Why You Should Have Conducted a SWOT Analysis for Your Business by Now

Why You Should Have Conducted a SWOT Analysis for Your Business by Now

A SWOT analysis is a business analysis procedure conducted to make sure there are clearly defined goals for any project and that any factors related to the said project are identified properly. Performing a SWOT analysis of your small to medium business does not take too much of your time and it helps you to think outside of the box when it comes to your business. A SWOT analysis also helps you come up with an effective strategy for your business by ensuring you have put all your business’ weaknesses and strengths into consideration not to mention the threats it faces in the market and the opportunities available. It is almost a business rescue depending on what you do with the results obtained.

SWOT is an acronym for Strengths, Weaknesses, Opportunities, and Threats. The business’ strengths and its weaknesses are internal i.e. location, patents, or reputation meaning they are within the company and you will need to work on them actively to change them with time. Your opportunities and strengths are essentially external and they could be prices, competitors, or suppliers. They happen outside of the company and you cannot change them.

Businesses can exploit a SWOT analysis any time to analyze a changing environment so they can respond accordingly. A strategy review meeting is recommended for businesses at least once every year beginning with a SWOT analysis. A SWOT analysis is also recommended for new businesses during the planning process because approaching a new business in accordance to its unique SWOTs may put you on the right path from the beginning saving you a lot of trouble as you proceed.

Conducting a SWOT Analysis

For the most objective and complete results, it is best to conduct the analysis using a group of individuals with varying stakes and perspectives in the company. Customers, customer service, sales, and management can all bring valuable insight. The process of a SWOT analysis is also a chance for your team to come together while encouraging participation in accordance with your company’s strategy. Usually, a SWOT analysis is done using a four-square SWOT template but lists works equally as well. The best method to use is the one that allows you to organize the results and understand them easily.

You can brainstorm with your team to determine the factors present in all four sections of the analysis or ask your team members to complete a SWOT analysis template individually after which you can meet for discussion and compilation of the results. Bullets points might be the best way to start as opposed to elaborating each point first. Ensure you capture any important aspects according to you in all four areas. After the brainstorming session, you can generate the final version of the SWOT analysis in all its prioritized glory. The factors in each category can be listed from the highest in priority to the lowest in priority.

The SWOT results can be used to come up with short and long-term strategies for the business by maximizing the positive influences and diminishing the negative influences in your business.

Financial Modeling | An Inside Look

Financial Modeling | An Inside Look

An Inside Look at Financial Modeling for Businesses

Financial modelling is an instrument that can be utilized to predict the picture of a financial or security instrument or the financial performance of a company depending on the entity’s historical performance. In financial modelling, financial models are prepared that are specific to a company for use in decision-making and performance of financial business analysis. Essentially, it is merely the construction of a financial representation of aspects of given security of the firm. It is also a mathematical model of various elements of a company’s financial health. The financial model can be compiled on paper or in excel allowing ease of analysis of the influence of various assumptions or the alteration in the value of different variables thus ensuring increased flexibility.

  • Financial modelling can be considered as a mirror indicating:
  • Whether an organization needs additional funds in form of equity or debt
  • Comparative analysis (which companies to invest in for better returns)
  • Determining whether a company had a shift in direction in terms of expansion, loss of customers, or other situations
  • Valuation and analysis of FPOs, IPOs, and Firms
  • The business’ reaction to various market conditions or financial situations
  • Assessment and identification of risk levels
  • Determining strategies and business plans by identifying the business’ weaknesses and strengths

An effective financial model should evaluate risks, communicate assumptions and conclusions clearly, focus on the primary cash flow drivers, and be comparably simple.

The working in financial modelling should be desirably free from errors and easy to understand and read for purposes of auditing. In order for a financial model to be reliable, easy to check, and easy to navigate, it should follow the following principles.

  • Versions of documents should be kept in the event that future upgrades occur
  • There should be a written executive summary on top if it is required
  • Page breaks should be used if need be
  • The correct number of sheets should be maintained
  • The firm’s standard format should be followed for the most accessible results

Building a Financial Model

Financial modelling typically involves making assumptions concerning the future performance of a business and it is one of the most important and subjective elements of company valuation.

Various approaches to forecasting in financial modelling include:

  • Versions of documents should be kept in the event that future upgrades occur
  • There should be a written executive summary on top if it is required
  • Page breaks should be used if need be
  • The correct number of sheets should be maintained
  • The firm’s standard format should be followed for the most accessible results