Free Business Plan Template for Small Businesses (2024) - Shopify
What this free business plan template includes · 1. Executive summary · 2. Company overview · 3. Products or services offered · 4. Market analysis · 5.
SWOT analysis
If you’ve never sat through a business class, you might never have created a <anchor>SWOT analysis</anchor> or financial projections. Templates that offer guidance—in plain language—about how to fill in each section can help you navigate sometimes-daunting business jargon and create a complete and effective plan.
What Is a SWOT Analysis? (+ Free Template) (2023) - Shopify
What Is a SWOT Analysis? (+ Free Template) (2023) - Shopify

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# What Is a SWOT Analysis? (+ Free Template)

A SWOT analysis identifies your company’s Strengths, Weaknesses, Opportunities, and Threats. As you scale, it’s a useful tool for unlocking long-term, sustainable growth. Here’s a step-by-step guide to conducting a SWOT analysis, along with examples and templates.

by [Casandra Campbell](/blog/authors/casandra-campbell)

Apr 15, 2023

![SWOT analysis](https://cdn.shopify.com/s/files/1/0070/7032/files/swot_20analysis.jpg?v=1681778101)

On this page

On this page

- [What is a SWOT analysis?](#1)
- [Understanding SWOT analysis](#2)
- [Why is SWOT analysis important?](#3)
- [Characteristics of SWOT analysis](#4)
- [A good SWOT analysis example](#5)
- [Using your own SWOT analysis](#6)
- [Conduct your SWOT analysis today](#7)

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Running a business is hard work. With so many different things pulling at your attention, it’s easy to get caught up in the minutia at the expense of the big picture.

The only way to make sure your business sticks around for the long haul is to periodically step back and look at things from a broader perspective.

That’s where SWOT analysis—strengths, weaknesses, opportunities, and threats—comes in. A SWOT analysis will push you to look at your ecommerce business’s potential and competitive positioning.

You won’t just examine how your company is performing today, you’ll investigate how it’s going to perform next week, next month, and even next year.

## What is a SWOT analysis?

A SWOT analysis lists the good and bad things about your business, analyzing both internal and external factors. The acronym SWOT stands for: strengths, weaknesses, opportunities, and threats.

## Understanding SWOT analysis

“SWOT analysis” sounds like some kind of scary accounting process—it’s not.

The SWOT framework forces you to think about the future. You know how your business is doing today, but do you know where it will be tomorrow? This process will help you figure it out and—more importantly—create a strategic plan for it.

![swot analysis](https://cdn.shopify.com/s/files/1/0070/7032/files/swot-analysis_4a0190cc-e899-4b11-a141-1093416dad3a.png?v=1681778216)

## Why is SWOT analysis important?

Both large and small businesses should do a SWOT analysis. If you’re [starting a new business](/blog/how-to-start-a-business), a SWOT analysis can help you decide on a [business model](/blog/business-model) and gain competitive advantage.

It will inform your break-even analysis and give a more realistic picture of what you’re signing up for. A SWOT analysis should also be included in a [business plan](/blog/72494917-how-to-write-a-business-plan-lenders-cant-shrug-off) if you need to seek startup financing.

Existing businesses should perform a SWOT analysis annually. Think of it as your annual State of the Business. Having it will allow you to:

- Keep your business running smoothly
- Anticipate problems
- Work on necessary changes or improvements
- Invest in smarter initiatives throughout the year
- Develop new product lines or services
- Facilitate informed decision-making and strategic planning
- Encourage collaboration among team members
- Identify areas for improvement and potential growth opportunities

Basically, an annual SWOT analysis will keep you from losing touch with your business strategy, customers, and industry.

### Limitations

- Subjective nature of the analysis may lead to bias or misinterpretation.
- Focuses primarily on the current state of the organization, limiting its ability to predict future changes.
- Overemphasising certain factors may lead to overlooking others.

## Characteristics of SWOT analysis

In any SWOT analysis, strengths (S) and weaknesses (W) are internal factors, while opportunities (O) and threats (T) are external factors.

### Strengths

Strengths are the positive attributes, resources, and capabilities that a company possesses. These are the factors that give a company a competitive advantage.

To identify your organization’s strengths, ask yourself:

1. What does our company do well?
2. What resources do we have?
3. What advantages do we have over our competitors?

Some examples of strengths include:

1. A skilled and experienced workforce
2. Strong brand recognition
3. Efficient supply chain

### Weaknesses

Weaknesses are the areas where a company is lacking or could improve. These are the factors that may put a company at a competitive disadvantage.

To identify internal weaknesses, ask yourself:

1. What areas could our company improve in?
2. Where are we lacking resources or capabilities?
3. What are our competitors doing better than us?

Some examples of a company’s weaknesses include:

1. Limited market presence
2. Outdated technology
3. Poor customer service

### Opportunities

Opportunities are external factors that a company can capitalize on to grow or improve its performance. They can result from changes in the market, technology advancements, app modernization, or competitive landscape.

To identify opportunities, ask yourself:

1. What emerging market trends or technologies could benefit our company?
2. Are there any gaps in the market that we could fill?
3. Are there any new markets that we could enter?

Some examples of opportunities include:

1. Expansion into new markets
2. Acquisition of a competitor
3. Adoption of new technology to improve operations

Another effective strategy for identifying opportunities is through a [gap analysis](/enterprise/gap-analysis).

### Threats

Threats are external factors that could negatively impact a company's performance or success. These can include changes in the market, competitive landscape, or regulatory environment.

To identify threats, ask yourself:

1. What external factors could harm our company?
2. Are there any new competitors entering the market?
3. Are there any regulatory changes that could negatively impact our business?

Some examples of threats include:

1. Increased competition
2. Economic downturns
3. Changes in consumer preferences

## A good SWOT analysis example

Here’s a sample SWOT matrix for an online tailored-shirt business. Although many more factors came up during brainstorming, these were deemed to be the most important.

**Strengths**

- Locally made shirts mean faster turnaround on orders
- Many repeat customers who promote the business
- Good search engine rankings drive free traffic

**Weaknesses**

- Pricing on locally made shirts is not competitive
- Higher costs mean fewer fabric options due to inventory costs
- Customers don't like taking their own measurements

**Opportunities**

- Using technology to simplify the measurement process could increase conversions
- Paid advertising channels such as Instagram and TikTok could be effective
- Custom made clothing is currently trending

**Threats**

- Several competitors are currently undercutting prices
- Website is difficult to use on a mobile device even though mobile traffic is increasing
- A strong dollar could drive down international sales

Think about what business strategies you could implement to take advantage of this information. Remember, there are no right or wrong answers here.

**Download our** [**free SWOT analysis template**](https://cdn.shopify.com/s/files/1/0070/7032/files/swot-analysis-template.pdf?v=1588098978) **.**

## Using your own SWOT analysis

As business owners, we’re constantly having to prioritize what gets our attention. Tough decisions about resource allocation are unavoidable.

No matter how successful you become, you’ll always have to pick and choose where to direct your attention.

### Narrow your lists

Start with the lists from your brainstorming session. Now work on narrowing down those lists so they fit on a single page, arranged in a two-by-two matrix. You’ll likely narrow your list based on two considerations: how powerful a factor is and how likely a factor is to happen.

For example, relying on one big client for the bulk of your revenue is a powerful weakness: it leaves you in a vulnerable position—even if you’re pretty sure they’re not going anywhere. Conversely, even if you’re not worried about your rent increasing, you need to plan for an increase if lease negotiations are imminent.

Even after you’ve created your single-page matrix, keep the unabridged lists around for future reference. You’re not going to focus on the rest of the list right now, but being aware of it will ensure you don’t miss any important issues, especially as situations change. What is less important now may become critical in the future, and you need to be aware of that possibility. You can always rearrange your list or come back to an item later.

### Create strategies

For each of the items on your final list, create a strategy to exploit the advantages and opportunities, and to deal with the weaknesses and threats. These initial strategies don’t need to be particularly complex or robust, although you may choose to expand on them later. For now, just create a broad plan of action.

Also, keep in mind that different factors can work together to balance each other out. How can you use your strengths to improve your weaknesses? How can you exploit opportunities to neutralize your threats? Can you leverage your strengths to better take advantage of opportunities? Is there a weakness you need to prioritize in order to prevent a threat?

## Conduct your SWOT analysis today

There’s no doubt that a SWOT analysis isn’t just a nice thing to have. As ecommerce continues to grow, businesses need strategic management tools to understand internal versus external factors, break into new markets, and meet their goals—be they raising brand awareness, driving traffic, or increasing revenue.

Start working on your SWOT analysis to make sure you don’t continue to operate with your eyes closed. An action plan will keep your business on point and put your marketing strategy to better use.

## Read more

- [How To Write the Perfect Business Plan in 9 Steps (2024)](/blog/business-plan-examples)
- [How To Source Products To Sell Online](/blog/product-sourcing-apps)
- [6 Creative Ways to Start a Business With No Money in 2024](/blog/start-business-without-money)
- [The 13 Best Dropshipping Suppliers in 2024](/blog/dropshipping-suppliers)
- [The 4 Most Popular Types of Business & How to Choose One](/blog/business-types)
- [How to Sell Art Online- The Ultimate Guide](/blog/211990409-how-to-sell-art-online)
- [The Most Profitable Digital Products to Sell (and How to Promote Them)](/blog/digital-products)
- [Finding Your Ideal Customer- How to Define and Reach Your Target Audience](/blog/target-audience)
- [10 Common Small Business Mistakes to Avoid](/blog/business-mistakes)
- [Equity Crowdfunding- Is It Right For You?](/blog/equity-crowdfunding)

## SWOT analysis FAQ

### What is SWOT analysis and examples?

SWOT analysis helps identify a company's strengths, weaknesses, opportunities, and threats. SWOT analysis examples include a company assessing its market position or a nonprofit evaluating its programs.

### What are the 5 elements of SWOT analysis?

The five elements of SWOT analysis are internal factors (strengths and weaknesses) and external factors (opportunities, threats, and trends). Trends are sometimes considered as a separate element, providing insights into the broader context.

### How do I use a SWOT analysis?

To use a SWOT analysis, you need to identify and analyze the internal and external environments affecting your organization or project, then use this information to inform decision-making, planning, and resource allocation.

### How do I write a SWOT analysis?

To write a SWOT analysis, create a matrix with four quadrants, labeling them strengths, weaknesses, opportunities, and threats. List relevant factors in each quadrant and use these insights to develop strategies that leverage internal strengths, address weaknesses, capitalize on external opportunities, and mitigate threats.

by [Casandra Campbell](/blog/authors/casandra-campbell)

Last updated Apr 15, 2023

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[How To Start an Ecommerce Business: Guide for 2024](/blog/ecommerce-business-blueprint)

2023-09-01

![What Is Dropshipping and How Does It Work? (2024)](https://cdn.shopify.com/s/files/1/0070/7032/files/shopify_dropshipping_chapter_1.jpg?v=1590420594)

[Guides](/blog/topics/guides)

[What Is Dropshipping and How Does It Work? (2024)](/blog/what-is-dropshipping)

2023-12-05

![An introduction to print on demand and how to get started.](https://cdn.shopify.com/s/files/1/0070/7032/files/what-is-print-on-demand.jpg?v=1598910000)

[Find an Idea](/blog/topics/find-an-idea)

[What Is Print on Demand & How To Start a Business (2024)](/blog/print-on-demand)

2023-11-09

![Placeholder](https://cdn.shopify.com/s/files/1/0070/7032/files/1-build-a-website.jpg?v=1615422396)

[Sell Online](/blog/topics/sell-online)

[How To Create a Website in 9 Steps (2024)](/blog/build-a-website)

2023-09-20

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[Starting Up](/blog/topics/starting-up)

[How To Start an Online Store in 2024 (Step-by-Step Guide)](/blog/start-online-store)

2023-11-23

![sweatshirt and socks from MrBeast merch line](https://cdn.shopify.com/s/files/1/0070/7032/files/make-sell-merch_dd3029b8-46e0-4593-abc4-ea17f12c0c2e.jpg?v=1664569520)

[Find an Idea](/blog/topics/find-an-idea)

[How To Make and Sell Merch Your Fans Will Love (2024)](/blog/make-sell-merch)

2023-12-02

![Illustration of a basket made out of bricks and mortar, showcasing how an ecommerce website builder can help you construct an online store](https://cdn.shopify.com/s/files/1/0070/7032/files/best-ecommerce-website-builder.jpg?v=1615833626)

[Sell Online](/blog/topics/sell-online)

[10 Best Ecommerce Website Builders for Your Online Store (2024)](/blog/best-ecommerce-website-builder)

2023-11-06

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##### Latest from Shopify

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[Source Products](/blog/topics/source-products)

[Is Dropshipping Legal? A Guide to the Legal Risks (2024)](/blog/is-dropshipping-legal)

Sep 12, 2024

[Social Media Optimization](/blog/topics/social-media-optimization)

[26 Instagram Tools You Need For Growing Your Account in 2024](/blog/instagram-tools)

Sep 12, 2024

[Source Products](/blog/topics/source-products)

[How To Find the Best Dropshipping Niches in 2024](/blog/dropshipping-niches)

Sep 11, 2024

[Marketing](/blog/topics/marketing)

[How To Create a Successful Affiliate Program](/blog/53669701-how-to-set-up-an-affiliate-program-for-your-shopify-store)

Sep 11, 2024

[Customer Retention](/blog/topics/customer-retention)

[What Is Customer Care: Importance and Best Practices](/blog/customer-care)

Sep 11, 2024

[Retention](/blog/topics/retention)

[Average Customer Retention Rates by Industry in 2024](/blog/average-customer-retention-rate-by-industry)

Sep 11, 2024

[Guides](/blog/topics/guides)

[How To Sell Furniture Online in 14 Steps (2024)](/blog/sell-furniture-online)

Sep 11, 2024

[Sell Online](/blog/topics/sell-online)

[How To Sell on Instagram + 7 Instagram Shopping Tips for 2024](/blog/how-to-sell-on-instagram)

Sep 11, 2024

[See all](/blog/latest)

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