The word swot means to study assiduously. It is often used as a derogatory term for someone who these days we would call a nerd. It’s a classmate who does all of his or her homework on time and even, for heaven’s sake, does extra because they enjoy it! Swotting is what you do prior to a test or exam.

A S.W.O.T. analysis, however, is a strategic planning method which if you have never used it before will surprise you with its simplicity and effectiveness. It is something you can use to assess your current situation during these pandemic and fast-changing times. It will also help you plan for the future. The acronym stands for Strengths, Weaknesses, Opportunities, and Threats. To carry out a SWOT analysis, create a table with four columns each headed with one of the terms. Then, with your team, business partner(s), investors, or whomever you want to involve, look at each column in turn and create a list of things that apply.

For instance, what are your company’s strengths? Where do you perform well? In what ways are you better than your competition? Do you have excellent parking? Are you well located? Do you offer better guarantees or warranties? Do you offer online shopping? Is your web interface better than competitors? Do you offer quicker delivery? Are your staff friendlier? Are you financially secure – well-financed? You get the idea, list anything you can think of that is an advantage your business has over its competition.

What are your company’s weaknesses? Take the list above and turn it on its head. Where does your competition outperform you? What things would you like to improve on, if you had the resources? Be honest – if not it’s only you who you are cheating.

Once you review your strengths and weaknesses it should help you to recognize opportunities. Things you might promote to your customers, areas of potential growth, and of course things you could do better. Growth and prosperity lie in seizing opportunities. If you read the other article in this newsletter you will also see that understanding what the immediate, or near future might bring can also help you recognize opportunities (think technology, social and cultural change, etc.). Note these down too!

In the final column, you need to look hard at what could threaten your success. Threats can come from weaknesses, but they can also come from positive things like growth. They can come out of left field such as the current pandemic, or from new technology that opens up your market to greater competition (think Amazon, Netflix, and the like). List anything that might threaten your company over the next 12-months. For instance new competition, poor cash flow, equipment breakdowns, obsolete technology, outdated thinking, key staff leaving, etc. Then add things that might potentially affect your business over the next decade. The earlier you identify threats the better.

Once you have your SWOT analysis, refer to it continually as you start to pull your business, or strategic plan together. It will help keep your feet firmly on the ground as you plan the future of your business.