Questions a Financial SWOT Analysis will Answer for Your Company
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Questions a Financial SWOT Analysis will Answer for Your Company

Questions a Financial SWOT Analysis will Answer for Your Company

How to use a SWOT analysis to benefit your company’s finances. 

A SWOT analysis is an excellent tool to help evaluate your business’s standing and financial situation.

A SWOT analysis is a time-tested tool that businesses use to help them understand how their processes are benefitting them and where they might need to focus their efforts for improvements.

The SWOT (which stands for strengths, weaknesses, opportunities, and threats) matrix helps businesses better understand all the piece that make up their current standing and their potential future paths.

A financial SWOT analysis might ask the following questions:

Strengths

Strengths are examples of things your business does well – the things that help your business grow, expand, and ultimately turn a profit. While these areas do not necessarily need as much attention as areas of weakness within your organization, it’s important to understand the things that make your business strong and make sure that these don’t go completely unattended and lose their powerful influence on your business.

  • What are the products you offer that help drive the most revenue? Do you have top notch customer service or a much higher quality product that your direct competitors?
  • Do you have an expert leadership team that guides your business?
  • Do you have a lot of liquidity, low debt, or strong revenue streams?
  • Have you recently invested in technology that enhances your product line or placement opportunities?

Weaknesses

Weaknesses are the areas of your business that need work. Openly assessing your business means that you will undoubtedly find some areas that are not as strong as others, giving you a place to focus some of your efforts in an attempt to strengthen your business. Weaknesses are usually things from within the business that create uncertainty.

  • Has your business made any low-paying or unpaid investments?
  • Is one or more of your product lines struggling?
  • Do you have a low ROI on marketing?
  • Does your staff have a lot of turnover?
  • Are you paying excessive amounts of overtime?
An example of SWOT from Mahindra Group via
Wasim Akram on Slideshare

Opportunities

Opportunities are areas that you identify as ways to grow your business – these can be developed out of increasing areas you’ve identified strengths, fortifying areas that you’ve addressed weaknesses, or from identifying a completely new way to reach customers, via a new product, service, or other opportunity.

  • Have you established areas that you could successfully grow?
  • Are there businesses that you could partner with to grow your brand awareness or product distribution channels?

Threats

Threats are the thing that pose a danger to your business – it could be a competitor with an emerging product that threatens your product line or any other risk from outside of your business.

  • Do your competitors have a larger market share? More successful marketing campaigns? Bigger brand awareness?
  • Are there business producing similar products at lower costs? Offering better customer service?

The SWOT model of financial reporting and analysis can help your business decide what your goals are and what your business objectives need to be. It can help ensure that you have as strong a financial position as you currently can, and also help you address the ways that you can improve it over time. It’s an honest and holistic way of understanding your business’s place in your industry and establishing areas of improvement for a great competitive edge.

What are the benefits of a SWOT analysis?

A financial SWOT analysis can help you understand the financial situation and circumstances of your business, allowing you to make informed decisions that can help your bottom line. By understanding what your business does well, as well as where the limitations are, you can identify what the next steps need to be.

While the SWOT analysis might not be able to help your organization prioritize your business needs, it’s an excellent first step to helping understand how you need to move forward.

Marianne Chrisos
Marianne Chrisos
Born in Salem, Massachusetts, growing up outside of Chicago, Illinois, and currently living near Dallas, Texas, Marianne is a content writer as a company near Dallas and contributing writer around the internet. She earned her master's degree in Writing and Publishing from DePaul University in Chicago and has worked in publishing, advertising, digital marketing, and content strategy.
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