Analyzing your business as it progresses is important. If you don’t know what’s working, just that something is working, you can’t capitalize on your business model.
A specific fitness product in your CrossFit gym might be more valuable than any other product, but you just don’t know it.
This is where a SWOT analysis comes into play. We’ll go over what it is, how it can be used to project, predict, and protect your business, and where you stand to gain the most amount of money from executing one properly.
Let’s take a look.
What is a SWOT Analysis?
A SWOT analysis stands for strengths, weaknesses, opportunities, and threats. It’s a system designed to help you assess your business honestly instead of just looking at all the ways that something could go right.
Using a SWOT analysis helps you with every stage of planning and operation; it can be used in just about every circumstance.
In short, it helps you analyze and identify the best parts of your business so that you can capitalize on them, and the weakest parts of your business so that you can strengthen them.
This analysis isn’t an all-or-nothing system: if you realize there’s a weak part of your business that’s bringing the rest of it down, you can remove it. A SWOT analysis is one of the most effective ways to run a business.
What Makes SWOT Superior to Other Analysis Systems?
Any good system should be a useful and widely applicable tool, which is what SWOT is all about.
Most other systems rely on specific industries, and while that can be helpful for every niche, misunderstood businesses, SWOT applies a known-to-work methodology to every level of most businesses.
Simply put, you can apply it to almost any industry and wind up with a better business than when you began the SWOT analysis in the first place.
SWOT is a simple, effective, and short system that doesn’t require specific terminology to understand, and that’s what makes it so popular (and useful).
SWOT Analysis Breakdown
Now, let’s break down each working part, what they mean, and how you can implement it into your own gym as soon as possible. We have to go piece by piece.
Outlining your strengths lets you know what you’re already doing well. This should be data-driven and not emotion-based. If you know a certain aspect of your gym is bringing in money, like classes, you can dig deeper.
How much money is it bringing in? Are classes always booked and packed? How would you evaluate your instructors?
If it all works well, it’s a strength. Now it’s time to capitalize on your strengths. A common theme in marketing and entrepreneurship is to find the channel that works, and hyperfixate on it. Improve it. Your strengths are what you should play to, and hopefully, they don’t interact with your weaknesses as we’re about to discuss in a moment.
While analyzing your company strengths, remember it’s not always tied strictly to profits. It could be a new product that’s working well, but you lack marketing. Marketing could be the weakness. Search for your strengths with a grain of salt and make sure you aren’t shooting yourself in the foot or leaving money on the table when you do.
Weaknesses, as anyone would assume, are the weak points in your business. This is something you might not know about until you begin your SWOT analysis, but it’s extremely important to handle these.
Your weaknesses and threats to your business are not the same thing. Weaknesses are internal, while threats are generally external. When you assess your gym’s weaknesses, you have to understand that you are not talking down to your business model.
Sometimes we can get so wrapped up in including a specific feature or focusing on a certain task that we don’t realize other areas of our gym/service have gotten away from us. Sometimes the weakness is putting your attention into too many different things instead of into one at a time.
One of the best ways to analyze a weakness is to first ask yourself if the weakness has been caused by your efforts, or if it has been developed naturally over time, exposing a weak point in your business model.
If you are including something in gym memberships or in the gym itself that nobody wants, and it’s taking up space or making the place look like a ghost town, that would be a weakness. Surveying gym members is an extremely effective way to pinpoint weaknesses and plug them up.
Opportunities are where we begin to explore external aspects of the business. An opportunity is something within the external environment that grants possibilities for improved profits, an “upgrade” to your business, and strategies for better conversions and sign-ups to your gym.
It’s unlikely that these will present themselves so willfully; you’ll have to be on the lookout for these.
Local developments, apartment complex construction, increasing city population, higher cost of living, etc., can all be opportunities.
- Local Developments: Will more people be spending time near your gym because of a new restaurant, mall, or recreation center? That’s the perfect opportunity to tap into another market and increase your monthly profits.
- Apartment Complexes: New apartment buildings are opening up, and that means dozens of families you can market to. What about introducing a family plan? One full membership payment for the adult, and a half-payment membership per child up to two. Appeal to their budgets.
- Increasing Population: If your city is expecting thousands of new residents per year, it’s time to look at the size of your gym and see if you can expand. If you’re marketing your gym regularly (as you should be), an increased population could absolutely lead to an increased number of memberships.
- Cost of Living Increase: This is generally seen as a bad thing, but if this increases alongside the median household income, it means you can raise rates. Even if it’s a one-time 10% hike, it can lead to better profits instantly.
Last but not least, we have threats: the least fun thing to talk about. A lot of business owners avoid threats, and it always costs them dearly. This damages your business brand, profits, and reputation. It’s never a good thing.
So what do you do? You identify competitors, their offers, new gyms opening up, and anything that could threaten your business.
If a nearby gym is offering a sign-on bonus (usually in the form of X free months for their new members), make and market an offer that’s similar or better, as long as it doesn’t kill your profits.
Nearby construction making it difficult for people to get to you? Offer something that will make them come in anyway. Is that construction noisy and disruptive? Install soundproofing inside your gym.
Most threats won’t be so linear, and you may have to really sit down and think-tank your way into a solution. It’s either that, or let threats damage your business, and we both know which one you’d prefer.
How to Make a SWOT Analysis
Start by finding out the objective of your analysis. What is it that you want to change?
What’s the perceived problem in your business right now? You have to be able to answer these questions before you can even begin.
Next comes research. Understand your competitors, your target market, and a multitude of buyer personas that you may run into while fleshing out your business plan. It’s difficult to make a SWOT analysis when you don’t know who’s problem it’s going to solve. You don’t want to waste time and energy fixing something that isn’t broken in the first place.
Now it’s time to list your strengths, as the fundamental building block of what your business is doing well, what it continually improves upon, and how you can scale your business even further. Your strengths are important because we do not want to solely focus on negative attributes with a SWOT analysis.
To counter listing strengths, now you have to list weaknesses. This step can be upsetting and difficult to formulate, so you may want to ask for aid from your employees or anyone else who knows the business intimately. An outside perspective can help you a lot here.
What opportunities does your business have right now? Write those down as well. Your business can solve a lot of problems for people, so where is it poised to do so? What can your CrossFit affiliate gym do for the community that isn’t currently being done?
Opportunities are often underserved needs or communities; you can do a lot of good, build a large audience, and make a lot of money by seeking out opportunities in unconventional ways.
You’re getting close to the end, but now you have to list the threats to your business. This is where you identify what other businesses are doing better than yours, and what threats can be caused by your weaknesses. This helps you plug up the leaks and fortify your business so that it doesn’t falter while you continue to build it.
You’ve done your analysis, now you have to establish priorities from everything you’ve learned. Establish them in descending order, beginning with the most imperative at the time. Your business weakness and threat could be undereducated coaches, it could be funding, whatever it is, make an action plan to tackle the biggest problem first.
Keep in mind that while you’re writing all of this down, you don’t have to construct your SWOT analysis or action plan in the same way that you see all these SWOT infographics doing. As long as it’s concise and linear, that’s all you need.
Examples of a SWOT Analysis
If a grocery store wanted to use a SWOT analysis to understand how the new weekly farmer’s market that just opened up around the block affects their business, it would look something like this.
Our strength is that we’re air conditioned, have safe food, more options than anyone else, and our customer service is excellent.
Our weakness is that we’re far from public transportation, don’t offer organic produce, and it’s difficult to connect with our customers the way they can at a farmer’s market.
The opportunity here is to create a more organic-friendly section near the front of the store and put up some marketing to show everyone that we can offer what the competition can.
The threat to our business is a non-corporate entity that connects with the values of the individual buyer. They identify with the buyer values more.
In order to combat this, our analysis finds that we need to offer more to our customers, give a personalized experience, and produce marketing materials that resonate with their core values.
This is obviously outside the realm of fitness, but it’s a good example of how an analysis helps to change the focus of the business, or at least provide the business with a clear scope of who the competitors are and what they’re doing.
You can’t appeal to everyone, but if you can analyze that a direct and imminent threat to your business is looming, you can combat it.
Execute Your Own
Breaking down your SWOT analysis and understanding how it applies to your specific CrossFit gym is extremely important no matter how you look at it.
This model is used by CrossFit, and has been proven to be extremely helpful in preventing issues with your gym and business, while also improving it as time goes on.
It’s important to not let the T in SWOT, which stands for threats, completely shake your foundation.
If you apply CrossFit’s core values and additional materials to your business, threats to your business can be taken seriously without disrupting or dismantling your entire operation. Be sure that you apply your SWOT analysis properly.