Using a SWOT Analysis to Improve Your Company’s Financial Health
An organization’s financial health is essentially determined by analyzing the budget that is available to support the investment of people(employees), promotion (marketing), and production(sales). Through strategic planning, business owners are able to make informed decisions on how much to spend and what areas it needs to spend in. When effective decisions are made, the organization in turn is about to flourish financially.
Business owners who routinely identify the company’s financial strengths, weaknesses, opportunities and threats as it pertains to their industry can essentially help them save money, or even determine when they might need a little financial assistance.
When it comes to completing a SWOT analysis of your staff there is essentially no better resource than your human resources department. They are able to inform you of the staff productivity and function and assist you in coming up with cost effective ways to improve areas of weakness. Whether that means streamlining training expenses or investing in new software to improve daily business processes it will ultimately improve the overall financial health of your company.
When conducting a SWOT analysis with your human resources department it is imperative to keep an open mind. You may find that your staff has more weaknesses than you imagined. This might include things like your top employees nearing retirement and as such will be requiring a payout soon; there may be several staff members that require more training to improve their work ethic; or you might find that you need to start hiring new staff altogether. Threats might include changes to workplace safety regulations requiring improvements in the workplace that will cost. Keeping an open mind and coming up with financially feasible ways to handle the matter will take time and the input of members from your human resources department.
Marketing is a pivotal part of your organization’s financial success. Developing a reputation for your brand requires strong marketing strategies. An in depth analysis of your organization’s distribution network, customer service, and market share can help you to determine financial associations such as pricing, purchasing, or partnering opportunities which can lead to improved company revenue. Assessing the weaknesses in your products or services as it pertains to their overall quality and promotional efforts can also assist business owners in making more informed marketing decisions going forward that will also improve revenue.
No matter how well your employees work, how well known you are to your target audience, or how good your products or services are, if they’re not selling as they should this can create serious financial troubles down the line. A routine SWOT analysis of company sales can give great insight. Obviously a successful sales team is going to make a business money. Evaluating where the weaknesses might lie within the sales department can help to increase profits. Solutions such as a need for improved sales training, new systems for generating leads, or improved customer relationships, can close the gap between you and other companies within the industry.
Production is also an important component to your organization’s financial health and as such need to be analyzed on occasion. Collecting an inventory of raw materials for instance can essentially give way to solutions on how to more effectively control costs. Lower amounts of raw materials or products may indicate a need to order in larger batches which can in turn save money on production costs. High amounts of products in inventory on the other hand might warrant a need to slow production and improve sales.
Getting Financial Assistance
After conducting a SWOT analysis in each of these areas you can essentially determine how well you’re doing financially and where you need to improve. If you find that you need a lot more improvements to increase profits there are several options for funding you might consider. Some of those include:
- Bank loans – This funding option is great for business owners who have established credit. Those interested in borrowing a high amount of cash and repaying it over the course of time.
- Short Term Loans – For business owners with bad credit, looking for alternative funding solutions may be beneficial. Companies such as MaxLend Loans allows business owners (with no established company credit) to take out a short term loan to be paid back in a small time frame. Be sure to only purchase from a reputable vendor by reviewing their social media accounts, such as this Twitter page for Max Lend.
- Crowdfunding – For those who wish to get funding for their business without the need to involve their credit history or repay interests costs, crowdfunding might be a great option. Receiving funds from varying sources without the promise to repay is an option that is becoming increasingly popular for businesses of all sizes.
Conducting a SWOT analysis on your company finances in the above mentioned areas is important. It helps to keep business owners and managers on the same page as it pertains to the financial aspects of running a business. By learning areas of strength and weaknesses, businesses can make informed decisions as it relates to improving revenue and the overall success of the company. It may unfold truths that may come as a surprise in some ways but with the right plan and proper financial decisions, bouncing back from obstacles and pitfalls is fairly simplistic.
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