SWOT Analysis: Definition, Template, How-To, & Examples

A SWOT analysis is like a scouting report for your business. It tells you what challenges your company faces and how you might stand out from your competitors.

Most business owners start with a SWOT analysis when making high-impact decisions. It’s versatile and can be applied to several business scenarios, like launching a product or creating a marketing campaign.

In this post, we’ll explain everything you need to know about SWOT analyses – including what they are, why you need one, and how to complete one for your small business. We’ll also wrap up with a few examples of SWOT analyses that we created for small business owners.

What is a SWOT analysis?

A SWOT analysis is an audit of your business’s strengths and weaknesses. It assesses what your company does well, what it doesn’t do well, and what opportunities there are to improve it. It also highlights any potential threats that may jeopardize the success of your project or campaign.

Why should you conduct a SWOT analysis?

A SWOT analysis is an effective research tool for starting a business, launching a new product, creating a marketing campaign, and completing several other tasks that small business owners must complete. It provides an easy-to-read framework that lays out where your business stands in a given market. Business owners use this information to make sound decisions that benefit their organizations over time.

If you don’t have a template, copy ours below. It’s simple, straightforward, and — best of all — free.

SWOT Analysis Template

Here is a SWOT analysis template that you can use for your small business. We’ll walk through how to complete it in the next section.

Strengths	Weaknesses
Opportunities	Threats

How to Do a SWOT Analysis

If this is your first SWOT analysis, the steps below will help you complete this template. We recommend starting with your strengths and moving on to your weaknesses from there.

1. Determine your goal.

Before doing anything, you should establish a goal for your SWOT analysis. This report has many use cases, so you’ll want to narrow down precisely what you hope to learn. If you don’t set a clear and specific goal, you’ll waste time going down rabbit holes that don’t provide the information you need.

We recommend the SMART model when developing business goals — and we promise that’s the last acronym we’ll use in this post.

SMART stands for Specific, Measurable, Achievable, Relevant, and Time-bound. These goals should be specific and describe the final product you aim to deliver. When we say “measurable,” that means a benchmark, metric, or key performance indicator (KPI) should represent what success looks like for a goal. They should also be achievable, realistic, and relevant to your organization. And, finally, they should be time-bound, so that they’re completed by a specific deadline.

2. Gather resources and information.

Once you have your goal, you can gather the information needed for your SWOT analysis. For example, if I were starting a new business, I would research the demographics of my potential customers. I would also look at competitors in my industry and study what they are doing well, and where they are under-delivering.

Pro Tip: Gather a lot of information on your competitors. You might not use all of it, but it’s a great place to start your SWOT analysis.

3. Start with your strengths.

Strengths are fun. You get to boast about all the things your company does well. It’s important to be confident here, but don’t exaggerate. The key is to provide an honest look into what your business has to offer.

Here are a few questions that you might answer in this section:

Strengths What does your business have that others don’t? What are your strongest assets? What are your best products & services?	Weaknesses
Opportunities	Threats

4. Be honest about your weaknesses.

The same goes for weaknesses. If you leave this space blank or downplay your weak points, it will be much more challenging to identify the most lucrative opportunities for your business. You might find one or two small things to improve, but the biggest roadblocks will continue to create problems for your company. A SWOT analysis helps you prioritize which weaknesses your business should overcome first.

Remember, a SWOT analysis is a private document. It’s just for you, and no one else has to see it. It’s better to be honest here so you can extract actionable and effective insights from your research.

Here are a few more questions that you might answer at this point:

Strengths       .	Weaknesses What do other businesses have that you don’t? What products & services don’t sell well? Where are your competitors beating you? Where are you missing resources?
Opportunities	Threats

5. Leverage your strengths and weaknesses for opportunities.

Do you double down on your strengths? Or, do you improve your weaknesses?

Trick question – you’re an entrepreneur, so you can do both.

The last two sections—strengths and weaknesses—are excellent sources of inspiration for your opportunities section. Look for areas where you are performing well, and see if you can maximize their output. You should also review what might not be going well and see if you can minimize that impact on your business.

Here are a few questions to answer for this section:

Strengths	Weaknesses
Opportunities What are successful strategies that I am not using (but could be), that other businesses are using? Are there new markets that I can target? How can I be more like the top competitors in my industry?	Threats

6. Don’t shy away from threats.

Threats are the least fun, so we’ve saved them for last. Threats are things that might go wrong when trying to achieve your goals. It’s important to plan for these scenarios and prepare contingency plans in case they occur.

Here are some questions you might answer at this point:

Strengths	Weaknesses
Opportunities   .	Threats What might prevent me from achieving my goals? How is my industry changing? What are the new trends? What external factors might affect my supply chain?

Before we wrap up, let’s review a few examples of what a SWOT analysis could look like. We’ve prepared some examples in the section below.

SWOT Analysis Examples

Here are three examples of SWOT analyses for small businesses. We used the template above, as well as some data from Thryv’s Small Business Index to complete each one.

Example 1: New Landscaping Business

In this example, we created a SWOT analysis for launching a landscaping business. For our strengths, we leaned on our experience and premium services like irrigation installation. For weaknesses, we said we were new to managing a business and didn’t have a reputation in this market.

We also researched our local competitors and found that most weren’t using business technology. Since 72% of business owners believe technology gives them an advantage in day-to-day operations, we saw this as a huge opportunity for our business.

Finally, some threats we listed were seasonal demand, labor shortages, and local regulations limiting how much water a property can use for irrigation.

Example 2: Marketing Campaign for Plumbing Services

Here we created a SWOT analysis for a marketing campaign. Our strengths were our great customer reviews, and our weaknesses were our advertising budget and lack of marketing automation.

Our biggest opportunity is adopting software like a local listing management tool. This technology will help us update our local business listings, so we never have outdated information on Google, Yelp, or other directory sites.

We also found that 86% of small business owners work more than 40 hours a week — more than the World Health Organization recommends. Burnout is a significant threat that could affect our success . We’ll have to budget our time accordingly to ensure that we can prioritize this project, as well as the customer-facing tasks that we have on our plate.

Example 3: Product Launch for Home Services

This SWOT analysis is for a cleaning service trying to get one of its new products into retail stores. Our strength is that we have an excellent product that is cheaper than our competitors’, but our weakness is our distribution network because we don’t have many connections with retailers in our area.

The good news is that most people are unhappy with the cleaning product they are currently using, and a major competitor has just gone out of business. There’s a window of opportunity for a new brand to enter the market and cultivate this audience.

The threat is that this industry is very competitive, and it’s easy for competitors to create similar products. If there is a problem with my supply chain, I could quickly be outpaced by an enterprise business with more resources.

Getting the Most from Your SWOT Analysis

Whether you’re looking to launch your next product or just see where you currently stand in your industry, a SWOT analysis is a handy research tool that can be used in all types of business scenarios. It doesn’t have to be as formal as ours, either. It can just be a bulleted list on your phone’s Notes app that you add to as you find time to get back to it.

Use this report to organize your thoughts and assess your situation before making an important business decision.