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

Tag: finance

Critical Factors for Improving Profitability

by lauramills
Critical Factors for Improving Profitability

In a recent survey of our clients, improving profitability emerged as one of the top three priorities on their business agenda. Profitability is the lifeblood of any successful enterprise, and understanding its intricacies is crucial for business owners and managers alike. In this blog, we’ll dive into the two primary drivers of profit and explore the indispensable link between profitability and cash flow.

Profitability is affected by sales and reducing costs. Within the realms of sales there are 3 critical areas: price, volume and customers. These elements are not isolated but intricately interconnected, each influencing sales in unique ways.

  1. Price

To improve profitability and performance, price sets the scene. It will determine the volume of sales and ultimately attract different types of customers.

The most obvious part of profitability is the selling price. It is essential when determining the price to ensure that the price and sales volume allow the business to be profitable. It is therefore, good practice to also review these prices regularly.

Setting prices involves a careful balance across your product range. It’s common to have “loss-leader” products, which may not yield substantial profits but can be offset by other lucrative offerings. Competitive pricing and your desired market positioning should also guide your pricing strategy. Discounts can boost sales volume but may impact profitability, so diligent record-keeping and regular review are key.

When offering a discount to a customer, always remember that the discount will increase sales volume, but it will also eat into the profitability of the products. You should record all discounts and review them regularly.

Two valuable metrics for monitoring pricing effectiveness are profit margin and mark-up. Both metrics should be in sync with your pricing strategy, allowing you to make necessary adjustments.

  • Always review your gross and net margins against previous periods
  • Understand customer profitability and their behaviours
  • Minimise discounting if possible
  • Implement and review a mark-up policy
  • Analyse sales on a regular basis.
  • Use key financial indicators to identify any anomalies that may impact the sales price:
    • Cost of goods sold margin
    • Gross margin
    • Average stock turnover
    • Mark-up

  1. Volume

There are two ways in which volume can be increase. The first is through increasing your current level of sales with your existing customers, and the other is sourcing new clients.

To boost sales with existing customers, implement a comprehensive marketing strategy and capitalise on the often-overlooked opportunity of up-selling. Effective sales targets and an understanding of your break-even point are essential to drive performance.

Selling targets are a way to monitor overall performance and enhance profitability. Therefore, I advise you to look at this carefully as it can have an impact on other areas of the business. Understanding your break-even point will allow for realistic targets to be set and ensure profit is maximised.

To help increase the volume:

  • Understand your customers’ buying patterns
  • Implement a marketing strategy to increase sales volumes
  • Introduce loyalty programs that encourage referrals
  • Train staff to excel in upselling high-profit products.
  • Use break-even calculations to set achievable sales targets
  • Explore opportunities to expand into new markets

  1. Customers

Exceptional customer service is the cornerstone of customer retention and acquisition. Understanding your customers’ needs and preferences is a simple yet powerful step towards business improvement. Utilising a Customer Relationship Management (CRM) system can provide invaluable insights into customer behaviour.

  • Understand the needs of the business customer and use this information to improve the customer service experience.
  • Utilise tools like Survey Monkey to measure customer service levels.
  • Reward current customer for their loyal support
  • Consider using mystery shoppers to monitor customer service
  • Maintain regular contact with customers to stay top of mind

In conclusion, the pursuit of profitability is a nuanced journey, and this blog only scratches the surface of what’s achievable.

At The CFO Centre, we boast a team of over 45 experienced CFOs across Australia and New Zealand, and over 1000 globally. Our track record speaks volumes about our ability to help clients boost their profits. If you’re interested in learning more, feel free to contacting us at 1300 447 740. Your success is our priority, and we’re here to help you on your journey to greater profitability.

You can also get in contact with us here.

First published on 22nd Feb ’22
Updated on 15th Jan ’24

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

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.

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.

How To Resolve Your Cash Flow Problems

by lauramills
How To Resolve Your Cash Flow Problems

Managing cash flow is critical to the success of any business. Get it right, and shareholders, creditors, and employees are happy. Get it wrong, and the company could end up on the ropes.

Cash flow problems can beset even profitable companies, particularly those experiencing rapid growth.

So, how do you protect your company from future cash flow issues?

  1. Cut Costs 

Cost-cutting will have a more immediate impact on your bottom line than revenue-raising efforts. You could for instance place a freeze on bonuses and overtime payments, reduce the number of employees through attrition or redundancy. You could also approach creditors to ask for better terms.

  1. Carry out credit checks

Before taking on new clients, carry out credit checks. Companies that regularly make late payments or default on payments should be red-flagged. You should also get new clients to sign contracts that include your payment terms.

  1. Offer early payment discounts

Encourage your clients to pay earlier than normal by offering early payment discounts. The early payment discount should only be used when the company is in urgent need of cash. Do it too often, and you will make a serious dent in your profit margins.

  1. Reduce your payment terms

Cut your payment terms from 60 or 90 days down to 30. Think of it this way: when you allow customers to pay in arrears for your products or services, you’re essentially giving them short-term unsecured loans.

  1. Lease rather than buy

Consider leasing rather than purchasing cars, property, office furniture, machinery, and IT and telecommunications equipment. The benefit of renting rather than buying is that you will only have to make small monthly payments. This should help your cash flow.

  1. Raise your prices

Companies are often reluctant to raise their prices for fear they’ll lose valued customers to competitors. But even a small rise in costs can chip away at your profit margins. You can overcome customers’ resistance to a price rise by offering bundled products or services.

  1. Issue invoices promptly

Many companies don’t issue invoices quickly enough or chase late payments. Consider this: every sale has already cost the company in some way, whether that’s the purchase of raw materials, warehousing, labour, sales and marketing, and distribution. If you don’t collect what you’re owed, you’ll be worse off than if you never made the sale.

  1. Use invoice financing

Hire a company that provides invoice financing (either invoice discounting or factoring) to receive an immediate cash injection. Such companies provide funding against your unpaid invoices for a fee.

Usually, you will receive up to 85% of the value of the outstanding invoice within 24 hours. You’ll then receive the remaining 15% minus the broker’s fee once your customer has paid the outstanding invoice.

  1. Get external funding

You could approach banks or lending institutions for a short-term loan or use other funding sources such as self-finance, partners, investors and alternative finance like peer– to–peer lending.

  1. Hire a part-time Chief Financial Officer 

A part-time CFO from the CFO Centre will look for all the things that pose a threat to the company and work with you to resolve them. Your CFO will look for ways you can meet your most pressing financial requirements and review all incomings and outgoings to find where improvements and savings can be made.

You’ll be encouraged to use regular cash flow forecasts. Such forecasts will alert you to possible cash shortfalls in the near future. You can then make arrangements for additional borrowing, for example. It will also help decision-making around whether to hire new staff, raise your prices, move premises, find new suppliers or tender for a large contract.

We love numbers, we understand how to interpret them and use them to help get your business where you want it to be.

For more information, you can visit How It Works or get in Contact with us to speak with one of our dedicated team.

What does a CFO Actually Do?

by lauramills
What does a CFO Actually Do?

Often, we get asked by friends, family and peers: What does a Chief Financial Officer (CFO) actually do?  These are frequently people that have known us for years, that we dine with regularly, share holidays with, stand at the side of the footy pitch with! Yet, they don’t fully understand exactly how we have helped business owners to transform and scale their businesses. So, if the term “part-time CFO” is as alien to you as “UFO”, here’s what we do, in a nutshell:

Whilst a CFO is a qualified accountant, they also have decades of high-level commercial experience, quite often across many industries.

A CFO works alongside you as the business owner/CEO – giving you more time to work on the business instead of in it. The part-time CFO concept is tremendously cost effective as most CFOs pay for themselves with the cost savings they identify in your business.

 In a nutshell, a CFO will typically:
  • Help you strategize, plan and operate your business to maximise on cash, profitability and company value
  • Gain access to funding
  • Ensure you have a solid banking relationship
  • Become the custodian of your internal Finance function.
  • Work with your bookkeeper or Finance Officer and/or external Accountant.
  • Analyse results in the context of the company’s objectives and strategies.
  • Establish clear KPIs (measures that really matter)
  • Ensure you (the owner or CEO) understand the financials, the trends and the issues they identify
  • Assist in growth, expansion (including overseas) and exit strategies
  • Become a trusted sounding board and devil’s advocate

The need for a part-time CFO may appear earlier on your journey than you may expect.  For instance, you may have turnover of over $1million and are experiencing growing pains. Perhaps you would like to grow in a sustainable way, or improve the financial performance of your business. Either way, I would say it’s worth exploring how a CFO can help you in your business.

Our unique 12 box model gives a deep dive into each of the areas that a CFO will assist you with.

 The CFO Centre

The CFO Centre provides part-time CFOs to SMEs, so you get the experience of a high calibre CFO for a fraction of the cost of a full-time resource. We have years of experience as a Senior Finance Executive or CFO for large corporations. They have extensive knowledge and experience to bring to your business.  In addition, with no lock in contracts, we can work with the needs of your business, providing our services 1-2 days a week to as little as one day a month.

As a global company, we have over 850 CFOs in 18 countries, so we really have seen it all!  Therefore, the benefit for you is that no matter what your needs, however complicated, you can tap into that global wealth of knowledge at no extra cost. It’s pretty powerful stuff.

Our video on How it Works sums all of this up, or if you’d like more info you can get in touch with us here.

Tell Me Why I Need A Part Time CFO

by lauramills
Tell Me Why I Need A Part Time CFO

You are the owner or CEO of a medium size business. You already have an in-house accountant and an external public accountant. Why might you need another finance person?

Here are 8 reasons why a part-time CFO will be beneficial to your business:

  1. DIFFERENT (BUT COMPLEMENTARY) AREAS OF EXPERTISE

CFOs will normally have substantial hands-on commercial business experience (see point 3 below). Accountants are more skilled in their areas of expertise, but typically don’t have that depth of hands-on operational commercial experience. The skill sets are different, but complementary. The three finance professionals, working together as a team, can produce substantial benefits.

 

  1. BETTER INFORMATION

You need good information to make good business decisions. For example:

  • FORWARD LOOKING reports, such as cash flows and order/sales forecasts
  • NON FINANCIAL information such as key operational KPIs
  • Customer, territory, sales channel, service and product profitability
  • More frequent high-level timely reporting on key business indicators i.e. the weekly dashboard

CFOs can provide business intelligence reporting, specific to that unique business’s characteristics and challenges. They are generally more experienced at   “management accounting” i.e. providing the right information which management need to run the business. Management accounting is very different from what the tax accountant uses, or what generic software P&L reports provide.

 

  1. COMMERCIAL SKILLSET

Most CFOs are professionally trained accountants, who then move to commercial roles. Normally it would take at least another 10 years of commercial experience to become a CFO. In these corporate roles, CFOs often partner with the CEO as their right-hand person, thus acquiring extensive commercial and operational experience. They often have project management, IT, risk management, internal controls/processes and administration experience.

 

  1. BENEFITS FOR THE OWNER or CEO:

 The part-time CFOs:

  • Can focus on finance, admin, and IT thus freeing up the CEO to focus on the business
  • Pass on best practices and techniques learnt in corporates
  • Be a sounding board, mentor and advisor
  • Be a long-term relationship-based partner who takes the time to really know the business
  • WORK WITH OWNER/CEO TO ACHIEVE THEIR GOALS AND AMBITIONS

 

  1. FLEXIBLE CUSTOMISED ENGAGEMENT

  • You pay for the level of engagement that you need, in contrast to the fixed high costs of a full-time CFO
  • Both retainer and time spent fee structures are available

 

  1. HIRE ONE, ……TAP INTO THE NETWORK

The CFO Centre has over 750 CFOs. When you engage with a CFO from The CFO Centre, you can effectively tap into this global network which has in excess of 10,000 years of experience and knowledge.

 

  1. IMPROVED STAKEHOLDER CONFIDENCE

The CFO Centre are the global number 1 provider of part-time CFOs, Hiring a part-time CFO from The CFO Centre will give banks, suppliers and other partners added confidence to deal with the company.

 

  1. VALUE FOR MONEY

Take advantage of experienced commercial professional, on a flexible structure determined by the client, at a fraction of the cost of a full time CFO.

 

SUMMARY

For SMEs who have grown in size and complexity, but not yet reached a size where a full-time CFO is required, the “part-time”, or  “on-demand” CFO could be the solution.

Written by Gary Campbell. Gary is a CFO with The CFO Centre in Victoria, Australia. He is particularly successful at profit improvement, financial turnarounds, reporting and risk management within manufacturing and distribution sectors. He can be contacted at [email protected], or you can contact us here

How to be More Strategic and Successful in 2023

by lauramills
How to be More Strategic and Successful in 2023

The impacts of covid-19 will stay with us for the rest of our lives.

We’ve seen new businesses birthed with success and others thriving amid chaos. We’ve seen neighbourhood classics tragically lost, and others that struggle to survive day-to-day.

Critical points like these thrust every business owner from acting with strategic intention to reacting to curveballs. As we are coming to the end of 2022, most businesses are settling into one of three camps:

  1. Thriving, but not trusting the success
  2. Reviving but hesitant to make bold moves
  3. Surviving and feeling battered, bruised and disillusioned

No matter which category you fall into, you likely are eyeing the rest of 2022 with caution. You’re optimistic but timid in your approach to making those big visionary goals you’ve made in the past. You may even find it hard to dream of a better future because it feels so out of touch with what is happening globally. You are not alone in those feelings.

Now is the opportunity to rewrite the rules and stop settling for less in your business. It is the opportunity to cast a strategic vision that is different from the past and to create more success and growth in your business and your life. Here are some ways you can make it happen.

1. Accept that change is necessary

Change is difficult, but it is for-ever ongoing for small-business owners. And change is happening at a frightening pace.

You’ve likely noticed that the old reliable ways of getting clients and serving them are faltering. The to-do list of things that need your attention is never ending. It’s time to put them to bed.

If change is already happening in your business, why not get ahead of it? When you are reacting to these changes, you treat the symptoms. The better approach is to embrace change to treat the problem.

By treating the problem, you employ change to work with you, not against you. People are likely to welcome strategic change now—especially if the change makes their lives better too.

One way to bring agility and innovation into your business is to implement a quarterly strategic planning and review process into your business. This planning keeps your efforts focused, actionable and accountable while remaining agile and able to shift as new learnings come to the table.

As part of the process, ask yourself these questions.

  • What would disrupt your business enough to change everything?
  • How can you be on the leading edge of that change?
  • How can the business be relevant and profitable five or even 10 years from now?

 2. What does the customer really want / need?

The old rules of supply and demand have gone. Through issues with manufacturing and distribution, product-based businesses feel the pinch. Changing client needs and social distancing have left recession-proof businesses struggling. Service-based businesses are finding that their services are no longer crucial or needed. No business or business model has been unaffected.

The reason is simple: The customers’ needs and their problems are in a constant state of change.

Engaging in a conversation with your clients to identify opportunities is a perfect strategy moving forward. The strategy could be as simple as asking a probing question at the end of every client interaction. It could also be more involved such as surveys or quarterly client advisory groups, to follow a more formal process.

More than ever, staying in tune with the customers’ needs and the problems you can solve is imperative. It is the gateway for future growth and innovation.

3. Work smarter, not harder

Australian culture is all about hard work. If you have struggled to achieve your goals, you’ve likely heard someone telling you to work harder.

Since the rise of intellectual capital as a commodity in the 1980s, the ability to be successful is less about our ability to work hard. Many business owners have told me how hard they work only to find success seemingly out of their reach. Evidence that success is not about hard work.

Sure, success demands focus, determination and resilience. But I challenge the notion that hard work is one of the requirements. If it were, we would have more success stories to celebrate.

Working smarter is about leveraging the talents of people and collaboration. When you remove hurdles and bottlenecks in your processes, you promote ease. It’s the processes that are often the problem. That which is easy gets accomplished. That means being able to produce more revenue with the resources you have. You likely will see a boost to team morale and stop spending time putting out fires.

It leverages technology and systems to streamline the business, allowing it to run smoothly. According to Gartner Research, by 2024, organizations will lower operational costs by 30% by combining hyper automation technologies with redesigned operational processes.

Consider which elements of your client experience and service could be delivered through automation, saving critical points for human interaction and forward looking strategies for your business. The organisational efficiencies gained can offset growth investments and produce a more efficient team.

4. Profit is the aim, not a reward

One of the most misleading entrepreneurial and inspirational quotes is: “Follow your passion and the money will follow.” If only things were that simple.

If success is a reward of hard work, this quote puts profit on the same unattainable pedestal. Passion for what you do gives you fire in your belly and can bring a sense of contribution. At the end of the day, though, passion doesn’t pay the bills; prolific profit does.

By shifting your mindset around profit and other metrics in your business, a magical change in how you spend your day occurs. You start focusing on initiatives that produce results and impact your bottom line.

A 2018 Cone/Porter Novelli Purpose study found that “78% of Americans believe companies must do more than just make money; they must positively impact society as well.” This marriage of purpose and profit is an instance where everyone wins. Clients love supporting social impact; businesses can be profitable and improve their community and world in the process.

For many of my clients, bringing profit up on the priority list, even with reduced revenue, is the defining element of rebuilding business stability.

5. Be a confident leader who empowers others

The entrepreneurial trials of the economic crisis have shaken the confidence of even the most experienced entrepreneurs. We are questioning everything in our professional and personal lives. Whispered conversations with other entrepreneurs over the year let us know that we are not alone in that journey.

With this period of reassessment, the future feels less certain. That uncertainty erodes our confidence to take risks and make bold moves. Past success, “knowing” and being right are pillars in the old definition of confidence.

Be careful—that shaken faith also seeps into our teams’ bones. They want something to champion.

There is good news that can breathe new life into your confidence. You do not need all the answers. You do not even need to know the “how” beyond “what is the best next step?” And, you don’t even need to be right.

Empowering others is what defines the success of top leaders. What got you here has centered around who you are and what you can accomplish. Those accomplishments won’t fuel the future. Relying on your efforts alone is a limiter when scaling your business — even in strong economic times. The old definition of confidence was about what you could do. Your future confidence needs to be about your team and the belief in what the team can do.

For 2023 to be the beginning of your comeback story, you need to take action differently enough to move the needle in your business. Make bold moves that advance and protect your business. Marry your vision to these tips, and you could be looking at a successful year.

Peter O’Sullivan, The CFO Centre