is the pairing of two manufacturer’s brand names on a single product or service.

Cost of Goods Sold

The cost of goods sold is traditionally the costs of materials and production of the goods a business sells.

For a manufacturing company this is materials, labor, and factory overhead. For a retail shop it would be what it pays to buy the goods that it sells to its customers.

For service businesses, that don’t sell goods, the same concept is normally called “cost of sales,” which shouldn’t be confused with “sales and marketing expenses.” The cost of sales in this case is directly analogous to cost of goods sold. 

For a consulting company, for example, the cost of sales would be the compensation paid to the consultants plus costs of research, photocopying, and production of reports and presentations.

In standard accounting, costs of sales or costs of goods sold are subtracted from sales to calculate gross margin. 

These costs are distinguished from operating expenses, because gross profit is gross margin less operating expenses. Costs are not expenses.

Collection Period (Days)

A collection period is the average number of days between delivering an invoice and receiving the money.

The formula is: =(Accounts_receivable_balance*360)/(Sales_on_credit*12)

In business, a commission is the compensation paid to the person or entity based on the sale of a product; commonly calculated on a percentage basis.

The most frequent commission formula is gross margin multiplied by the commission percentage.

Commission Percent

A commission percent is an assumed percentage used to calculate commission expense as the product of commission percent multiplied by sales, gross margin, or related sales items.

Community Interest Company (CIC)

A CIC is a new type of limited company in the United Kingdom, designed for social enterprises that want to use their profits and assets for the public good.

CICs will be easy to set up, with all the flexibility and certainty of the company form, but with some special features to ensure they are working for the benefit of the community. This is achieved by a “community interest test” and “asset lock”, which ensure that the CIC is established for community purposes and the assets and profits are dedicated to these purposes.

Registration of a company as a CIC has to be approved by the regulator who also has a continuing monitoring and enforcement role.

Competitive Advantage

A competitive advantage is strategic development where customers will choose a firm’s product or service over its competitors based on significantly more favorable perceptions or offerings.

Competitive Analysis

Competitive analysis means assessing and analyzing the comparative strengths and weaknesses of competitors; may include their current and potential product and service development and marketing strategies.

Competitive Entry Wedges

Competitive entry wedges are strategic competitive advantages and justification for entering an established market or activity that provides recognizable and known value.

The four competitive entry wedges include:

  • New product or service
  • Parallel competition
  • Franchise entry

Completed Store Transactions

Completed store transactions refer to a conversion value measuring the number of purchases made on the website.

Concentrated Target Marketing

Concentrated target marketing is a process that occurs when a single target market segment is pursued.

Contribution

Contribution can have different meanings in different context.

When the contribution is applied to a product or product line, it means the difference between total sales revenue and total variable costs, or, on a per-unit basis, the difference between unit selling and the unit variable cost. It may be expressed in percentage terms (contribution margin) or dollar terms (contribution per unit).

Contribution Margin

Contribution is frequently expressed as contribution margin for a whole company or across a group or product line, in which case it can be taken as gross margin less sales and marketing expenses.

Conversion Rate

A conversion rate is the percentage of unique website visitors who take a desired action upon visiting the website.

The desired action may be submitting a sales lead, making a purchase, viewing a key page of the site, downloading a file, or some other measurable action.

Core Marketing Strategy

Core marketing strategy is a statement that communicates the predominant reason to buy to a specific target market.

Corporation

Corporations are either the standard C corporation, or the small business S corporation.

The C corporation is the classic legal entity of most successful companies in the United States. The S corporation is used for family companies and smaller ownership groups.

The clearest distinction from C is that the S corporation’s profits or losses go straight through to the S corporation’s owners, without being taxed separately first. 

In practical terms, this means that the corporation’s owners can take their profits home without first paying the corporation’s separate tax on profits. Profits are taxed once for the S owner, and twice for the C owner. The C corporation doesn’t send its profits home to its owners as much as the S corporation because it usually has different goals and objectives. It often wants to grow and go public, or it already is public.

In most states, an S corporation is owned by a limited number (25 is a common maximum) of private owners, and corporations can’t hold stock in S corporations, just individuals. Corporations can switch from C to S and back again, but not often. The IRS has strict rules for when and how those switches are made. 

You’ll almost always want to have your CPA and, in some cases, your attorney guide you through the legal requirements for switching.

Corridor Principal

The corridor principle is the principle where an entrepreneurial venture may find that it has significantly changed its focus from the initial concept of the venture as it has continually responded and adapted to its market and the desire to optimize profitability potential.

Cost of Sales

Cost of sales refers to the costs associated with producing the sales.

In a standard manufacturing or distribution company, this is the same as the cost of the goods sold. In a services company, this is more likely to be personnel costs for people delivering the service or subcontracting costs.

This term is commonly used interchangeably with “cost of goods sold,” particularly for a manufacturing, retail, distribution, or other product-based company. In these cases, it is traditionally the costs of materials and production of the goods a business sells.

For a manufacturing company, this is materials, labor, and factory overhead. 

For a retail shop, it would be what it pays to buy the goods that it sells to its customers. 

For service businesses that don’t sell goods, the concept is normally called “cost of sales,” which shouldn’t be confused with “sales and marketing expenses.” The cost of sales, in this case, is directly analogous to cost of goods sold.

In standard accounting, costs of sales or costs of goods sold are subtracted from sales to calculate gross margin. These costs are distinguished from operating expenses, because gross profit is gross margin less operating expenses. Costs are not expenses.

For more on costs of goods sold, see our article on the LivePlan blog: What Are Direct Costs?

Cross Elasticity of Demand

Cross elasticity of demand is the change in the quantity demanded of one product or service, impacting the change in demand for another product or service.

Current Assets

Current assets are the same as short-term assets.

Current Debt

Current debt refers to short-term debt and short-term liabilities.

Current Liabilities

Current liabilities refer to short-term debt and short-term liabilities.

Doing Business As (DBA)

DBA stands for “doing business as ,” which is a company name, also commonly called a “fictitious business name.”

When a sole proprietor operates a company using any name except his or her own given name, then the DBA or fictitious business name registration establishes the legal ownership to satisfy banks, local authorities, and customers.

So when you start the Acme Restaurant, unless you are named Acme, you need your DBA to open a bank account in that name, pay employees, and do business.

You can usually obtain this registration through the county government, and the cost is no more than a small registration fee plus a required newspaper ad, for a total of less than $100 in most states.

Debt and Equity

Debt and equity is the sum of liabilities and capital. This should always be equal to total assets.

Depreciation

Depreciation is an accounting and tax concept used to estimate the loss of value of assets over time. For example, cars depreciate with use.

Differentiated Target Marketing

Differentiated target marketing is a process that occurs when an organization simultaneously pursues several different market segments, usually with a different strategy for each.

Differentiation

Differentiation is an approach to create a competitive advantage based on obtaining a significant value difference that customers will appreciate and be willing to pay for, and which ideally will increase their loyalty as a result.

Direct Cost of Sales

Direct cost of sales is a shortcut for cost of goods sold: traditionally, the costs of materials and production of the goods a business sells, or the costs of fulfilling a service for a service business.

Direct Mail Marketing

Direct mail marketing is a form of direct marketing that involves sending information through a mail process, physical or electronic, to potential customers.

Direct Marketing

Direct marketing refers to any method of distribution that gives the customer access to an organization’s products and services without intermediaries; also, any communication from the producer that communicates with a target market to generate a revenue producing response.

A directory is a computer term related to the operating system on IBM and compatible computers. Disk storage space is divided into directories.

Distinctive Competency

A distinctive competency is an organization’s strengths or qualities including skills, technologies, or resources that distinguish it from competitors to provide superior and unique customer value and, hopefully, is difficult to imitate.

Diversification

Diversification is a product-market strategy that involves the development or acquisition of offerings new to the organization and/or the introduction of those offerings to the target markets not previously served by the organization.

Dividends refers to money distributed to the owners of a business as profits.

Dual Distribution

Dual distribution is the practice of simultaneously distributing products or services through two or more marketing channels that may or may not compete for similar buyers.

Early Adopters

Early adopters are one type of adopter in Everett Rogers’ diffusion of innovations framework that describes buyers that follow “innovators” rather than be the first to purchase.

Early Majority

An early majority is one type of adopter in Everett Rogers’ diffusion of innovations framework that describes those interested in new technology that wait to purchase until these innovations are proven to perform to the expected standard.

Also called income or profits, earnings are the famous “bottom line”: sales less costs of sales and expenses.

Earnings Before Interest and Taxes (EBIT)

EBIT refers to earnings before interest and taxes.

Earnings Before Interest Taxes Depreciation and Amortization (EBITDA)

Earnings before interest, taxes, depreciation and amortization (or EBITDA) is equal to the gross margin (the difference between total sales revenue and total direct cost of sales) minus total operating expenses (tax-deductible expenses incurred in conducting normal business operations, such as wages and salaries, rent, and so on), plus any depreciation (The loss of value of assets over time) and amortization.

This is similar to earnings before interest and taxes (EBIT). The difference between the two is that EBIT subtracts all expenses, including depreciation, as an expense, and EBITDA subtracts all expenses except depreciation and amortization.

Economies of Scale

Economies of scale refers to the benefit that larger production volumes allow fixed costs to be spread over more units lowering the average unit costs and offering a competitive price and margin advantage.

Producing in large volume often generates economies of scale. The per-unit cost of something goes down with volume because vendors charge less per unit for larger orders, and often production techniques and facilities cost less per unit as volume increases. Fixed costs are spread over larger volume.

Effective Demand

Effective demand is when prospective buyers have the willingness and ability to purchase an organization’s offerings.

Effective Tax Rate

The effective tax rate is a comparison of final tax payments compared to actual profits. Usually the effective tax rate is somewhat less than the nominal tax rate because of deductions, credits, etc.

Entrepreneur in Heat (EIH)

The term “entrepreneur in heat” describes an entrepreneur that continues to develop new products and services beyond what the venture can support and inadvertently may diminish the focus and effectiveness of the activities supporting the venture’s primary revenue streams.

Entrepreneur

An entrepreneur is someone who starts a new business venture; someone who recognizes and pursues opportunities others may not see as clearly, and finds the resources necessary to accomplish his or her goals.

Equity is business ownership—capital. Equity can be calculated as the difference between assets and liabilities.

Equity Financing

Equity financing refers to the sales of some portion of ownership in a venture to gain additional capital for startup.

Evaluating Ideas and Opportunities

Evaluating ideas and opportunities is the process of considering ideas versus opportunities, and then screening those opportunities using objective criteria as well as personal criteria.

Everett Rogers

Everett Rogers is an author who studied and published work on the diffusion of innovation.

Exclusive Distribution

Exclusive distribution is a distribution strategy whereby a producer sells its products or services in only one retail outlet in a specific geographical area.

For the purposes of business accounting, expenses are deductible against taxable income. Common expenses are rent, salaries, advertising, travel, and so on.

Questions arise because some businesses have trouble distinguishing between expenses and purchase of assets, especially with development expenses. When your business purchases office equipment, if you call that an expense then you can deduct that amount from taxable income, so it reduces taxes.

Experience Curve

The experience curve is a visual representation, often based on a function of time, from exposure to a process that offers greater information and results in enhanced efficiency and operations advantage.

Features, Advantages, and Benefits (FAB)

A FAB analysis explores the features, advantages, and benefits of a product or service offering.

Marketing plans need to understand these concepts in order to develop effective marketing programs. People often confuse features and benefits; for example, in an automobile, air bags are a feature that produces the benefit of greater safety. 

Advantages fall in between, and features become advantages that offer benefits to the end user.

Failure Rule, Common Causes

Entrepreneurial ventures most often fail due to one or more of these four issues:

  • Inadequate sales (39%)
  • Competitive weaknesses (21%)
  • Excessive operating expenses (11%)
  • Uncollected receivables (9%)

Failure Rule, Exceptions to the Rule

Entrepreneurial ventures most often fail due to one (or more) of the following common issues: inadequate sales, competitive weaknesses, excessive operating expenses, and uncollected receivables.

Exceptions to the failure rule include:

  • High potential ventures
  • Threshold concept
  • Promise of growth
  • Venture capital backing

Fatal 2% Rule

The concept of the fatal 2% rule is that if a venture can just get “2%” of total market share it will be successful.

This percentage can be unattainable based on the approach, limited resources, and/or structure of the industry.

Fighting Brand Strategy

A fighting brand strategy is adding a new brand to confront competitive brands in an established product category.

First Mover

The first mover is a company that attempts to gain an unchallengeable, privileged market position by being the first to establish itself in a given market.

First Mover Advantage

Key first mover advantages include:

  • Reputation effect
  • Experience curve
  • Customer commitment and loyalty

First Mover Disadvantage

These factors can turn first-mover advantages into weaknesses. They include:

  • Resolution of technological uncertainty
  • Resolution of strategic uncertainty
  • Free-rider effect—others duplicate based on the leader’s success
  • Complementary assets to exploit core technological expertise

Fiscal Year

The fiscal year is a standard accounting practice allows the accounting year to begin in any month. Fiscal years are numbered according to the year in which they end. 

For example, a fiscal year ending in February of 2025 is Fiscal 2025, even though most of the year takes place in 2024.

Five Forces Model

Porter’s model considers these forces as they impact an industry and the overall competitive climate:

  • Risk of entry by potential competitors
  • Bargaining power of suppliers
  • Bargaining power of buyers
  • Threat of substitute products
  • Rivalry among established firms

Running costs that take time to wind down: usually rent, overhead, some salaries. Technically, fixed costs are those that the business would continue to pay even if it went bankrupt.

In practice, fixed costs are usually considered the running costs. These are static expenses that do not fluctuate with output volume and become progressively smaller per unit of output as volume increases.

Fixed costs are an important assumption for developing a break-even analysis. The standard break-even formula estimates a break-even point of sales based on per-unit price or revenue, per-unit variable costs, and fixed costs.

Fixed Liabilities

Fixed liabilities are debts—money that must be paid. Usually, debt on terms of longer than five years are fixed liabilities. Also called long-term liabilities.

Fixed liabilities, in contrast to floating liabilities, are secured by assets with a stable value, such as a building or a piece of equipment.

Floating Liabilities

Floating liabilities are debts—money that must be paid. Floating liabilities, in contrast to fixed liabilities, are secured by assets with a constantly changing value, such as a company’s accounts receivable (debtors). These are usually short-term loans.

Focus Group

A focus group refers to small groups of people, usually between nine and 12 in number, representing target audiences, that are brought together to discuss a topic that will offer insight for product development and/or marketing efforts.

Frequency Marketing

Frequency marketing refers to activities that encourage repeat purchasing through a formal program enrollment process to develop loyalty and commitment from the customer base. Frequency marketing is also referred to as loyalty programs.

Front End (Websites)

Front end and back end describe program interfaces relative to the user.

The front end, here, is the appearance of your website. It is the graphic design and HTML portion—some people call this the user interface or UI.

In contrast, the portion of the application you or your developers work with is the back end. The back end handles the dynamic parts of the site, such as a newsletter, an administration page, a registration database, a contact page, or more complicated web applications. Your back end interfaces with your UI and makes your website work.

Full-Cost Price Strategies

Full-cost price strategies are costs that consider variable cost and fixed cost (total cost) in the pricing of a product or service.

Future Value Projections

Future value projections refer to the process of projecting the future value of a venture and/or an investment in the venture. It typically considers an expected rate of return, inflation, and the period of time to assess future value.

Goodwill is when a company purchases another company for more than the value of its assets—which is quite common—the difference is recorded as an asset named “goodwill.”

This is not a general term for the value of a brand, for example, but a very specific accounting term.

For example, if one business buys another business for $1 million then it needs to show the $1 million spent as an asset. If there are only $500 thousand in real assets, the accounting result should be $500,000 in real assets purchased and another $500,000 in “goodwill.”

Gross Margin

Gross margin is the difference between total sales revenue and total cost of goods sold (also called total cost of sales). This can also be expressed on a per unit basis, as the difference between unit selling price and unit cost of goods sold. Gross margin can be expressed in dollar or percentage terms.

Gross Margin Percent

The gross margin percent is the gross margin divided by sales, displayed as a percentage. Acceptable levels depend on the nature of the business. There are providers who can deliver standard gross margins for different types of industries based on SIC (Standard Industry Classification) codes that categorize industries.

Guerrilla Marketing

The term guerrilla marketing comes from Conrad Levinson’s book Guerrilla Marketing, which refers to marketing via events and stimulated media coverage rather than paid advertisements.

Harvesting is most often referring to selling a business or product line, as when a company sells a product line or division or a family sells a business.

  • Impressions

An impression occurs each time an advertisement is seen by a potential customer. For example, in online marketing, an impression happens when an advertisement such as a banner ad loads on a user’s screen, whether for the first time, when returning to a page, or when the ad cycles through dynamically.

Income Statement

Also called profit and loss statement, an income statement is a financial statement that shows sales, cost of sales, gross margin, operating expenses, and profits or losses.

Gross margin is sales less cost of sales, and profit (or loss) is gross margin less operating expenses and taxes. The result is profit if it’s positive, loss if it’s negative.

Initial Public Offering (IPO)

An IPO is a corporation’s initial effort to raise capital through the sale of securities on the public stock market.

Innovation (Evolutionary or Revolutionary)

Innovation refers to the determination if an innovation is a “new and improved” concept taken to the next level (evolutionary), or the rare innovation that revolutionizes a technology or concept to the product or services.

Innovators refers to one type of adopter in Everett Rogers’ diffusion of innovations framework describing the first group to purchase a new product or service.

Integrated Marketing Communications

Integrated marketing communications is the practice of blending different elements of the communication mix in mutually reinforcing ways.

Intensive Distribution

Intensive distribution is a distribution strategy whereby a producer attempts to sell its products or services in as many retail outlets as possible within a geographical area without exclusivity.

Interest Expense

Interest expense is interest paid on debts, and interest expense is deducted from profits as expenses. Interest expense is either long-term or short-term interest.

Intraprenuership

Intrapreneurship refers to entrepreneurial-based activities within a corporation that receive organizational support and resource commitments for an innovative new business experience within the organization itself.

Inventory refers to goods in stock, either finished goods or materials used to manufacture goods.

Inventory Turnover

Inventory turnover is the total cost of sales divided by inventory. Usually calculated using the average inventory over an accounting period, not an ending-inventory value.

Inventory Turns

Also known as inventory turnover, inventory turns are the total cost of sales divided by inventory. Usually calculated using the average inventory over an accounting period, not an ending-inventory value.

A jobber is an intermediary that buys from producers to sell to retailers and offers various services with that function.

Labor, in this context, refers to the labor costs associated with making goods to be sold. This labor is part of the cost of sales, part of the manufacturing and assembly. The row heading refers to fulfillment costs as well, for service companies.

Laggards are one type of adopter in Everett Rogers’ diffusion of innovations framework describing the risk-averse group that follows the late majority that is generally not interested in new technology and are the last customers to buy.

Leveraged Buy Out (LBO)

A leveraged buy-out is a type of purchase of a business that relies heavily on the venture’s cash receipts with expectations of positive cash flow continuing based on historical or other performance indicators.

Liabilities

Liabilities are debts or money that must be paid. Usually, debt on terms of less than five years is called short-term liabilities, and debt for longer than five years is called long-term liabilities.

A life cycle is a model depicting the sales volume cycle of a single product, brand, service, or a class of products or services over time described in terms of the four phases of introduction, growth, maturity and decline.

Limited (Public) Company (AUS)

A public limited company is one where the right to transfer shares and the number of members is not limited. In addition, the company may invite the public to subscribe for its shares and, to deposit money with the company.

Limited Liability Company (LLC)

The LLC form is different for different states, with some real advantages in some states that aren’t relevant in others.

An LLC is usually a lot like an S corporation, a combination of some limitation on legal liability and some favorable tax treatment for profits and transfer of assets. This is a newer form of legal entity, and often harder to establish than a corporation.

Why would you establish an LLC instead of a corporation? That’s a tough legal question, not one we can answer here. In general, the LLC has to be missing two of the four characteristics of a corporation (limited liability, centralized management, continuity of life, and free transferability of ownership interest). 

Still, with the advisability and advantages varying from state to state, here again, this is a question to take to a good local attorney with small business experience.

Limited Liability Partnership

A limited liability partnership is a form of business organization combining elements of partnerships and corporations, in which both managing and non-managing partners are protected from liability to some degree, and have a different tax liability than in a corporation. 

Although this form of business is available in the U.S., the U.K., and Japan, legal details of forming and operating such a company vary from one country to another, and by state within the U.S.

Long-Term Assets

Long-term assets are assets like plant and equipment that are depreciated over terms of more than five years, and are likely to last that long, too.

Long-Term Interest Rate

A long-term interest rate is the interest rate charged on long-term debt.

Long-Term Liabilities

Long-term liabilities are the same as long-term loans. Most companies call a debt long-term when it is on terms of five years or more.

Loss is an accounting concept, the exact opposite of profit, normally the bottom line of the income statement, which is also called profit or loss statement. 

Start with sales, subtract all costs of sales and all expenses, and that produces profit before tax. Subtract tax to get net profit. If the end result is negative, then instead of profit it is called loss.

Loyalty Programs

Loyalty programs are activities designed to encourage repeat purchasing through a formal program enrollment process and the distribution of benefits. Loyalty programs may also be referred to as frequency marketing.

Manufacturer’s Agent

A manufacturer’s agent is an agent who typically operates on an extended contractual basis, often sells in an exclusive territory, offers non-competing but related lines of goods, and has defined authority regarding prices and terms of sale.

A market refers to prospective buyers, individuals, or organizations, willing and able to purchase the organization’s potential offering.

Market Development Funds

Market development funds refer to the monetary resources a company invests to assist channel members increase volume sales of their products or services.

Market Development Strategy

A market development strategy is a product-market strategy whereby an organization introduces its offerings to markets other than those it is currently serving. In global marketing, this strategy can be implemented through exportation licensing, joint ventures, or direct investment.

Market Evolution

Market evolution refers to changes in primary demand for a product class and changes in technology.

Market Penetration Strategy

Market penetration is the amount that your business is able to sell a product or service to customers compared to the estimated total available market (TAM). 

This is a measurement that can help you define the serviceable available market (SAM), which is the portion you estimate that you can acquire. 

Additionally, it can serve as a baseline for developing a strategy to increase your service obtainable market (SOM), or the subset of customers that you can realistically acquire.

Market Plan

Often found within the business plan, the market plan provides details regarding the overall marketing strategy, pricing, sales tactics, service and warranty policies, advertising, promotion, and distribution plans for the venture.

Market Redefinition

Market redefinition refers to changes in the offering demanded by buyers or promoted by competitors to enhance its perception and associated sales.

Market Sales Potential

Market sales potential is the maximum level of sales that might be available to all organizations serving a defined market in a specific period.

Market Segmentation

Market segmentation is the categorization of potential buyers into groups based on common characteristics such as age, gender, income, and geography or other attributes relating to purchase or consumption behavior.

Market Share

Market share is the total sales of an organization divided by the sales of the market they serve.

Marketing refers to the set of planned activities designed to positively influence the perceptions and purchase choices of individuals and organizations.

Check out our guide on the different ways to market your business .

Marketing Audit

A marketing audit is a comprehensive and systematic examination of a company’s marketing environment, objectives, strategies, and activities with a view of identifying and understanding problem areas and opportunities and recommending a plan of action.

Marketing Mix

Marketing mix refers to the activities controllable by the organization. It includes the product, service, or idea offered, the manner in which the offering will be communicated to customers, the method for distributing or delivering the offering, and the price to be charged.

Marketing Plan

A marketing plan is a written document containing descriptions and guidelines for an organization’s or a product’s marketing strategies, tactics, and programs for offering their products and services over the defined planning period, often one year.

Marketing Cost Analysis

Marketing cost analysis refers to assigning or allocating costs to a specified marketing activity or entity in a manner that accurately captures the financial contribution of activities or entities to the organization.

Materials are included in the cost of sales. These are materials involved in the assembly or manufacture of goods for sale.

Materials Included in Cost of Sales

These are materials involved in the assembly or manufacture of goods for sale.

Mission Statement

A mission statement is a statement that captures an organization’s purpose, customer orientation, and business philosophy.

Moving Weighted Average

Moving weighted average is a statistical method to forecast the future based on past results. It is a subset of time series analysis.

Multiple Channel System

A multiple-channel system is a channel of distribution that uses a combination of direct and indirect channels where the channel members serve different segments.

Net Cash Flow

Net cash flow is the projected change in cash position, an increase or decrease in cash balance.

Net Present Value (NPV)

Net present value is a method of discounting future income streams using an expected rate of return to evaluate the current value of expected earnings. It calculates future value in today’s dollars. NPV may be used to determine the current value of a business being offered for sale or capitalized.

Net profit is the operating income less taxes and interest. The same as earnings, or net income.

Net Profit Margin Before Taxes

Net profit margin before taxes is the remainder after cost of goods sold, other variable costs revenue, or simply, total revenue minus total cost. Net profit margin can be expressed in actual monetary values or percentage terms.

Net worth is the same as assets minus liabilities, and the same as total equity; other short-term assets. These might be securities, business equipment, and so on.

New Visitors

In online marketing, a new visitor is a website visitor who has not made any previous visits to the site or page in question.

New Brand Strategy

New brand strategy is the development of a new brand and often a new offering for a product class that has not been previously served by the organization.

Newsletter Subscriptions

In online marketing, newsletter subscription is a conversion value measuring the number of users who voluntarily include themselves in your database and are willing to accept unsolicited emails from you.

Not Invented Here (NIH)

Not invented here is a negative response to innovations and inventions from sources outside the venture’s own research and development activities.

Obligations Incurred

Obligations incurred are business costs or expenses that need to be paid, but wait for a time as accounts payable (in other words, bills to be paid as part of the normal course of business) instead of being paid immediately.

An offering is the total benefits or satisfaction provided to target markets by an organization. An offering consists of a tangible product or service plus related services such as installation, repair, warranties or guarantees, packaging, technical support, field support, and other services.

Offering Mix or Portfolio

An offering mix is an organization’s offerings, including all products and services.

On-costs are labor costs in addition to salaries and wages; that is, payroll tax, workers’ compensation, and other liability insurance, subsidized services to employees, training costs, and so on.

Operating Expenses

Operating expenses are expenses incurred in conducting normal business operations. Operating expenses may include wages, salaries, administrative and research and development costs, but excludes interest, depreciation, and taxes.

Operating Leverage

Operating leverage is the extent to which fixed costs and variable costs are used in the production and marketing of products and services.

Operations Control

Operations control is assessing how well an organization performs marketing activities as it seeks to achieve planned outcomes.

Opportunity Analysis

Opportunity analysis identifies and explores revenue enhancement or expense reduction situations to better position the organization to realize increased profitability, efficiencies, market potential, or other desirable objectives.

Opportunity Cost

Opportunity cost refers to the resource use options given up due to pursuing one activity among several possibilities. Potential benefits foregone as a result of choosing an alternative course of action.

Original Equipment Manufacturer (OEM)

An original equipment manufacturer is the process that is facilitated through licensing or other financial arrangements where the initial producer of a product or service agrees to allow another entity to include, remanufacture, or label products or services under their name and sell through their distribution channels.

It typically results in a “higher volume, lower margin” relationship for the original producer. It offers access to a broader range of products and services the buyer can offer their consumers at more attractive costs.

Other Short-Term Liabilities

Other short-term liabilities are short-term debts that don’t cause interest expenses. For example, they might be loans from founders or accrued taxes (taxes owed, already incurred, but not yet paid).

Outsourcing

Outsourcing is purchasing an item or a service from an outside vendor to replace the performance of the task with an organization’s internal operations.

In online marketing, a request for a file whose type is defined as a page in log analysis. This is generally what people mean when they talk about webpage hits, but is a more accurate way of tracking this metric because of the way log analysis works.

A single pageview (one visitor looking at one page) may generate multiple hits in log analysis, as all the resources required to view the page (images, .js, and .css files) are also requested from the web server.

Paid-In Capital

Paid-in capital is real money paid into the company as investments. This is not to be confused with the par value of stock, or market value of stock. This is actual money to the company as equity investments by owners.

Partnership

Partnerships are hard to describe because they change so much. State laws govern them, but the Uniform Partnership Act has become the law in most states. That act, however, mostly sets the specific partnership agreement as the real legal core of the partnership, so the legal details can vary widely.

Usually, the income or loss from partnerships passes through to the partners without any partnership tax. The agreements can define different levels of risk, which is why you’ll read about some partnerships with general and limited partners, with different levels of risk for each. The agreement should also define what happens if a partner withdraws, buy and sell arrangements for partners, and liquidation arrangements if that becomes necessary.

If you think a partnership might work for your business, do this right. Find an attorney with experience in partnerships, and check for references of present and past clients. This is a complicated area, and a mistake in the agreement will cause a lot of problems.

Payables is short for account payables—bills to be paid as part of the normal course of business. This is a standard accounting term, one of the most common liabilities, which normally appears in the balance sheet listing of liabilities.

Businesses receive goods or services from a supplier, receive an invoice, and until that invoice is paid the amount is recorded as part of “accounts payable.”

Payback Period

A payback period is the number of years an organization requires to recapture an initial investment. This may apply to an entire business operation or an individual project.

Payment Days

Payment days are the average number of days that pass between receiving an invoice and paying it.

It is not a simple estimate; it is calculated with a financial formula: =(Accounts_payable_balance*360)/(Total entries to accounts payable*12)

Payment Delay

Payment delay is the number of days on average a business waits between receiving a bill and paying a bill. Also called payment days.

Payroll refers to wages, salaries, or employee compensation.

Payroll Burden

Payroll burden includes payroll taxes and benefits. It is calculated using a percentage assumption that is applied to payroll.

For example, if payroll is $1,000 and the burden rate is 10 percent, the burden is an extra $100. Acceptable payroll burden rates vary by market, industry, and company.

Penetration Pricing Strategy

Penetration pricing strategy refers to setting a relatively low initial price for a new product or service.

Perceived Risk

Perceived risk is the extent to which a customer or client is uncertain about the consequences of an action, often relating to purchase decisions.

Perceptual Map

A perceptual map is a two or three-dimensional illustration of a customer’s perceptions of competing products comparing select attributes based on market research.

Personal Selling

Personal selling is the use of face-to-face communication between the seller and buyer.

PEST analysis

PEST is a popular framework for situation analysis, looking at political, economic, and social trends. Analyzing these factors can help generate marketing ideas, product ideas, and so on.

Plant and Equipment

Plant and equipment is the same as long-term, fixed, or capital assets. These are generally assets that are depreciated over terms of more than five years, and are likely to last that long, too.

Point of Purchase Advertising (POP)

Point of purchase advertising is a retail in-store presentation that displays product and communicates information to retail consumers at the place of purchase.

A portfolio is the complete array of an organization’s offerings including all products and services. Also called an offering mix.

Positioning

Positioning refers to orchestrating an organization’s offering and image to occupy a unique and valued place in the customer’s mind relative to competitive offerings. A product or service can be positioned on the basis of an attribute or benefit, use or application, user, class, price, or quality.

Premiums refers to a product-oriented promotion that offers some free or reduced-price item contingent on the purchase of advertised or featured merchandise or service.

Price Elasticity of Demand

Price elasticity of demand is the change in demand relative to a change in price for a product or service.

Privately Owned

A company whose shares are not publicly traded on a stock market. Such companies usually have less restrictive reporting requirements than publicly traded companies. A company that is not owned by the government (state-owned).

Pro Forma Income Statement

A pro forma income statement is a projected income statement. Pro forma in this context means projected. An income statement is the same as a profit and loss statement, a financial statement that shows sales, cost of sales, gross margin, operating expenses, and profits.

Pro Forma Statements

The term “pro forma” in front of any financial statement primarily serves to label that version of the statement as not adhering to the strict “generally accepted accounting principles” (GAAP) standards that all publicly-traded companies must use to produce their financial statements.

Major corporations use pro forma statements to illustrate projected numbers, like in the case of a merger or acquisition, or to emphasize certain current figures.

GAAP standards don’t apply to small businesses, so you don’t really need to worry about distinguishing your financial statements as “pro forma” or not—everyone you show them to expects that they’re not GAAP-compliant. But if you want to be technically correct in your terminology, go ahead and call your financial statements “pro forma.”

Product Definition

A product definition is a stage in a new product development process in which concepts are translated into actual products for additional testing based on interactions with customers. 

Product Development

Product development refers to expenses incurred in the development of new products (salaries, laboratory equipment, test equipment, prototypes, research and development, and so on).

Product Development Strategy

A product development strategy is a product-market strategy whereby an organization creates new offerings for existing markets innovation, product augmentation, or product line extensions.

Product Life Cycle (PLC)

Product life cycle refers to the phases of the sales projections or history of a product or service category over time used to assist with marketing mix decisions and strategic options available.

The four stages of the product life cycle include introduction, growth, maturity, and decline, and typically follow a predictable pattern based on sales volume over a period of time.

Product Line

A product line is a group of closely related products with similar attributes or target markets.

Product Line Pricing

Product line pricing refers to the setting of prices for all items in a product line involving the lowest-priced product price, the highest-priced product, and price differentials for all other products in the line.

Profit is an accounting concept, normally the bottom line of the income statement, which is also called profit or loss statement. Start with sales, subtract all costs of sales and all expenses, and that produces profit before tax. Subtract tax to get net profit.

Profit Before Interest and Taxes

Profit before interest and taxes is also called EBIT, for Earnings Before Interest and Taxes. It is gross margin minus operating expenses.

Profit or Loss

Also called profit and loss statement, a profit or loss statement is an income statement is a financial statement that shows sales, cost of sales, gross margin, operating expenses, and profits or losses. 

Proprietary (Private) Limited Company

A Proprietary Limited Company (often abbreviated as “Pty Ltd”) is a private company, in which the right to transfer shares is restricted and the number of members is limited to no more than fifty.

In addition, the company is prohibited from inviting the public to subscribe for its shares and, from inviting the public to deposit money with the company.

Public Relations

Public relations refers to communications often in the form of news distributed in a non-personal form which may include newspaper, magazine, radio, television, internet, or other form of media for which the sponsoring organization does not pay a fee.

Publicly Traded

Publicly traded means a company owned by shareholders who are members of the general public and trade shares publicly, as on the stock market.

Pull Communication Strategy

A pull communication strategy creates interest among potential buyers, who demand the offering from intermediaries, ultimately “pulling” the offering through the channel.

Push Communication Strategy

A push communication strategy is the practice of “pushing” an offering through a marketing channel in a sequential fashion, with each channel focusing on a distinct target market.

The principal emphasis is on personal selling and trade promotions directed toward wholesalers and retailers. 

Questionable Costs

Questionable costs are costs that may be considered as variable or as fixed costs, depending on the specifics of the situation.

Receivables

Short for account receivables, this refers to debts owed to your company, usually from sales on credit. Accounts receivable is a business asset, the sum of the money owed to you by customers who haven’t paid.

The standard procedure in business-to-business sales is that when goods or services are delivered, they come with an invoice, which is to be paid later. Business customers expect to be invoiced and to pay later. The money involved goes onto the seller’s books as accounts receivable and the buyer’s books as accounts payable.

Receivables Turnover

Receivables turnover refers to sales on credit for an accounting period divided by the average accounts receivables balance.

Regional Marketing

Regional marketing is the practice of using different marketing mixes to accommodate unique preferences and competitive conditions in different geographical areas.

Relevant Cost

Relevant cost refers to expenditures that are expected to occur in the future as a result of some marketing action and differ among other potential marketing alternatives.

Repositioning

Repositioning is the process of strategically changing the perceptions surrounding a product or service.

Resource Requirements (Websites)

Your resource requirements are the personnel, time, space, and equipment necessary to create and maintain your website. Remember that a website is never done—it will always require resources, some of which will be used to create new content periodically.

Retained Earnings

Retained earnings are earnings (or losses) that have been reinvested into the company, not paid out as dividends to the owners. When retained earnings are negative, the company has accumulated losses.

Return on Assets

Return on assets is your net profits divided by total assets. It is a measure of profitability.

Return on Investment (ROI)

Return on investment, or ROI is your net profits divided by net worth or total equity. It’s another measure of profitability.

Return on Sales

Return on sales is net profits divided by sales. It’s another measure of profitability.

Return Visitors

In online marketing, a website visitor who has made at least one previous visit to the site or page in question is considered a return visitor.

Rich-Gumpert Evaluation System

The Rich-Gumpert evaluation system is a method of analysis that associates a numeric value between 1 and 4 regarding the spectrums of product development and the entrepreneur and management team.

S Corporation (S Corp)

The C corporation is the classic legal entity of the vast majority of successful companies in the United States. Most lawyers would agree that the C corporation is the structure that provides the best shielding from personal liability for owners, and provides the best non-tax benefits to owers. This is a separate legal entity, different from its owners, which pays its own taxes.

Most lawyers would also probably agree that for a company that has ambitions of raising major investment capital and eventually going public, the C corporation is the standard form of legal entity. The S corporation is used for family companies and smaller ownership groups. The clearest distinction from C is that the S corporation’s profits or losses go straight through to the S corporation’s owners, without being taxed separately first.

In practical terms, this means that the owners of the corporation can take their profits home without first paying the corporation’s separate tax on profits, so those profits are taxed once for the S owner, and twice for the C owner. In practical terms the C corporation doesn’t send its profits home to its owners as much as the S corporation does, because it usually has different goals and objectives. It often wants to grow and go public, or it already is public. In most states an S corporation is owned by a limited number (25 is a common maximum) of private owners, and corporations can’t hold stock in S corporations, just individuals.

Corporations can switch from C to S and back again, but not often. The IRS has strict rules for when and how those switches are made. You’ll almost always want to have your CPA and in some cases your attorney guide you through the legal requirements for switching.

Sales Break Even

Sales break-even is the sales volume at which costs are exactly equal to sales.

The exact formula is =Fixed_costs/(1-(Unit_Variable_Cost/Unit_Price))

Sales Forecast

A sales forecast is the level of sales a single organization expects to achieve based on a chosen marketing strategy and assumed competitive environment.

Sales on Credit

Sales on credit are sales made on account; shipments against invoices to be paid later.

Scrambled Merchandising

Scrambled merchandising is the practice by wholesalers and retailers that carry an increasingly wider assortment of merchandise.

Seed Capital

Seed capital is investment contributed at a very early stage of a new venture, usually in relatively small amounts. It comes even before what they call “first round” venture capital.

How much is that “relatively small amount?” Some high-end high-tech ventures in the heart of Silicon Valley call an investment of $500K seed capital, and other ventures that called $35K investment seed capital, and the following $300K investment the first round. It depends on the point of view.

Selective Distribution

Selective distribution is a strategy where a producer sells its products or services in a few exclusively chosen retail outlets in a specific geographical area.

Selling Approaches

Selling approaches are potential selling resources based on the sales value and the distribution of the product.

Senior Corps of Retired Executives (SCORE)

SCORE is a no-cost consulting and resources service offered through the Small Business Administration.

Shareholders

Shareholders are individuals or companies that legally own one or more shares of stock in a company.

Short-term is normally used to distinguish between short-term and long-term, when referring to assets or liabilities. Definitions vary because different companies and accountants handle this in different ways.

Accounts payable is always a short-term liability, and cash, accounts receivable and inventory are always short-term assets. Most companies call any debt of less than five-year terms short-term debt. Assets that depreciate over more than five years (e.g., plant and equipment) are usually long-term assets.

Short-Term Assets

Short-term assets are cash, securities, bank accounts, accounts receivable, inventory, business equipment, assets that last less than five years or are depreciated over terms of less than five years. Also called current assets.

Short-Term Notes

Short-term notes are the same as short-term loans. These are debts with terms of five years or less.

Short-Term Liabilities

Short-term liabilities are debts with terms of five years or less. These are also called current liabilities, short-term loans, or short-term (current) debts. These may also include short-term debts that don’t cause interest expenses.

For example, they might be loans from founders or accrued taxes (taxes owed, already incurred, but not yet paid).

Simple Linear Regression

Simple linear regression is a linear correlation that offers a straight-line projection based on the variables considered.

Situation Analysis

A situation analysis is the assessment of operations to determine the reasons for the gap between what was or is expected, and what has happened or will happen.

Skimming Pricing Strategy

Skimming pricing strategy refers to setting a relatively high initial price for a new product or service when there is a strong price-perceived quality relationship that targets early adopters who are price insensitive. The price may be lowered over time.

Slotting Allowances

Slotting allowances are payments to store chains for acquiring and maintaining shelf space.

Small Business Investment Council (SBIC)

The SBIC is a division of the Small Business Administration that offers “venture capital-like” resources to higher-risk businesses seeking capital.

Sole Proprietorship

The simplest business structure is the sole proprietorship. Simply put, your business is a sole proprietorship if you don’t create a separate legal entity for it.

This is true whether you operate it in your own name, or under a trade name. If it isn’t your own name, then you register a company name as a “Fictitious business name,” also called a DBA (“Doing Business As”).

Depending on your state, you can usually obtain this through the county government, and the cost is no more than a small registration fee plus a required newspaper ad, for a total of less than $100 in most states.

Sole Trader

A sole trader is the easiest and quickest form of corporation for a small, privately-owned business. Your Memorandum and Articles of Association are usually fairly straightforward to obtain, and your taxes will be lower than those of a public company.

However, the owner of a sole trader is personally liable for all of its actions and debts, and may not be entitled to benefits, like unemployment payments, that would accrue to those running public companies.

Starting Date

Starting date refers to the starting date for the entire business plan.

Goods on hand, either finished goods or materials to be used to manufacture goods. Also called inventory.

Stock can also refer to privately held or publicly traded shares or securities representing an investment in, or partial ownership of, a business. Public trading of such stock occurs on the stock market.

Stock Market

The stock market is the organized trading of stocks, bonds, or other securities, or the place where such trading occurs.

Stock Turnover

Stock turnover is the total cost of sales divided by inventory (materials or goods on hand). Usually calculated using the average inventory over an accounting period, not an ending-inventory value. Also called inventory turnover.

Strategic Control

Strategic control is the practice of assessing the direction of the organization as evidenced by its implicit or explicit goals, objectives, strategies, and capacity to perform in the context of changing environmental and competitive actions.

Strategic Marketing Management

Strategic marketing management is the planned process of defining the organization’s business, mission, and goals; identifying and framing organizational opportunities; formulating product-market strategies, budgeting marketing, financial, and production resources; developing reformulation.

Success Factors

Primary success factors include considerations regarding:

  • The choice of business based on the status of the market
  • Education and experience
  • People and collaboration
  • Creativity and innovation versus business skills and networks
  • Incubation potential
  • Leveraging available resources
  • Management practices

Success Requirements

Success requirements are the basic tasks that must be performed by an organization in a market or industry to compete successfully.

Sunk cost refers to past expenditures for a given activity that are typically irrelevant in whole or in part to future decisions. The “sunk cost fallacy” is an attempt to recoup spent dollars by spending still more dollars in the future.

Surplus or Deficit

Surplus or deficit is a term used by nonprofits. It’s also called profit and loss statement or an income statement in for-profit plans.

An income statement is a financial statement that shows funding, cost of funding, gross surplus, operating expenses, and surplus or deficit. Gross surplus is funding less cost of funding, and surplus (or deficit) is gross surplus less operating expenses and taxes. The result is surplus if it is positive, a deficit if it is negative.

Switching Costs

Switching costs are the costs incurred in changing from one provider of a product or service to another. Switching costs may be tangible or intangible costs incurred due to the change of this source.

SWOT Analysis

A SWOT analysis is a formal framework of identifying and framing organizational growth opportunities. SWOT is an acronym for an organization’s internal strengths and weaknesses and external opportunities and threats.

Systematic Innovation

Systematic innovation is innovation resulting from an intentional and organized process to evaluate opportunities to introduce change, based on a definition provided by Peter Drucker. The sources of innovation may be internal or external to the enterprise.

Tactics are a collection of tools, activities and business decisions required to implement a strategy.

Target Market

A target market is a defined segment of the market that is the strategic focus of a business or a marketing plan. Normally the members of this segment possess common characteristics and a relative high propensity to purchase a particular product or service. 

Because of this, the member of this segment represent the greatest potential for sales volume and frequency. The target market is often defined in terms of geographic, demographic, and psychographic characteristics.

Target Marketing

Target marketing is the process of marketing to a specific market segment or multiple segments. Differentiated target marketing occurs when an organization simultaneously pursues several different market segments, usually with a different strategy for each. 

Concentrated target marketing occurs when a single market segment is pursued.

Tax Rate Percent

Tax rate percent is an assumed percentage applied against pre-tax income to determine taxes.

Taxes Incurred

Taxes incurred are taxes that are owed but not yet paid.

Telemarketing

Telemarketing is a form of direct marketing that uses the telephone to reach potential customers.

Trade Margin

Trade margin is the difference between unit sales price and unit cost and each level of a marketing channel usually expressed in percentage terms.

Trading Down

Trading down is the process of reducing the number of features or quality of an offering to realize a lower purchase price.

Trading up is the practice of improving an offering by adding new features and higher quality materials or adding products or services to increase the purchase price.

In broad, general terms, traffic is the number of visitors and visits a website receives.

Types of Entrepreneurs

Entrepreneurs may be categorized into eleven areas, including:

  • Solo self-employed individuals
  • Team builders
  • Independent innovators
  • Pattern multipliers
  • Economy of scale exploiters
  • Capital aggregators
  • Buy-sell artists
  • Conglomerates
  • Speculators
  • Apparent value manipulators

User Interface (UI)

User interface is the graphic design and appearance of a website, its function as seen and used by the person on the user end, at the website in a browser.

The UI of a website is ultimately how it lets users know what it has to offer them. If it lacks an easy navigation scheme users get lost, and never find the information on a site.

Unique User Sessions

In online marketing, unique user sessions is a website metric tracking the number of uniquely identified clients generating requests on the web server (log analysis) or viewing pages (page tagging). A visitor can make multiple visits.

Unit Variable Cost

Unit variable cost is the specific labor and materials associated with a single unit of goods sold. Does not include general overhead.

Units Break-Even

Units break-even refers to the unit sales volume at which the fixed and variable costs are exactly equal to sales. 

The formula is UBE=Fixed_costs/(Unit_Price-Unit_Variable_Cost)

Unpaid Expenses

Unpaid expenses are money owed to vendors for expenses incurred, but not yet paid. In bookkeeping and accounting, this is called accounts payable. A simple example would be the advertising expense from advertising that has already run but not yet been paid for by the advertiser.

User Benefits

User benefits refer to understanding and appreciating the base reason an individual purchases a product or service that may not directly correlate with the feature or function of the good or service. These benefits may be intangible.

User Registrations

In online marketing, user registrations is a conversion value measuring the number of website visitors who voluntarily include themselves in your database in order to access the content you provide on your website.

Used as a noun, valuation is what a business is worth, as in, “this company’s valuation is $10 million.”

This would mean that a company is valued at $10 million, or worth $10 million. The term is used most often for discussions of sale or purchase of a company; it’s valuation is the price of a share times the number of shares outstanding, and the price of a share is the total valuation divided by the number of shares outstanding.

Value is the ratio of perceived benefits compared to price for a product or service.

Variable Cost

Variable costs are costs that fluctuate in direct proportion to the volume of units produced. The best and most obvious example are physical costs of goods sold, direct costs, such as materials, products purchased for resale, production costs and overhead, etc.

The concept of variable cost is an important component of risk in a company. Generally, variable costs are less risky than fixed costs, because variable costs are not incurred unless there are sales and production. See also break-even analysis, fixed costs, and contribution.

For more on this, check out What Is Break-Even Analysis?

Variance is a calculation of the difference between plan and actual results, used by analysts to manage and track the impact of planning and budgeting.

Venture Capitalists (VC)

Venture capitalists are thought of in two ways, first, some people think of any wealthy individual who invests in young companies as a venture capitalist. Second, among the more informed investors, analysts, and entrepreneurs, a venture capitalist is a manager of a mainstream venture capital fund.

Venture Capital

Venture capital nowadays is used two ways. First, people often take venture capital as any investment capital obtained through private investment or public investment funds directed to high-risk and high-potential enterprises. 

Second, within the more informed and sophisticated business circles, venture capital is defined more narrowly as investment money coming from the mainstream venture capital firms, a few hundred major firms, different from investment money from other private investors, angels, etc.

A website (or site) is a virtual location, identified and located by a URL (uniform resource locator), an address that can lead you to a file on any connected machine anywhere in the world.

Website Metrics

In online marketing, website metrics metrics are measurement tools used to evaluate how effectively a website is marketing a business.

These can include:

  • Unique user sessions
  • New visitors
  • Return visitors
  • Click-through rate
  • Conversion rate

Website Traffic

In broad, general terms, website traffic is the number of visitors and visits a website receives. This traffic can be measured by a variety of website metrics.

A wholesaler is a channel member that purchases from the producer and supplies to the retailer and primarily performs the function of physical distribution and amassing inventory for rapid delivery.

Working Capital

The accessible resources needed to support the day-to-day operations of an organization.

Working capital is commonly in the form of cash and current (short-term) assets, including accounts receivable, prepaid expenses, accounts payable for goods and services, and current unpaid income taxes.

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

Content Author: Tim Berry

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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IMAGES

  1. Why SWOT Analysis Belongs in Your Business Plan

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  2. 26 Powerful SWOT Analysis Templates & Examples

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  3. 40 Powerful SWOT Analysis Templates & Examples

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  4. 26 Powerful SWOT Analysis Templates & Examples

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  5. How to Create and Use a SWOT Analysis for Small Business

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  6. 3 SWOT Analysis Templates for Efficient Business Planning

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  1. Dealing with the factors you can't control

COMMENTS

  1. SWOT Analysis Explained

    A SWOT analysis is a framework used in a business's strategic planning to evaluate its competitive positioning in the marketplace. The analysis looks at four key characteristics that are...

  2. SWOT Analysis: Examples and Templates [2023] • Asana

    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.

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

    A SWOT analysis is a strategic planning technique that puts your business in perspective using the following lenses: Strengths, Weaknesses, Opportunities, and Threats.

  4. SWOT Analysis: How To With Table and Example

    SWOT analysis is a strategic planning technique that provides assessment tools. Identifying core strengths, weaknesses, opportunities, and threats leads to fact-based analysis, fresh...

  5. SWOT Analysis

    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.

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

    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.

  7. What Is A SWOT Analysis? An Explanation With Examples

    A SWOT analysis is a high-level strategic planning model that helps organizations identify where they're doing well and where they can improve, both from an internal and an external perspective. SWOT is an acronym for "Strengths, Weaknesses, Opportunities, and Threats."

  8. How To Write a SWOT Analysis For a Business Plan

    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: Step #1

  9. SWOT analysis: An easy tool for strategic planning

    SWOT analysis is a framework for identifying and analyzing your organization's strengths and weaknesses, as well as the opportunities and threats you are facing.

  10. How to do a SWOT Analysis in 7 Steps (with Examples & Template)

    Step 6: Draw the SWOT Analysis Table. The final step is crafting a swot analysis table. This involves creating a matrix and dividing it into four sections. The internal factors (strengths and weaknesses) are listed above, with the strengths on the left and the weaknesses on the right. On the other hand, the external factors (opportunities and ...

  11. SWOT Analysis: Definition, Examples, and Step-by-Step Guide

    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 Strengths

  12. How to Do a SWOT Analysis for Better Planning

    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.

  13. SWOT Analysis: Definitions, Example & Templates

    A SWOT analysis is a technique that is used in strategic planning. It helps to identify the strengths, weaknesses, opportunities and threats of a business using a SWOT matrix. SWOT is also called a situational analysis in business planning because it captures the internal and external factors that make up the business environment of a company ...

  14. Using a SWOT analysis to develop core business strategies

    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.

  15. SWOT Analysis: How to Do It + 4 Examples

    As you create a comprehensive action plan around these initiatives, you're essentially harnessing the power of SWOT analysis to guide your strategic decisions. Business strategy. SWOT analysis gives us an in-depth look at what our organization could be doing to position ourselves in a better standing against our competitors.

  16. How to Write a SWOT Analysis (Template and Examples Included)

    Essentially, a SWOT analysis is a comparative list of all your strengths, weaknesses, opportunities, and threats. There's more power in this process than you might think. You may be only hazily aware of your own strengths and weaknesses. However, thoughtfully recording and reflecting on them creates a thorough, conscious familiarity with both ...

  17. SWOT Analysis In Business (With Examples)

    A SWOT analysis is a simple, yet highly effective method for conducting an analysis on a business, product or service. Before you try writing a business or marketing plan, it is highly recommended that you first complete a SWOT analysis.

  18. How To Conduct A SWOT Analysis In Your Business Plan

    A SWOT analysis evaluates your business's Strengths, Weaknesses, Opportunities, and Threats. ... Make a step-by-step action plan to evaluate their importance and mitigate the risk they post for the business. Evaluate the opportunities. Structure a plan that shows how you might take advantage of them, and what might hinder your progress.

  19. Develop your SWOT analysis

    A SWOT analysis is a strategic planning tool used to assess the strengths, weaknesses, opportunities and threats of your business. Developing a SWOT analysis can help you look at your business in a new way and from different directions. It can also help you to: create or fine tune your business strategy

  20. Why You Need a SWOT Analysis for Your Business

    SWOT — which stands for "strengths, weaknesses, opportunities and threats" — is a type of analysis that helps you develop your business strategy by comparing internal factors (strengths and weaknesses) against external factors (opportunities and threats).

  21. SWOT Analysis For New Business Planning

    With SWOT, companies can dive deep into their offerings and figure out the most effective way to plan, position, and execute processes or ideas. The information unlocked through the analysis is essential for all types of new business planning. We plan because starting a business is hectic. It's overwhelming. And incredibly stressful.

  22. 20+ SWOT Analysis Templates, Examples & Best Practices

    A SWOT analysis is a strategic planning technique used to assess the strengths, weaknesses, opportunities and threats of a business, project or any other specific situation.

  23. How to Use SWOT in Business Plans

    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.

  24. The Importance of SWOT Analysis in Your Business Plan

    As you develop your business plan, there are a myriad of considerations that need to be taken into account. One of the most important factors is conducting a SWOT analysis. SWOT analysis is a strategic planning that helps businesses identify their strengths, weaknesses, opportunities, and threats. By conducting a SWOT analysis, businesses can ...

  25. Wells Fargo SWOT Analysis

    A SWOT analysis is a strategic planning tool used to evaluate the Strengths, Weaknesses, Opportunities, and Threats of a business, project, or individual. It involves identifying the internal and external factors that can affect a venture's success or failure and analyzing them to develop a strategic plan.

  26. Plan Your Job and Career With a SWOT Analysis

    Businesses frequently use SWOT analyses to strategize and plan based on an overview of their current strengths, weaknesses, opportunities, and threats (SWOT). Even though the SWOT analysis was ...

  27. Glossary of Business Terms for Small Businesses

    A business plan captures the opportunity see for your company: it describes your product or service and your business model, the target market you'll serve. ... SWOT Analysis. A SWOT analysis is a formal framework of identifying and framing organizational growth opportunities. SWOT is an acronym for an organization's internal strengths and ...