The next step for your business
Most businesses carry out an in-depth analysis – sometimes called a SWOT analysis – every year. We explain how to do it and what comes next.
Where to start: SWOT analysis
SWOT stands for strength, weaknesses, opportunities and threats. A SWOT analysis is an in-depth review of your business, now and going forward.
You should carry out and review your SWOT analysis at least once a year – it will help you to understand what’s going well and what could be improved, and in turn will inform your plan going forward.
What to include in your analysis:
- Sales: what’s selling and what’s not?
- Finances: are your books in order?
- Customers: who are they and are you listening to them?
- Products and services: are they working for you? Could you sell them to new customers or open them up to new markets?
- Suppliers: are you happy with the service they’re providing? Could they change anything or should you consider changing suppliers?
- Marketing: is it working? Are you targeting the right people in the right way?
- Staff: do you have enough people? Are they properly trained and are they in the right position?
From here, you’ll be in a position to plan for the future of your business. We’ve outlined the key considerations, whether you’re planning to grow, expand overseas or improve your company’s efficiency and profits.
Trading abroad takes some preparation, but it can be a rewarding venture. If the possibility of expanding overseas forms part of your SWOT analysis, how should you go about it?
Research your new market
You should have a thorough understanding of the culture, language and local law. With this, you can confidently draw up contracts that work well in that country.
Consider profit margin
Do you make enough to cover the costs of trading overseas?
Look into currency exchange
If you’re thinking of trading in Europe, it’d be wise to create a euro price list. As most countries use the euro, a clear list in this currency will help to avoid customer confusion and any risk associated with exchanging euros for sterling. You should also consider accepting payments in euros – businesses in the Eurozone may find your business more appealing this way.
In countries outside the EU, you’re likely to find the most commonly used currency is the American dollar, which is currently the world’s reserve currency.
Learn about importing and exporting
There may be costs associated with importing and exporting goods – otherwise known as tariffs. A trade tariff is essentially a tax on importing goods to a country, and it can vary from place to place. To find out more about the tariffs that will apply to your company, head to Gov.co.uk’s Trade Tariff page. You should also take a look at our dedicated international business hub.
If your SWOT analysis has led you to the conclusion that you should improve the efficiency of your business, rather than expand it, there are a number of steps you can take.
Taking a closer look at bottom-line revenue can boost your profit margins. This means examining your expenses, such as loan charges, admin costs, marketing and taxes – your bottom-line income is the amount of money you make when these have been deducted from your revenues.
If there’s space for improvement, it could improve your profit margin going forward.
Planning for growth
Planning for growth can mean a number of things, including hiring more staff, securing additional premises or seeking investment.
For a guide on how to approach each of these, see our article in growing your business.
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