Hire a CFO Call us 1300 447 740
Hire a CFO Call us 1300 447 740

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How Do You Know If You Have A Successful Business?

by lauramills
How Do You Know If You Have A Successful Business?

There are so many definitions of a successful business. For example, Google’s definition of a successful business is: “Success is running a profitable firm that conducts business with honesty and integrity, makes meaningful contributions to the communities it serves and nurtures high-quality, balanced lives for its employees”.

Business owners need to dig deeper than this definition. They need to understand their why, and where they want the business to be in the future. My suggestion to business owners is to start with the below to assist in identifying their path.

Define your Strategy

Business Strategy is the small choices you make every day that will lead your business to success. The phrase “strategic focus” can help you to understand the things that you do to run your business.

You need to make sure that your business strategy is not based on guesswork. You need to know where your business is heading. It’s like a journey, almost like a lifetime achievement.

Define Your Mission Statement

Every business needs to have a mission statement or vision statement that explains what your company is all about. This mission statement will help define your company’s direction, focus and actions. Defining a mission statement is perhaps one of the most important things you can do to understand the direction of your business.

Define Your Business Goals

You must have clear goals for all aspects of your business, including Personal Development Goals, Career Development Goals, Sales & Marketing Goals and Financial Goals. These goals should be in line with your strategy.

Some of the questions the business owner needs to ask are:

How does your business add value for its customers?

How can your business best serve its customers?

What is unique about your business model?

Do you know the strengths and weaknesses of your business model?

What opportunities does your business have in the market space in which it operates?

How will you successfully leverage these opportunities in a way that will lead to a high growth rate?

Which elements of your business model must be refined or improved to help achieve the above goals? And what is the plan for executing that plan?

Defining the Strategy, mission and goals allows the business owner to create Key Performance Indicators (KPI’s) that align with the goals and help guide the business to their overall strategy. These KPIs will be the basis of developing the systems and processes that will maximise your success.

Once you have a clear strategy, you should share this with all relevant team members so that everyone is clear on the direction of the company. Then conduct a monthly review to re-evaluate your strategy against current market conditions and business developments. This will ensure that your plan is still going in the right direction by measuring your strategy against the KPI’s that you have set to create a successful business.

Take action

I can hear you saying that you don’t have time to do this and that this will take you away from day-to-day business. This is where you need to lean on your CFO (Chief Financial Officer). This is what we do best and can help lead the way. The CFO Centre has been assisting SMEs for 22 years, offering highly experienced Chief Financial Officers on a flexible, part-time basis. As CFOs we are qualified CPAs or CAs with extensive commercial experience across multiple sectors, so we know what to look for and how to respond to any challenge. Call 1300 447 740 or contact us to find out more.

Written by Elechia Jones, Regional Director – The CFO Centre
Photo by Anna Shvets from Pexels

The Ultimate Guide To Strategic Planning

by lauramills
The Ultimate Guide To Strategic Planning

The Importance of Strategic Planning

Strategic Planning is the key to the success of any business, no matter its size or age. The strategic plan sets out:

  • the company’s direction and priorities;
  • its main operating and financial targets,
  • the actions it will take to achieve those objectives,
  • the new initiatives and investments planned, and
  • their impact on performance.

As we swiftly approach the end of 2023, now is a great time for reflection. What were your objectives for this year? Are you on the way to achieving them, or have other things got in the way?

Some SME owners keep plans in their head, but a formal plan is an extremely valuable tool for managing and growing a business, as it: 

  • clearly communicates the company’s priorities
  • ensures all key staff are working towards common goals
  • sets the focus on key objectives
  • delegates actions and accountabilities amongst employees
  • ensures that decisions made will benefit the long-term company goals
  • highlights strengths and weaknesses.
Failing to plan is like planning to fail

Not spending quality time on strategic planning usually leads to a chaotic working environment. Our clients often talk about ‘not feeling in control’ and ‘not really knowing what is coming around the next corner’. When the plan is weak, business owners tend to operate without the same sense of conviction as those who allocate time and expertise to the planning process. Our CFOs often find that their clients have done some good planning and strategic thinking but need a devil’s advocate to ask the right questions and help to steer the ship in the right direction.

4 Mistakes Business Owners Can Make

  1. They don’t have a plan at all
  2. They don’t have a formal plan, it’s in their head which is difficult to share with others
  3. They don’t have an implementation timetable attached to their plan
  4. They don’t have a mechanism in place to conduct regular reviews

Without a comprehensive, up-to-date strategic plan and an implementation timetable, companies may be missing out on opportunities for growth and not realising their full potential. A formal plan can be an extremely valuable tool for managing and growing a business, as it allows a company to recognise its strengths and weaknesses. 

The Importance of Reviewing Your Plan 

Strategic Planning is integral to business success, however a plan is only useful if it is reviewed regularly to ensure it meets the current and future needs of the business.  It’s vital business owners regularly review their financial strategy to ensure they have the right funding in place to meet the needs of their business, at its current stage of the business lifecycle. 

Most CEOs simply don’t have the time to spend on quality strategic thinking and to document and communicate that thinking in a way which allows the whole business to buy into the vision. Harder still is managing and implementing the business plan. Significant strategic course corrections are commonplace in fast-growing companies. These should therefore, be embraced. The tricky part though is in managing regular change. That requires a combination of time and specialist knowledge. 

There is an art and science to effective strategic planning. Getting it right brings a real sense of clarity and direction to a business – this is where an experienced part-time CFO can make a significant contribution. 

Creating Your Plan

Step 1: Analysis

1.  Analysis of Existing Situation – Organisational Philosophy & Mission & Value

  • Does it reflect what you stand for?
  • Do your people understand its true meaning?
  • Does it make it clear as to how you have to compete and against whom?
  • Is it simply written? Is it clear and unambiguous?  Is it believable and realistic?
  • Does it motivate people? Does it attract pride or cynicism?
  • Does it give us some indication of what we should be doing and how we should be doing it?
  • Do all the constituent parts fit and hang together?
  • “Identity Pyramid” – do you have clarity around all the issues?

2. Internal Appraisal of Company
  • SWOT analysis – revisit previous analysis & ensure it is complete & current
  • Distinguish between endowments and core competencies
  • Assess and audit core capabilities.
  • Gauge fit between external environment and core capabilities
  • Identify fit between customer requirements and core capabilities

Having identified what you perceive to be your competences ask yourself the following questions:

  • Will this give us any source of long term sustainable competitive advantage? Clarify the how? (ie. how relevant is it to the needs of our customers (actual and potential)).
  • Do customers (broadly) agree with our findings (ie. the market place)?
  • Can competitors (present/future) emulate or do better? Do they share our perception?
  • How was this list of core competences arrived at (eg. Training, innovation etc)?
  • Any weaknesses/shortfall still? If so, what further investments will be required?
  • Is there any impact on the strategic balance sheet (ie. Intangible and human assets)?
  • Can it be levered, onto other applications and/or markets?
  • What happens next?
3. Competitive Analysis
  • What is the current process for this task?
  • The Positioning Statement (competitive positioning) – refer below
  • Scan present competitive position but focus also on future competition.
  • Do you really know your competitors strategy?
  • Understand changing face of competition
  • Who could be a future competitor?
  • Is your strategy and your competitors becoming more alike or more divergent?
  • What is the most radical thing that your competitor(s) could do?

4.Value Proposition
  • Consider or revisit the current Unique Sales Proposition within your Marketing plan & ensure it is complete and up-to-date.
  • Do you know why your customers buy from you and not you competitor(s)?
  • Have you asked them?
  • How can you improve customer experience?
5. Environmental & Industry Analysis
  • Consider legal, social, political, economic, technological, markets, labour position, society, pressure groups, and any other environmental issue.
  • Assess potential impact of any change(s) and consider timing implications.
  • Conduct intensive industry analysis.
  • What is the long-term viability of the industry as a whole?
  • What could change the industry dynamics?
  • What is the nature of current industry changes i.e. radical, creative, intermediate or progressive?
  • What could be the impact on your strategy and source of competitive advantage of such changes?
  • Five years or so from now how will the industry leaders look and act?

Step 2: Strategic Thinking

1. Identify Strategic Alternatives

  • All options to be examined – growth, acquisitions, alliances, JV’s, innovation.
  • Upside and downside risks identified

2. Strategy Evaluation & Selection

  • Clear choice to be made
  • How will we compete?
  • Evaluate impact of each option
  • Will it give unique competitive advantage?
  • Can it last? Can it be sustained?
  • Will it differentiate us from our competitors?
  • Can it be converted easily into a set of business objectives / KPI’s?
  • How will competitors react?
  • Easy to implement?
  • Contingencies in place?
  • What about the next wave?
  • Is it consistent with customer requirements and industry changes?
  • Will it create shareholder value?
  • Is it financially viable?

Step 3: Implementation

1. Matching Strategy & Organisational Structure 

  • Do we have the necessary resources?
  • Is there a logical fit?
  • Is current structure adequate? Assess extent of change. Do not ignore culture effect.
  • What about the organisation’s values?
  • Is strategy personalised enough? Assess flexibility and robustness.

2. Allocation of Resources & Responsibilities

  • Planning, Plans, budgets, controls, appraisals etc….. all to be consistent with strategy
  • Strategy well translated into clear objectives
  • Priorities and constraints identified
  • Time horizons clearly laid out
  • Management information systems to dovetail strategic choice

3. Regular Reviews & Adjustments

  • Planning, plans, budgets, controls, appraisals etc…all to be consistent with strategy

Strategic Planning – How a CFO Will Guide You

Under The Spotlight – The CFO as a Strategist

Photo by Rohan Makhecha on Unsplash

Numbers Matter. What’s The Most Important Number In The Universe?

by lauramills
Numbers Matter. What’s The Most Important Number In The Universe?

Numbers matter.

Our mathematical universe is constructed of numbers.

Some we can see. Most we can’t.

From the speed of light to the parabolic curve of a free-kick in football, maths underpins the laws of the universe.

We can also deconstruct our entire lives in numbers.

The average human lives for around 80 years – or 28,385 days.

Most of us will spend 33 years in bed. That’s 12,045 days. For those who hit snooze when the alarm goes off in the morning, it might be closer to 34 years…

You’ll likely spend around 13 years and 2 months (4,821 days) at work. Hopefully, doing something you love.

And 11 years and 4 months (4,731 days) staring at a screen.

That doesn’t leave a huge amount of time for the things that really matter in life…

Spending quality time with family is remarkably, although perhaps unsurprisingly, a very small part of our modern day lives. We’re down to just 38 minutes a week or 104 days in our life time.

That one makes you think.

When it comes to socialising, there’s a little improvement – we’re up to 1 year and 3 days. Again, it’s not a lot, is it?

In business, it seems like we focus constantly on the numbers…

…Leads, opportunities, wins.

Year on year growth.

Cash flow, profit, valuation.

But how often do we put these numbers into context?

How often do we ask ourselves ‘what is the number that really matters to me?’

When we ask entrepreneurs this question, they often find it hard to answer.

It’s an unusual question and causes an interruption in our conditioned daily thought pattern.

One entrepreneur said the number that really mattered to them was ‘6’ as it represented the number of weeks they spent each year skiing, because they had designed their business to support their lifestyle.

Another said ‘13’ to denote the $13m asking price for their business which meant they could retire early and never worry about money again.

The numbers that appear on your P&L and balance sheet matter, but when was the last time you stopped and asked yourself ‘what is the number that really matters to me?’

It’s a powerful question and invariably creates an energetic shift which can fuel a new trajectory for your business and indeed your life.

If you’re struggling to answer that question, contact us as we’d love to help.

Do You Have The Capabilities And Capacity For Scaling Your Business?

by lauramills
Do You Have The Capabilities And Capacity For Scaling Your Business?

Scaling your business

Scaling your business depends on two factors: your company’s capability and its capacity to deal with growth.

To scale up your business, your company must be capable of dealing with a growing amount of work or sales and of doing it cost-effectively.

You need to know that your company can achieve exponential growth without costs rising uncontrollably as a result. It’s vital too, that performance doesn’t suffer as your company scales up.

You also need to be sure that your business systems, employees, and infrastructure can accommodate growth. For instance, if you get a sudden surge in orders, will your company be able to cope? Will you be still able to manufacture and deliver products or services on time? Do you have enough employees to deal with a surge in work or sales?

Scaling a business requires careful planning and some funding. To be successful, you’ll need to have the right systems, processes, technology, staff, finance, and even partners in place.

1. Identify process gaps

Audit your business processes (core processes, support processes, and management processes) to find their strengths and weaknesses. Find the process gaps and address them before you start to scale up.

Keep the processes simple and straightforward. Complex processes slow things down and hinder progress.

2. Boost sales

Decide what your company needs to do to increase sales. How many new customers will you need to meet your scaled-up goals?

Create a sales growth forecast that details the number of new clients you need, the orders, and the revenue you want to generate.

Examine your existing sales structure and decide if it can generate more sales. Can you increase your flow of leads? Do you need to offer different products or services? Is there an untapped market? Do you have a marketing system to track and manage leads? Is your sales team capable of following up and closing more leads?

Make sure you have enough staff to cope with an increase in sales. If you don’t have enough staff, consider hiring new employees, outsourcing tasks, or finding partners that may be able to handle functions more efficiently than your company.

3. Forecast costs

Once you’ve done the sales growth forecast, create an expense forecast that includes the new technology, employees, infrastructure and systems you’ll need to be able to handle the new sales orders. The more detailed your cost estimates, the more realistic your plan will be for scaling your business.

4. Get funding

If you need to hire more staff, install new technology, add facilities or equipment, and create new reporting systems, you’ll need funds. Consider how you will fund the company’s growth.

5. Make delighting customers a priority

To reach your sales forecasts, your company will need loyal customers. You’ll win their loyalty by delivering outstanding products or services and customer service every time you interact with them.

6. Invest in technology

Invest in technology that will automate tasks. Automation will bring costs down and make production more efficient.

Ensure that your systems are integrated and work smoothly together.

7. Risk management

Every growth opportunity comes with inherent risks. You should identify potential financial pitfalls, ensuring that the company takes calculated risks. Evaluating contracts, overseeing compliance, managing debts, and setting up internal controls help to safeguard assets.

8. Ask for help

Don’t be afraid to ask for help from experts who have experience in scaling up companies.  In an interview, Apple’s co-founder, Steve Jobs, said, “I’ve never found anybody who didn’t want to help me when I’ve asked them for help. – I just asked.”

A solid strategic plan is also essential when scaling your business to align your financial goals with the operational objectives. Failing to plan is planning to fail.

In today’s dynamic business environment, scaling a business requires more than just a great idea or product; it demands strategic financial oversight. For many small and medium-sized enterprises (SMEs), the expense of a full-time Chief Financial Officer (CFO) can be prohibitive. Enter the part-time CFO, an innovative solution to meet this challenge.

How To Achieve Revenue Growth x 10 – And Survive Scale Up

by lauramills
How To Achieve Revenue Growth x 10 – And Survive Scale Up

Revenue Growth

When it comes to revenue growth, our Chairman Colin Mills says the best advice he ever received for doubling the size of a business starts with making a list. 

  1. List the top 20 actions that could increase your revenue x 10 
  1. Identify the top 3 options  
  1. Concentrate on those 3 for the next year 

 So let’s say you’re a $4million business. Spend a few hours listing out the 20 things you could do to turn this into a $40million business over the next 12 months. This will force you to think outside the box and away from small incremental changes you can make. 

I suggest you then spend another hour or so considering the Top 3 activities. These will be the activities that are most likely to get you towards your goal of $40m. 

You then have the top 3 activities to focus on over the next 12 months that may well enable you to double your turnover. 

For each of those top 3 activities, develop clear action plans on how you are going to achieve results. 

That, he says, is how you achieve significant growth – if you set out clear, realistic plans for each of your top three, working with your management team. And make sure you identify and mitigate any risks.  

But scaling up brings its own challenges 

It’s great seeing your revenue rise but fast growth sometimes gives you growing pains. We wrote a blog about the 6 basics you need to have sorted to grow a company successfully, which are: 

  1. A clear, well-thought-out vision shared with everyone  
  2. Goals that translate into growth strategies 
  3. Top-performing talent, either employees or outsourced 
  4. Systems for attracting and retaining good clients 
  5. An understanding of the hazards when you scale too fast 
  6. A strong focus! Backed by objective advice from an expert 

 A part-time CFO might well be that expert for you. We helped Bellrock Broking identify their key success factors and get everyone on the same page, feeling motivated to achieve those objectives. 

 As Managing Director Mark Chiarella told us in his video testimonial “I feel organised and [confident] that the priorities of the business are in order.” 


Not to forget, the 2 Cs! 

 On top of those 6 basics, there are two more we need to mention. 

 Your company’s capability and capacity to deal with revenue growth. 

 If workloads go up, orders go up and costs go up, will your business systems, technology, infrastructure and people cope? Can you still deliver on time? Will performance suffer? This blog goes into more detail. 

 It’s likely you’ll need to do some planning and organise some funding to get your ducks in a row. Our client, music reporting specialists Soundmouse, had a serious growth spurt over one year. One of our CFOs helped them raise money so they could be more comfortable in that rapid growth.  

 “Knowing the numbers helps everything. It builds confidence, happiness – and as a result, more money,” says Soundmouse founder Kirk Zavieh. 

 That’s a lot to take in. 

 You’re right, it is a lot. And it requires some objective thinking. 

 One of the toughest challenges for owners of SMEs especially is to be able to stand back, look at your business through a wide-angle lens and identify what it is you really have. Especially when you’re being distracted by the day-to-day of your business.  

 That’s why there’s real benefit in using a qualified CFO as a sounding board, whether they’re an internal hire or a part-time resource from CFO Centre. They can help you make better decisions, take advantage of golden opportunities – and turn revenue growth dreams into plans. 

 Contact The CFO Centre about a free 60-minute discovery session. Or head to the website for more tips.  

 

Image from Venteezy.com <a href=”https://www.vecteezy.com/free-photos”>Free Stock photos by Vecteezy</a>

Successful Cash Flow Management: A Comprehensive Guide

by lauramills
Successful Cash Flow Management: A Comprehensive Guide

Why Cash Flow Management Is Vital

For businesses of all sizes, cash flow management is pivotal to success. While it keeps owners and creditors content, when done correctly, mishandling it can lead to serious issues. Even rapidly growing and profitable companies are not immune to cash flow problems.

Late payments are a common challenge for small and medium-sized enterprises (SMEs), sometimes threatening their ability to trade and grow, and even leading to insolvency in extreme cases.  It can be especially difficult as an SME to get the guys at the bigger end of town to pay their bills on time.

Fortunately, there are steps you can take to manage cash flow and protect against future difficulties. Below we have listed our top 12 cash flow management tips for you:

  1. Strategise to Reduce Costs

  • Immediate effects on the bottom line can be achieved by cutting costs. This can include freezing bonuses and overtime, downsizing staff, or negotiating better terms with creditors.
  • Look at all areas, big and small, it all adds up. Good places to start include marketing, telecommunications, freight and insurance.

  1. Implement Credit Checks

  • Before engaging with new clients, conduct credit checks to flag potential late or defaulted payment history.

  1. Revise Payment Terms

  • Shortening payment terms from 60-90 days to 30 or less can be likened to ending short-term unsecured loans and can improve cash flow.

  1. Offer Payment Options

  • Provide different payment methods, including accepting foreign currencies if applicable.

  1. Set Clear Payment Terms

  • Ensure that contracts with new clients include clear payment terms and late fees.

  1. Provide Early Payment Discounts

  • Encourage prompt payment by offering discounts for early settlements, although this should only be used sparingly to avoid hurting profit margins.

  1. Opt for Leasing

  • Leasing cars, property, machinery, and other essentials instead of purchasing them allows for smaller monthly payments, aiding cash flow.

  1. Consider Raising Prices

  • Though often avoided for fear of losing customers, even a modest increase in prices can help. Soften customer resistance by offering bundled products or services.

  1. Be Prompt with Invoices

  • Quick invoicing is essential. For everyday you don’t invoice, it’s another day you won’t be paid.

  1. Implement a Debt Collection Process

  • Implement a timely debt collection process, at least once a month. If you don’t ask, you don’t get.  Sending even a gentle reminder can lead to payment of invoices.  Just be sure to have a process and timelines in place to ensure the right amount of follow up and escalation of overdue invoices is done.

  1. Utilise Invoice Financing

  • Invoice financing companies can offer immediate cash against unpaid invoices for a fee, typically providing 85% of the value within 24 hours, and the rest (minus fees) upon payment.

  1. Seek External Funding

  • Short-term loans or alternative funding sources, such as peer-to-peer lending, can be effective means to address cash flow needs.

Conclusion

In the challenging terrain of business finance, cash flow management stands as a critical aspect. By adopting the above strategies and being vigilant about potential pitfalls, especially late payments, companies can navigate these waters more confidently.

Numbers tell a story, and understanding that story can help steer a business in the desired direction. With the right strategies and support, your business can overcome the challenges of cash flow and set a path towards growth and success.

The CFO Centre is here to help, our CFOs work as part of your team on a part-time basis. They can evaluate threats and opportunities within the company, aid in financial planning, and promote regular cash flow forecasting. This collaboration can drive smart decisions related to pricing, staffing, and more.  Get in touch if you want to learn more about us.

Embracing AI in the Workplace: A Guide for Business Leaders

by lauramills
Embracing AI in the Workplace: A Guide for Business Leaders

Artificial Intelligence should be embraced in the workplace, here’s my how to for business leaders, writes SIMON DELL.

The integration of artificial intelligence (AI) has emerged as a game-changer, transforming the way organisations operate and interact within their business environment. From optimising internal/external processes to enhancing those customer experiences, AI holds immense potential for business streamlining and growth. For this guest piece, I’ll explore how business leaders can effectively embrace AI in the workplace, unleashing its power to drive innovation, efficiency, sustainable success and hopefully, profitability.

1. Understanding the Foundations of AI

Before diving into the practical applications of AI in the workplace, it’s essential to understand the foundational concepts. AI is the simulation of human intelligence processes performed by computer systems. This involves tasks such as learning, reasoning, problem-solving, and decision-making. Machine learning, a subset of AI which is what is growing exponentially in the business realm, enables systems to learn from data and improve their performance over time without being manually programmed. Grasping these foundational concepts is not only useful but also essential for business leaders aiming to leverage AI effectively. Being armed with this knowledge, one can then make informed decisions about the implementation of AI in areas such as:

  • Choosing the correct AI tool for the job
  • Defining scope and limitations of AI tools
  • Being aware of ethical considerations
  • Managing expectations for employees and customers

2. Identify Opportunities for AI Integration

 The first step for business leaders should be to identify areas where AI can have the most significant impact within their organisation. First start by assessing routine and data-intensive processes that can be automated or enhanced using AI technologies. This might include facets such as customer support chatbots, data analysis for market trends, predictive maintenance in manufacturing or personalised marketing campaigns based on user behaviour.

3. Leverage AI for Operational Excellence

One of the primary benefits of AI in the workplace lies in its ability to optimise operations. Business leaders can leverage AI to streamline usually slow processes, thereby reducing the chance of human error and ultimately boosting efficiency. For instance, AI-powered supply chain management can predict demand fluctuations, enabling businesses to maintain optimal inventory levels and reduce costs associated with overstocking or stockouts. In manufacturing, AI-driven predictive maintenance can prevent costly machine breakdowns by analysing data to anticipate maintenance needs. No matter what industry or sector you work in, AI can benefit your operational tasks.

4. Enhancing Customer Experiences

With increased market competition comes more options for customers to choose from. Businesses more than ever need to now provide exceptional consumer experiences as this will be a key differentiator for brands to standout in already crowded spaces. AI can play an instrumental role in this realm by offering personalised, effective and prompt interactions that efficiently solve customer problems.

Natural language processing (NLP) and sentiment analysis for instance are tools that can power chatbots and virtual web assistants that engage with customers in real-time, addressing those basic queries and concerns. AI-driven recommendation systems can also provide customers with tailored product or content suggestions, increasing your engagement and online conversion rates.

5. Overcoming Implementation Challenges

While the benefits of AI are substantial, successfully integrating a tool sometimes requires overcoming certain challenges. One common challenge is the availability of quality, relevant data that AI systems can rely on for training and decision-making. Business leaders must ensure their data is clean, organised, and compliant with privacy regulations.

Additionally, the lack of AI expertise within your organisation can pose hurdles during the implementation phase. To address this, business leaders should consider partnering with those who have extensive AI knowledge, hiring data scientists, or providing valuable training to existing employees. Alternatively, one could collaborate with external AI vendors or consultants who can assist with accelerating the implementation process.

6. Nurturing a Workplace Culture of Innovation

Embracing AI goes beyond technological implementation—it requires encouraging a culture of innovation and adaptability within the workspace. Yes, some employees might be anti-AI because of the danger it poses to their very role within the business. A business leader though that has open communication and collaboration among their teams for brainstorming and exploring AI use cases will have a far more successful time with implementation than those that don’t. Creating a safe space for experimentation and learning from failures can help organisations make the most of AI’s potential whilst still valuing their workforce.

7. Ethical Considerations and Transparency

As AI integrates itself further into daily business operations, ethical considerations should be at the forefront of decision making and consideration. Business leaders must ensure that AI-driven choices are fair, unbiased, and aligned with the values of the company. Being transparent about how AI is used, and its potential implications is crucial to maintain and build the trust of your employees, customers, and stakeholders.

8. Looking Ahead: The Future of AI in the Workplace

The journey of embracing AI in the workplace is still in its infancy with learnings being an ongoing necessity. As the technology continually evolves, AI capabilities will expand further into the depths of daily operations, with businesses undoubtedly witnessing even more profound transformations across various sectors.

The integration of AI in the workplace offers a multitude of opportunities for business leaders to innovate, enhance operations, and deliver exceptional value to customers. By understanding the foundations of AI, identifying suitable applications, and addressing implementation challenges, organisations can pave the way for a future where AI-driven solutions are at the heart of business success. Through fostering a culture of innovation, maintaining ethical standards, and staying adaptable to change, business leaders can navigate the AI landscape with confidence, without disenfranchising their employee and consumers base, and lead their organisations into a new era of growth.

Simon Dell is the founder of Cemoh, a Brisbane based company that delivers marketing consultants and services on-demand. Simon has consulted for hundreds of businesses from new start-ups to large ASX-listed organisations, across a broad selection of industries. For over 20 years, Simon has crossed every discipline – from creative and branding to strategy and digital. He’s built brands, directed videos, created a TV show, run social campaigns and most recently, launched DrinkedIn, a new generation of business networking.

 

Photo by ThisIsEngineering

External Funding Options for Your Growing Business

by lauramills
External Funding Options for Your Growing Business

Your Guide to Business Financing and External Funding

Getting external financing to fund your company’s growth will depend on your plans, how willing you are to give away a stake, and, therefore, control in the business, your eligibility, and the short-term or long-term funding you need.

How to finance your business growth

Bank finance

Banks can offer you:

  • Unsecured business loans. These will have fixed repayments (including interest) over a set time frame. The amount and the interest rates will depend on the bank and your circumstances.
  • Secured business loans. To obtain a business equity loan, you’ll need to offer your company collateral or assets as security (for example, property, inventory, or equipment). The amount you can borrow will depend on the value of the assets.
  • Buy-to-let loans and commercial mortgages. These are suitable if you’re looking to buy or remortgage business premises.
  • These are more suitable for short-term financial support when your company has a cash shortfall.
  • Business credit cards. Again, these are probably best for short-term support.
  • Invoice finance. It will mean you can access cash that is otherwise tied up in outstanding invoices. It’s ideal if your company offers long payment terms to customers or if you need to grab growth opportunities.
  • Asset finance. This allows you to make small regular payments for an asset rather than a large, one-off payment. It is ideal If you want to preserve your working capital and generate income from an asset as you pay for it.

Angel investors and venture capitalists

If you’re willing to offer a share of your company or equity, you could approach third party investors such as angel investors or venture capitalists (VCs).

You might not have to repay their investment, but the share they will want in return is likely to be high.

Alternative investment markets

You could also consider alternative finance options. These include crowdfunding and peer-to-peer funding.

  • Crowdfunding. In return for early access to your products/services, discounts, or an equity stake in your company, you can raise the money you need from a crowd of small investors.
  • Peer-to-peer lending. You can borrow from individual small investors. If your application is successful, you’ll probably be able to borrow more than you would through a bank and access the funds quicker.

The criteria for the loan might not be as stringent as a bank, but the costs might be similar.

Is your company eligible for funding?

Banks and investors often use what’s known as the CAMPARI method to decide if your company is eligible for funding. That is:

  • C This incorporates everything from your professionalism and brand reputation to your company’s record in repaying loans.
  • A This is about you and your team’s knowledge and expertise and how successful you’re likely to be to generate growth from the financing that investors are being asked to provide.
  • M This is about how well your business is equipped to meet your growth plans. Investors will want to see your Return on Equity (ROE), growth projections, your competitive advantage, detailed financial reports, performance record, and a comprehensive expenditure report.
  • P Investors will want to know how you will use the funds and how they will help to boost the company’s financial situation or generate a profit.

For example,  if you have no liquidity in the business but need it to fulfil an order or if you need a type of machinery to be able to increase your product or service range.

  • A This is about showing investors how you came to decide on the level of funding you’re applying for.
  • R Investors need to be convinced you can afford any repayments. They’ll look in particular at your cash flow and profit margins.
  • I This is all about showing investors you have a fallback position if things go wrong. They’ll need to be convinced you have another source of repayment should you need it.

Get expert help

To make it more likely your company is considered eligible for funding, it is advisable to get expert help.

For example, The CFO Centre has part-time CFOs who have trusted partners within banks and major financial institutions. In addition, they can look at angel investors, VCs, and alternative lending markets for funding on behalf of their clients.

We can help and guide you through every step of the funding preparation and application process.