Understanding how your business works—and whether it’s overall healthy—is key to making wise decisions as an executive or business owner. But it can be tough to look at all the numbers your business produces and know with 100% certainty where you need to focus your efforts or whether your business is on an upward swing.
Rather than doing painstaking and possibly inaccurate analyses, you might instead use a portfolio analyzer.
Today, let’s break down what this tool is and how enterprises just like yours can benefit from using one for critical business metrics.
What Is a Portfolio Analyzer?
In a nutshell, a portfolio analyzer is a digital tool that takes certain information, like funds or stock positions, and analyzes it using intelligent, agile algorithms to determine:
- Portfolio strength
- Whether certain asset positions are wise
- Whether a portfolio reflects overall financial goals
However, many portfolio analyzer tools can be used with things other than stocks, bonds, ETFs, and similar market instruments. In fact, you can sometimes use a good analyzer to look over business metrics like:
- Purchases by customers
- Overall revenue numbers
- Department performance numbers, and more
For example, Personal Fund is an effective portfolio analyzer tool used by both individual investors and stock market advisors alike. Such tools can potentially be invaluable for business executives who want to make the wisest decisions possible and minimize risk to their brands.
What Can You Use a Portfolio Analyzer For?
Still not convinced this tool is worth the investment or time to learn how to use it? Let’s take a look at a few things you can use a portfolio analyzer for as a business executive or owner.
Analyzing Product Offerings
For starters, you can use this tool to examine and fully understand different product offerings, as well as how those offerings impact your business’s bottom line. For instance, you can use a portfolio analyzer to:
- Determine whether a product is worth the time and money you spend to produce it based on its returns
- Determine whether certain types of products are wise investments for your brand
- Determine whether product popularity is going up or down, and so on
By analyzing your product offerings, you’ll be better equipped to lead your business on a path to long-term success. More importantly, your business will create products that offer long-lasting value to its customers, ensuring solid revenue streams for years to come.
Analyzing Customers and Revenue
You can also use this tool to analyze your customers, their behaviors, and your overall revenue performance. Certain portfolio analyzers can be used to determine:
- Whether you are really gaining more customers or keeping customers
- Whether your customers are changing their behaviors (i.e., they are spending more or less money on average at your business, etc.)
- Whether your revenue is trending up or down, despite what short-term numbers may indicate, and more
This information, of course, is highly important for executives who want to make the right decisions regarding scaling, marketing, and other topics. Once you understand how your business is trending in terms of raw numbers and consumer behaviors, you’ll be better equipped to avoid major mistakes.
Analyzing Business Division Performance
Lastly, these tools can also be used to analyze business division performance. You probably have several departments or divisions working in your company. By using a portfolio analyzer tool on each department’s people or their assets, you can learn:
- Which divisions are performing according to projections
- Which divisions need improvement, such as more training or new employees
By identifying the highest performing divisions, you can reward employees who deserve it, focus your business on the right area, and ensure that divisions that need help get it before they negatively affect your brand.
Is a Portfolio Analyzer Right for Your Business?
Given all of these benefits, many businesses—almost regardless of industry—could benefit from a portfolio analyzer tool. That said, you must how to use such a tool or have some background in statistics and analysis to leverage it properly.
These tools are best for medium to large-sized businesses that have several moving parts and metrics to track. Furthermore, you should only use a portfolio analyzer tool for long-term projections and decisions, not short-term pivots or strategy shifts. Portfolio analysis relies on taking a lot of data, so it’s best used for significant decisions you’ll need to make in the near future.
Conclusion
A portfolio analyzer could be very useful for your business. However, you have to remember this tool will only perform as well as the information you feed it. Continue to gather as much information about your business as possible so your analyzer can provide you with accurate feedback for years to come.
