After reviewing your financial statements, it’s important to put all of that information together to give yourself a holistic view of where your business is now.
One effective exercise to assess this is a SWOT analysis. If you haven’t come across this before, SWOT stands for Strengths, Weaknesses, Opportunities and Threats. The exercise requires you to reflect on your business’s internal strengths and weaknesses, as well as external opportunities you can take advantage of, and threats you need to protect yourself against.
Once you have completed your SWOT analysis, you will have brought to the front of your mind some really important issues for your business, some good and some not so good. The truth is, they are all good to get out in the open so you can do something about them.
So, what do you do?
For each of the quadrants, you need to consider how you can use that information to your benefit:
– What opportunities can you take advantage of? How can you use your strengths to take advantage of these opportunities?
– Which of the threats can you address today, using your existing strengths?
– How can you minimise your weaknesses? Are there opportunities you can leverage to do this?
– How can you avoid or insure against the threats you listed?
Knowing your strengths is great, taking advantage of them is something else. Knowing your weaknesses is also great, doing something about them is really something else. This analysis shows you how, and gives you the first steps to move closer to your big vision.
The bottom line? Building a strong financial strategy will help your business get to where it needs to be.
Tony Dimitriadis B.Bus CPA Director
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