At My Business FD we are used to working with growing, entrepreneurial companies and over the past 12 months we have helped many of them achieve great results but I think it’s fair to say that generally, last year was not the most positive for business.
So as we begin the New Year, it’s a good idea for any company to sit down, take stock and put together a sensible plan for the next 12 months.
A good start is to review last year’s business performance and make sure you reflect lessons learned in your new plan. For example, if last year told you the average sales cycle was 14 weeks when you thought it was 10, put this new knowledge to good use.
Focus on your short term goals and ensure these are realistic and achievable. Of course it’s great to have a long term business dream but by focusing on the horizon, you are in danger of missing the important issues under your nose. Your new plan should help you identify any areas of weakness and those which are critical to success.
It’s also worth putting together a couple of versions of the plan based on different sales variables. What will happen to my cashflow if I only achieve 75 per cent of my sales target? Or what if I over perform by 25 per cent? Think about the plans you should have in place for each scenario to minimise risk.
At My Business FD we always like to look at the positive but there are times when it’s also good to think about the worst that can happen. Ask, yourself some key questions such as:
• Are my major suppliers trading well or at risk of going under?
• Are my employees happy and motivated or could I put better incentives in place?
Identifying problem situations sooner rather than later can prevent an issue turning into a crisis – ignoring a problem won’t make it go away.
On the flipside, let’s think positively about growth; could I grow faster with more money and if so, where could I look for additional funding? For the right sort of company, business angels can provide management expertise as well as funding which could be a huge asset in these difficult times, or there may be grant schemes you could apply for, R&D tax credits or invoice financing solutions to accelerate cashflow.
Finally, it’s always worth asking someone independent to review your plan - or even help you put it together in the first place. A fresh pair of eyes can offer a different perspective, contribute new ideas and provide a creative approach to challenging issues.
That's where the services of a part time FD like My Business FD offers can really help, highlighting the early warning signs and pitfalls that many young businesses succumb to without the expense of full time financial director services.
So start 2012 as you mean to go on and plan for a successful future. We would like to wish you all a very happy and prosperous New Year.
This is a guest post by Chris Chapman, founder of My Business FD, which offers high growth businesses highly experienced part-time FDs.