It’s important to put all of that information together to give yourself a holistic view of where your business is now.
You will benefit greatly from reviewing your financial statements, namely, profit and loss statement, balance sheet and statement of cash flow on a regular basis. But what then?
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.
· What do you do well?
· What do you do better than others?
· What unique resources and/or processes do you have?
· What do others in your industry see as your strengths?
· What factors get you a sale?
· What could you improve?
· What should you avoid?
· What does your business lack?
· What do others in your industry see as your weaknesses?
· What factors lose you a sale?
· What opportunities can you see in your industry?
· What interesting trends do you see?
· What can you do that others are not?
· How can you turn your strengths into opportunities?
· What obstacles do you face?
· What are your competitors doing?
· Is regulation threatening you and/or your business?
· Is technology threatening you and/or your business?
· What threats do your weaknesses expose you to?
· Do you have cash flow problems?
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?
For example, if you have identified one of your business weaknesses as lack of labour and equipment and have identified a major growth development in your area as an opportunity, then a strategy for you may be to strengthen your resources to be able to successfully quote, win and undertake the large development project in your area.
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.
If you need assistance with your financial statements and your SWOT analysis, do not hesitate to contact us.
You will see the impact these changes have on your profit margin, your asset turnover and ultimately your return on assets.
Now you’re starting to really see where your business is financially and what you need to do to get you to where you want to be.
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Tony has 33 years’ experience as an accountant, and 13 years’ experience as a CPA. His first 18 years’ experience involved financial, management and operational accounting roles at a senior management level, in the security, transport, and forensic accounting industries
https://adpartners.com.au/wp-content/uploads/2017/08/logo.png00Tony Dimitriadishttps://adpartners.com.au/wp-content/uploads/2017/08/logo.pngTony Dimitriadis2018-03-19 21:34:302019-05-14 17:46:40SWOT Analysis - What does it mean for you?
Established in 2001, AD Partners is a boutique public practice Accountancy and Business Consulting firm situated in heart of Carlton, Melbourne.
We service all areas of Melbourne, and offer personalised service to business owners no matter how big or small.