About this episode

Resources are vital for business growth and success, but resources are not just about money. They include people, equipment, systems, time, skills, reputation, working capital, and the ability to use those resources well.

In this episode, we explain how to carry out a resource analysis for your business. We look at physical resources, financial resources, human resources, intellectual capital, threshold resources, competitive advantage, and the competencies needed to use resources effectively.

What you’ll learn in this episode

• What resource analysis means in practical business terms.
• Why resources are not limited to money.
• The four main resource categories used in resource analysis.
• How resources and competencies work together.
• The difference between threshold resources and competitive resources.
• How resource analysis supports better planning and decision-making.
• How a touring dance company example helps explain the model.

What is resource analysis?

Resource analysis is the process of identifying and assessing the resources available to help an organisation achieve its objectives. It also helps us see whether those resources are being used constructively, efficiently, and in the right areas.

Resources can help or hinder progress. A business may have valuable assets, skilled people, a trusted brand, or strong systems, but those resources still need to be managed and used properly.

That is why resource analysis is useful. It helps us bridge the gap between having resources and using them well.

Why resource analysis matters

A business needs suitable resources and competencies to survive, grow, and compete. If we do not understand what we already have, what we lack, and what needs improvement, we may make poor decisions about growth, investment, staffing, or new projects.

Resource analysis gives us a clearer view before making major decisions. It can highlight areas that need more investment, resources that are underused, and activities that may no longer matter as much as they once did.

It also links closely to business planning. If you are reviewing your future direction, our episode on Planning Your Business Journey is a useful next step.

The four main types of business resources

In the episode, we group resources into four broad categories. Each category plays a different role in business capability.

Physical resources

Physical resources are the things we can see, touch, use, or operate. These may include buildings, vehicles, equipment, stock, technology, machinery, premises, and tools.

Financial resources

Financial resources include funding, working capital, cash reserves, budgets, access to finance, and the money needed to support day-to-day operations and future plans.

Because money supports so many business decisions, financial resources need regular review. Our episode on Budgets: Your Business Financial Story explains how budgets help turn plans into a clearer financial story.

Human resources

Human resources include the people in and around the business. This covers staff, freelancers, contractors, managers, advisers, skills, experience, capacity, and the ability of people to deliver what the business needs.

Intellectual capital

Intellectual capital includes assets that may not be physical but still carry value. This can include brand, reputation, client databases, business systems, knowledge, processes, relationships, and creative ideas.

A strong reputation or brand is useful only if we can use it effectively. Resource analysis helps us ask whether those assets are being properly supported, marketed, protected, and used.

Resources and competencies

Resources are what we have. Competencies are the skills, experience, and capabilities needed to use those resources well.

For example, a business may have a strong brand, but it also needs marketing skills to make use of that brand. A business may have equipment, but it needs trained people to operate it. A business may have money, but it needs planning and financial control to use it wisely.

This is where resource analysis becomes more than a checklist. It helps us connect assets with the competencies needed to create value.

Threshold resources and competitive advantage

The episode explains resources and competencies at two levels: threshold level and competitive advantage level.

Threshold resources

Threshold resources are the resources a business needs to survive and operate. They help the business keep going, deliver basic services, and meet minimum requirements.

Competitive resources

Competitive resources help a business stand out. These may include a strong reputation, specialist knowledge, unique systems, creative talent, customer loyalty, or a brand that competitors find hard to copy.

If our ambition is more than survival, we need to think beyond threshold resources. We need resources and competencies that help us grow, compete, and build something stronger.

Resource analysis example: a touring dance company

The episode uses a touring dance company to show how the framework works in practice.

Threshold resources might include a van, administration systems, basic infrastructure, financial resources, dancers, and technical support. These are needed to keep the company operating.

Threshold competencies might include basic choreography skills, driving licences, budgeting, planning, cash management, and capable dancers.

Competitive resources may include the company’s reputation, brand, innovation, audience engagement, and creative identity. Competitive competencies might include marketing skills, creative talent, choreography, lighting design, and strong management.

If the original resource analysis table is still being used on the page, it can sit here:

[table id=37 /]

Limitations of resource analysis

Resource analysis is useful, but it is not perfect. One limitation is that we may not clearly identify the competencies required to use our resources well.

Another limitation is that business conditions change. Organisations do not operate in a vacuum. Economic conditions, customer expectations, technology, competitors, and funding pressures can all change what resources and competencies are needed.

That means resource analysis should not be a one-off exercise. It needs review as the business changes.

Practical steps for carrying out resource analysis

• List your physical, financial, human, and intellectual resources.
• Identify which resources are essential for basic survival.
• Identify which resources help your business stand out.
• Review the skills and competencies needed to use those resources well.
• Look for gaps between what you have and what your objectives require.
• Assess whether any resources are underused or no longer important.
• Review working capital, cash flow, and budgets before major decisions.
• Update your analysis when the business environment changes.

Related episodes

• Planning Your Business Journey
• Build Your Cash Flow with a Spreadsheet
• Budgets: Your Business Financial Story

Key takeaway

Resource analysis helps us understand what our business has, what it needs, and how well those resources are being used. It also reminds us that money is only one part of the picture.

People, skills, systems, equipment, reputation, working capital, and planning all contribute to business capability. If we want to grow beyond survival, we need to understand both threshold resources and the resources that create competitive advantage.

If planning, resources, or financial control feel unclear, visit ihatenumbers.co.uk or listen to the related episodes above to build more confidence with your numbers.

Plan it, Do it, Profit.

“Resource analysis helps bridge the gap between having valuable resources and using them well.”

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Episode Timecodes

• 00:00 – Why resources matter for business growth
• 00:59 – How resource analysis supports business planning
• 01:42 – The four categories of resources
• 02:26 – Managing, deploying and using resources well
• 02:50 – Threshold competencies and competitive advantage
• 03:11 – Limitations of resource analysis
• 03:36 – Why resources need regular review
• 04:04 – Resource analysis example: a touring dance company
• 05:20 – Threshold versus competitive resources
• 05:40 – Final summary and next steps

About the Podcast

The I Hate Numbers podcast helps business owners understand accounting, tax, finance, profit, cash flow, and business planning in a practical way. We simplify financial topics so you can make better decisions and feel more confident with your numbers.

You can also watch more practical finance and tax support on the I Hate Numbers YouTube channel, or listen and follow on Apple Podcasts.

Further Support

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https://www.ihatenumbers.co.uk/i-hate-numbers-book/

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https://www.ihatenumbers.co.uk/i-hate-numbers-podcast/

🌐 Website

https://www.ihatenumbers.co.uk

It's probably a statement of the obvious to say that resources are absolutely vital for the growth and success of your business. And by resources, I don't mean just money. In this week's podcast, I'm going to be looking at a resource analysis tool that you can use to help guide your business forward. I am going to be talking about a way to categorise resources, not just money, but into the different categories that you acquire.

I'm also going to go through an example of how to use this analytical tool in the eyes of a touring dance company.

You are listening to the I Hate Numbers Podcast with Mahmood Reza. The I Hate Numbers podcast mission is to help your business survive and thrive by you better understanding and connecting with your numbers. Number love and care is what it's about. Tune in every week. Now, here's your host, Mahmood Reza.

Hi folks. Welcome to another weekly episode of I Hate Numbers, the podcast that's there to help you increase your financial awareness, improve your money mindset, help you make more profit, save tax and time. What's not to love? Let's crack on with the podcast. Now, resources, as I said earlier, are absolutely vital for your business growth and success. It’s necessary and important to see if what you have already

will help or hinder your business. Resource analysis helps you bridge the gap between having valuable resources, and using them constructively and efficiently. Your strategic capability is determined by the adequacy and suitability of your resources, and your competencies. These are necessary for you to survive and prosper.

If you check out the show notes at the end, I've got a link to a nice little matrix, which summarises what we are talking about on this podcast. Firstly, what do we mean by resources? And it's usual to categorise resources amongst four discrete categories. There are resources that are physical. Those are things that we can physically touch, see, and kick,

for example, buildings. There are the financial resources, typically, the people who provide funds, sufficient working capital. There are the human resources, typically made up of the numbers of staff, individuals, skill levels. And there's intellectual capital, which consists of your brand, your name, your reputation, your client databases, and your business systems.

Now, resource analysis needs to consider how you manage, deploy, and utilise those resources. For example, there's no merit in your business having a great reputation and a good brand if it's not exploited effectively and efficiently. When it comes to competencies, competencies are viewed at two levels. There's what's called the threshold, and then there's the competitive advantage level.

The threshold level is all about survival of your business to keep things going on and in working order. Competitive competency is indicative of your business' own USPs, unique selling propositions. Being a market leader, driving your business forward to your level of success is what your business needs to stay ahead of your competitors,

and also to push your business towards success. Resources are those that are required to operate at a level, and competencies are those required skills, and experiences, and abilities to use those resources. Now, there is some limitation in this approach. One would be not clearly identifying your required competencies or organisations. Your business does not operate in vacuums,

and you need to respond to an ever-changing landscape and an economic climate. Consequently, threshold competencies will also change, and your business needs to continually review those required resources. Complementary resources and competencies need to be identified. For example, a good brand name and reputation requires effective marketing capabilities to be able to exploit that brand name.

Let's dive into now an example of a touring dance company. If we look at a touring dance company, the threshold resources may be the physical assets of a van and a vehicle, the administration, the infrastructure, the financial resources, the dancers, and the technician support. Threshold competencies, maybe the basic choreography skills,

individuals who have driving licenses, obviously to be able to operate the van, budgeting and planning skills, cash management skills, and able dancers. Remember, a threshold is what you need in order just to survive, to tread water. Now unique resources, those that are required for competitive advantage, would be the reputation of your dance company, the brand, the innovation, and the audience engagement.

The competencies required at a core level to meet those capabilities would be marketing score, marketing skills even, a pool of creative talent, eg. choreography, lighting and design, and effective management skills. Now, to summarise, the strategic capability of your business is dependent not just on the adequacy and suitability of the resources, but the skill sets and competencies to actually manage those resources.

You need at least a threshold level in order to survive, to tick over, to operate. If your ambition is beyond mere survival, then you need to make sure you've got resources, and skills and competences at the competitive level. These will be the ones that your competitors will find difficult to emulate, to replicate, or get hold of.

So, just to summarise folks, what we need to understand is the resources that your business requires at a threshold level and a competitive level, and what skills and capabilities you need in order to operate at both threshold and competitive level. I hope you found this podcast useful. I’d love it if you could share some feedback.

Until next week, folks, have a good week. We hope you enjoyed this episode and appreciate you taking the time to listen to the show. We hope you got some value. If you did, then we'd love it if you shared the episode. We look forward to you joining us next week for another I Hate Numbers episode.