What Is Needs Assessment? - Definition & Examples

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  • 0:00 What Is A Needs Assessment?
  • 0:26 Steps
  • 2:20 Example
  • 4:42 Lesson Summary
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Lesson Transcript
Shawn Grimsley

Shawn has a masters of public administration, JD, and a BA in political science.

Expert Contributor
Jerry Allison

Jerry holds a Doctor of Business Administration and a Master’s in Mathematics. He has taught business, math, and accounting for over 25 years.

A needs assessment is a tool that can be used in strategic planning. In this lesson, you'll learn what a needs assessment is and its steps. You'll also have a chance to take a short quiz after the lesson.

What Is a Needs Assessment?

A needs assessment is a process used by organizations to determine priorities, make organizational improvements, or allocate resources. It involves determining the needs, or gaps, between where the organization envisions itself in the future and the organization's current state. You then develop a plan of action to address the needs (or closing the gaps) to bring the organization closer to its desired future state.


Let's take a quick look at general steps taken in a needs assessment.

Exploration and identification: During the first phase of the needs assessment, you need to determine what you already know about your organization's needs, whether it be additional resources, new technologies, or market expansion. It's about figuring out where you are and where you want to be. You also need to discover other undisclosed needs that may be hindering you from moving from where you are to where you want to be. You will often rank these needs in order of importance. You will then set the scope of your research. In other words, the needs you are going to focus on.

Data gathering and analysis: At this stage you are collecting the information you need to better understand the gaps (needs) between where you are and where you want to be. Data may be collected from internal company records or externally through market research techniques such as surveys and analysis of secondary data, including statistical data collected by the federal government. After the data is collected, it is organized and analyzed.

Utilization: This is where the data you analyzed is used to create a plan of action and implement it. You will set priorities, evaluate solutions, apply a cost-benefit analysis to determine which solution is best in light of the relative costs and benefits of each, formulate a plan to implement your solution, and then allocate the resources necessary for implementation. Again, the goal is to develop a plan to close the gaps between the organization's desired future state and its current state.

Evaluation: While many organizations will not evaluate the results of their needs assessment, smart organizations do. You will evaluate the results of the action plan against the results: has the action plan placed you closer to where you want to be? Evaluation can help you determine what made an action plan successful or find the errors in your needs assessment. For example, did you miss an important gap, or were the resources you allocated insufficient to close the gap?


Let's look at an example. Imagine that you are the president of an auto manufacturing company. You want to increase your company's market share over the next five years. Unfortunately, the latest marketing data shows that your company actually suffered a slight decrease in market share last quarter. It's time to perform a needs assessment, so you gather your brain trust.

You and your team start with the exploration and identification process. You already know where you want to go and where you are - your market share has decreased and you need to increase it. You focus on identifying the gaps preventing you from achieving your goals. You note that your product line is stale since you haven't rolled out a new model of car in over six years. You also note that your competitors have rolled out new cars. In fact, the recent drop in your sales coincides with the roll out of a new model from your major competitor that competes with your flagship car. You decide to have your marketing department perform market research to determine the best target market for the production of a new model that gives you the best chance of increasing your market share.

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Additional Activities

What is Needs Assessment

Thinking Project

Wilber has a dream of owning a barbershop. Currently, he has nothing, but he wants to be the best barber in his hometown of Smallville. He has decided to discuss this with you and wants your advice on what he needs to do. What questions would you ask him to help with advising him? What equipment will he need to get his business started? Will he need any education to help him? If so, what? Once you advise him on getting his business started, how would you assist him in becoming the best barber in the town? What types of things would he need to this happen?

Group Discussion

Get with a group of which you are a member. This could be a club, a sports team, or even a job. Decide with the group an objective for the next year. What will you need to accomplish this objective? What will the people in the group need to do to arrive at this objective? Is there knowledge anyone in the group would need to accomplish this goal? Are there skills that you or your group members would have to learn? Continue talking about how to get to the objective and then come up with a plan on how to do it.

Discussion Question

Last year Samantha set a goal to provide better customer service to her customers. Since you are friends with Samantha, she has no problem talking to you about her business. How would you evaluate whether she has accomplished her goal? What information would you want to obtain from last year? What information would you want to obtain when the current year is over? How would you compare the information taken from last year and from this year to determine if she met her goal?

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