A SWOT is only useful if it ends in decisions. This guide shows how to build the grid, score each item and convert it into actions.
Updated November 2026
What a SWOT analysis is
SWOT stands for strengths, weaknesses, opportunities and threats. Strengths and weaknesses are inside the business: your team, skills, prices, location, reputation. Opportunities and threats are outside it: customer trends, competitors, regulation, the economy. The SBA lists competitive analysis as part of market research, and SWOT is a common way to organize what you find. Our SWOT analysis template for Excel has the grid ready.
Step 1: List factors, one per line
Write each factor as a specific statement, not a word. “Reviews average 4.8 stars” is useful. “Good reputation” is not. Aim for five to eight per quadrant. In the template each factor goes in a table with its quadrant chosen from a drop-down.
Step 2: Ask the right questions
- Strengths: What do customers say we do well? What do we have that rivals lack?
- Weaknesses: Where do we lose jobs or time? What do customers complain about?
- Opportunities: Which customer groups or services are underserved? What has changed in our market?
- Threats: What could competitors, costs or rules do to us?
Step 3: Score each factor
A list alone does not tell you what to do first. Score every factor twice on a 1 to 5 scale: impact (how much it matters) and evidence (how sure you are, based on data or customer feedback). Multiply them:
=D5*E5
A factor with impact 5 and evidence 4 scores 20. One with impact 2 and evidence 3 scores 6. Then label priority with a rule such as =IF(F5>=15,"High",IF(F5>=8,"Medium","Low")). The template uses 15 and 8 as default cutoffs and you can change them.
Step 4: Count and rank
Count factors per quadrant with =COUNTIF(B:B,"Strength"), as explained in Microsoft’s COUNTIF function page. Then pull the top five by score into a summary. That shortlist is what you discuss, not the full list.
Step 5: Turn the grid into actions
Combine quadrants to make strategy:
| Pair | Question |
|---|---|
| SO | How can a strength capture an opportunity? |
| WO | How can an opportunity fix a weakness? |
| ST | How can a strength reduce a threat? |
| WT | How do we avoid the weakness being hit by a threat? |
Each action needs an owner and a date. Without them a SWOT is a poster, not a plan. The template’s action plan sheet tracks days left and flags overdue items. Use the result in your marketing plan.
Example: local repair shop
Strength: same-day repairs (impact 5, evidence 4, score 20). Weakness: no online booking (impact 4, evidence 5, score 20). Opportunity: nearby offices with no repair service (impact 4, evidence 3, score 12). Threat: a chain opening nearby (impact 3, evidence 2, score 6). Actions: add online booking (WO), promote same-day repair to offices (SO). The two scores of 20 come first; the threat of 6 is monitored.
Mistakes to avoid
- Vague factors with no evidence.
- Mixing internal and external. A new competitor is a threat, not a weakness.
- Making it a one-time exercise. Review it every quarter.
- Writing 30 items and acting on none.
Frequently asked questions
What does SWOT stand for?
Strengths, weaknesses, opportunities and threats.
What is the difference between internal and external factors?
Strengths and weaknesses come from inside the business. Opportunities and threats come from outside it.
How do I prioritize SWOT items?
Score impact and evidence from 1 to 5, multiply them and act on the highest scores first.
How often should I update a SWOT analysis?
Review it every quarter or after a major change in your market.