The ancient key to business survival14th November 2018
Back in prehistoric times, early humans learned some very important rules about survival.
For example, we learned that if you don’t know your own strengths and weaknesses, you’re more likely to end up getting into situations you can’t quite handle.
(So you think you’re a pretty fast runner, but it turns out you can’t outrun a sabre-toothed tiger…)
And we learned that when a good opportunity presents itself - like a chance to eat, or to trade - you’d be wise to take it, because there may not be another one along for a while.
And finally, we learned to identify the threats around us, and weigh them against our opportunities.
If your opportunity to eat involves hunting down an enormous wild animal who could easily overpower you, you better think hard about whether you want to risk becoming his dinner…. Rather than the other way round.
Fast forward to now and we’re still using the same basic principles of survival to navigate modern life…
….And to succeed in the most brutal environment of them all, business.
Here, too, you need a deep understanding of the environment in which you operate, if you’re going to survive.
You need to know your own strengths and weaknesses to know what challenges to take on.
If you can recognise both threats and opportunities when they come along from the outside, you’ll be more successful.
And you make the best decisions when you learn to look at the whole picture.
There’s a formal way to get this information.
It’s called a SWOT analysis.
You have probably heard of it. It involves writing down your company’s Strengths and Weaknesses, as well as the Opportunities and Threats you face from within your industry, from regulatory changes, and the market.
This exercise really focuses the mind on where your company stands, and what actions you need to take to improve your position.
You can do it at any time.
But if you are busy putting together your next business plan, I strongly suggest you conduct a SWOT analysis right now.
There is no point making financial decisions about your future without a clear-headed analysis of your current position.
That would be a bit like committing to a major investment, without any idea of how much you are really worth….
Or deciding to extend your house without any idea whether the existing foundations are solid.
Most businesses never take the time for this kind of introspection. And they certainly don’t look seriously at what might be coming at them from the outside.
As a result, their business strategies are built on sand.
And often, they end up in financial trouble – investing in the wrong areas, failing to capitalise on their strengths, unable to foresee dangers. Sometimes they don’t survive.
Corporates, on the other hand, run this kind of exercise the whole time because it helps them develop better strategies, manage risk, and ultimately grow faster and more smoothly. They have mastered the rules of survival.
As the outsourced finance department, helping you run this kind of analysis is key to our job, because you need clear information about where you stand to make good financial decisions – and ultimately to grow to £5 million, £10 million and beyond.
If you want to operate at that level, just hit ‘reply’ and let’s talk.
Forget ‘surviving’ – we’ll have you thriving in no time.