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Tag: planning

Our 6 Top Tips For Business Planning In 2024

by lauramills
Our 6 Top Tips For Business Planning In 2024

When it comes to business planning, now is the perfect time to reflect on the year just gone and strategise for the year ahead.  The last few years have thrown many of us challenges and/or opportunities never seen before.  So how can your business go further or do better in 2024?

Below is a business planning checklist to help you when planning for the future:

  1. Know Where you Stand

Does your financial reporting provide you with an accurate and timely view of the financial performance of your business? These could contain:

  • Historic balance sheet, profit and loss and cash-flow together with a set of key performance indicators (KPIs) that the management team use to run the business on a day to day basis.
  • Rolling forecast balance sheet, profit and loss and cash-flow driven by the same KPIs. Even a static annual budget is better than no target at all.

  1. Analyse

Have you analysed all of your products or service offerings and identified those that should be invested in and those which should be scaled back to improve the performance of the business?

  1. Review Costs

Have you reviewed all of your costs and identified all of those costs where alternative suppliers can be identified and current deals can be renegotiated? This helps to minimise your cost base and refine your negotiation skills.  Are there possible savings from systems and/or process streamlining?

  1. Review Customers

Have you reviewed all your customers and identified the good ones form the bad ones i.e. those that take ages to pay and/or beat you down on price etc.? It may be time to let the bad ones go and focus on the ones you want.

  1. Assess Risk

Have you assessed all of the obvious risks in your business and made sure that you have a contingency plan in place to avoid those with the highest likelihood and most significant impact?

  1. Your Personal Goals

Take the time to really reflect on why you started the business, are those goals still the same today and are you getting closer to achieving them?

 

Plan:

Once you have considered the above, you are ready to start planning.  A clear operational plan for the future of the business, which shows you the steps required to implement that plan is the best road to success.  If you do not have this it will be impossible to identify opportunities that arise next year that fit your plan for the business.

Most of our clients have been through this process with our guidance and as a result many are now looking to exploit the opportunities, to expand their markets and recruit key staff to help drive their businesses forward in 2023.

To get your business in the best shape for 2024, contact The CFO Centre on 1300 447 740.

The CFO Centre is dedicated to helping businesses meet their strategic objectives. Find out how it works by watching this short video on our website –  https://www.cfocentre.com/au/how-it-works/

 

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>

Why Your Business Will Fail Without A Plan

by lauramills
Why Your Business Will Fail Without A Plan

Do you know how much revenue your business is going to deliver in the next year? What’s your profit forecast? How many goods/items will you be able to deliver to your clients? How many man hours will you need for each month to make this happen?

It is common sense that all activities in the business have a financial consequence. Many business owners’ responses to these types of questions is “How could I know?”

Well, it would be gold to predict the future operations 12 months ahead. CEOs and executives would be able to plan just enough resources to cater for it accordingly. However, nobody is 100% accurate in their predictions.

Moreover, if we plan the business operations activities at the beginning of the year and manage business according to these plans with disciplines, our results won’t be too far from our predictions. We call this process “Budgeting”.

Case Study

A client I have been working with recently, is turning over in excess of $30 million with 12 business segments and over 200 employees. The business adopted a “top-down” approach to budgets many years ago. Most of the managers didn’t even know how to check their budgets. Effectively, their budgets had been not very informative.

I was brought in as the interim Chief Financial Officer to implement a set of more suitable budgets within short period of time.

After investigating their databases and legacy systems, I managed to extract relevant mega data with the help of query tools. Furthermore, I suggested that the Activity Based Budgeting (ABB) approach would benefit them in the long run.

What happened next

  • Planning meetings were held with all business managers to identify daily activities and 12 month action plans
  • Identifies cost pools and cost drivers within each business segment
  • Extracted, transformed and loaded historical data from and to the relevant databases
  • built customised data models to quantify the business plans
  • Time series analysis, multi-factor regression analysis and stress-testing
  • Presented findings and action plans to all business heads in language everyone could work with
  • Tested the numbers with various scenarios
  • Conducted retrospective forecasting

As part of the budgeting journey, we highlighted the business improvement opportunities and the ways in which to realise them. In fact,  this was pushed by the Activity Based Budgeting.

Consequently, the senior executives were thrilled with the “Porsche budgeting experience”.

What does it mean to you?

Budgeting is a disciplined management process that every business needs to achieve the optimal commercial outcome.

A part-time CFO will review and build out your business plan so that your budgets and forecasting make commercial sense.

Lastly, it is never too early to start planning, and it is never too late to roll out budgets into your everyday business management.

 

Written by Clinton Cheng, CFO at CFO Centre Australia

How to Outsmart Your Competitors with a Business Plan

by lauramills
How to Outsmart Your Competitors with a Business Plan

Most business owners know that without a comprehensive, up-to-date business plan and an implementation timetable, they may be missing out on opportunities for growth and not realising their full potential.  However, around 30% of SMEs don’t have one. To ensure you’re ahead of your competitors, it’s imperative to find the time and/or resources to create and implement a plan for the start of the new financial year.

A formal plan can be an extremely valuable tool for managing and growing a business. It allows a company to recognize its strengths and weaknesses. Furthermore, research has shown that SMEs that have a business plan in place are consistently more profitable than those who don’t.

A Formal Plan

Planning is the key to the success of any business, no matter its size or age.  Yet many SMEs don’t have a plan. The majority of those without such a plan say they don’t believe it’s necessary or that they keep their plans in their head.

It’s concerning that so many small and medium-sized businesses don’t have a formal business plan. Without clear direction, they may be missing out on opportunities for growth and not realizing their full potential.  A plan is invaluable and should see out the company’s:

  1. Strategic direction
  2. Main operating and financial targets;
  3. Actions it will take to achieve those targets,
  4. New initiatives and investments planned;
  5. And their impact on the company’s performance

Creation and Implementation

Creating a well thought-through, comprehensive business plan is an arduous task. Thinking through objectives and likely outcomes which may occur many years down the line is challenging. But it is the hard work up front which makes for lighter work down the road as all of our team of part-time CFOs will attest to.

Most CEOs and business owners simply don’t have the time to spend on quality strategic thinking or 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 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 business planning and getting it right brings a real sense of clarity and direction to business – this is where an experienced part-time CFO can make a significant contribution.

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’.

Proper business planning is very liberating for the business owner, whatever their objective might be. A well-constructed and regularly reviewed business plan will instil real confidence that the goal is indeed achievable.

Key Benefits

Writing a business plan has many benefits for businesses of any size and in any industry. It can help owners and senior managers to:

  1. Clarify objectives and develop suitable strategies.
  2. Understand the market.
  3. Identify and overcome internal and external threats
  4. Organise the company
  5. Access external funding

Key Elements

The most important part of your business plan is its financial information. Your financial forecasts should include your cash flow predictions for the next 12 months or more. You’ll also need to include sales estimates and costs to ensure the business has enough working capital or to ensure you understand any needs to arrange additional financing.

You need to explain all assumptions in the business plan, with best and worst case scenarios. Detail the risks you’re likely to face and how they will be dealt with.

Conclusion

  • An up-to-date business plan or ‘roadmap’ in your business will allow you to experience a sense of control, which may have been absent since the day you started your company.
  • The business plan will remove a significant amount of confusion from your operating procedures. There will always be challenges contained within new projects but you will have a proper framework against which all decision-making can take place.
  • The plan provides the blueprint for delegating responsibility to your team and allows you to create some space in your own environment to work on growing your business.
  • You will move out of the chaos and into a more serene working environment where each of the gears, which make up the bigger system, is able to move in harmony.
  • Potential hazards will have been identified in advance and dealt with before they become unmanageable. You will be able to move from a culture of fire-fighting to a culture of fire-prevention and the benefits will be felt by each member of your team and most probably by your customers too.
  • A part-time CFO can assist with creating, implementing and reviewing your Business Plan, as well as be a constant guide and sounding board for you.

The business plan is the first key to profitable growth!

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