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A “gap” in your business means you are not doing something right, or doing it at all. A gap analysis helps identify these gaps so you can develop a strategy to fill the gaps and improve your business operations. In other words, the gap analysis takes stock of your current situation, notes where you want to be, and develops a plan of attack. In this guide, we’ll provide you with a gap analysis template to help you support your business growth.
Varies by state and package
Varies by state and package
Varies by state and package
The four steps of a gap analysis
When performing a gap analysis, there is a simple four-step process that you can use to define action items that will help you narrow or eliminate your gaps. Each business will have different things to focus on in a gap analysis. In fact, you can use different metrics for different departments when doing your own gap analysis.
The four steps of a gap analysis are:
- Identify the current situation. Define what is important to you in your department or organization. A sales team can focus on lead generation and conversion rates, while the accounting department can focus on efficiency and accuracy. The metrics you use will be most important to the success of your business or service.
- Set SMART goals for where you want to be. SMART goals are specific, measurable, achievable, relevant and urgent. Being specific narrows down exactly what you want to achieve and removes any ambiguity. You want tasks to be measurable so you can see growth towards the goal. While goals need to be lofty, they need to be achievable, otherwise you might see a lack of motivation and frustration creep up in morale. Relevant goals help you meet overall business goals while being urgent, give you a deadline to measure progress and assess success.
- Analyze the gaps between where you are and where you want to be. Now is the time to assess the gaps and get to the root of the problem. This involves explaining in detail why you are not having as much success as you would like. The why could be a hiring problem, a training problem, a resource problem or something else. This is where you dig to find out.
- Establish a plan to address existing gaps. What must happen to get you to your goals? Develop actions that help you bridge the gap between where you are and where you want to be.
Here is a template to guide you in your gap analysis:
Download a free template
Benefits of effective gap analysis
An effective gap analysis is a good way to assess your business. It can help set goals and see where you are in the process of reaching them. When done right, gap analysis not only goes beyond just measuring the success of goals, but it also takes into account any barriers that exist or what might go wrong in your system that is preventing a successful outcome. greatest success.
Examples of use cases
A gap analysis can be used for just about any business scenario where you can measure performance. Let’s take a look at a few examples to better understand how to perform a gap analysis.
Example 1: Increase real estate sales
John is a real estate agent who wants to increase his sales. By performing a gap analysis, John begins by assessing his current annual sales, which are $ 1 million in real estate sales. He wants to increase his sales by 20% this year, which is a SMART goal of $ 1.2 million in real estate sales.
Asking him why he isn’t selling more, John realizes that he doesn’t have enough conversations with buyers and needs to expose himself to more people in the housing market. To compensate for this deficit, he agrees to join two new networking groups that meet monthly. In doing so, John is able to talk to more people and expand his network of potential buyers, creating a solid game plan for success.
Example 2: Improve office efficiency
Jessica runs an income tax office and finds that her staff are not very efficient at doing every return, which takes a toll on the bottom line. The average time of its staff to complete a tax return is 55 minutes. She compares this to other tax filing offices where their average time is 35 minutes per return. It sets itself the SMART objective of reducing the preparation time of the tax return.
Once she knows the goal with a 20-minute gap per return, she begins to wonder why her staff are taking so long as other offices. She realizes that they don’t use all of the software tools at their disposal that make every filing faster. Jessica decides to put in place a training program that will teach her staff how to use the resources at their disposal to shorten the preparation time for each return.
When to use gap analysis
A gap analysis can be used in almost any stage of the business where you want to see improvement happen. The more data points you have, the easier it is to create a gap analysis, but even new businesses without data can start from scratch, set goals, and develop a plan to move the business forward.
When to use an alternative
When there isn’t a lot of data available to determine a true gap, you can focus on one aspect of gap analysis: setting SMART goals. It gives your team tangible things to focus on. By doing this, you can move on to a gap analysis when the SMART goal deadline has expired. You can also use a SWOT analysis to identify the strengths, weaknesses, opportunities and threats of your business strategy.
Frequently Asked Questions
What are the four types of gap analysis?
A gap analysis can be performed on:
- Performance gap: takes into account the difference in performance
- Market gap: assess sales figures
- Profit gap: designed to achieve target benefits
- Lack of staff : assesses whether you need more working hours dedicated to the task
What are the components of a skills gap analysis?
Every job has a set of responsibilities necessary to do the job properly. In the Skill Gap Analysis, you will examine these responsibilities, determine the skill level required for each task, and consider the skill of each employee to accomplish them.