05 Jan Business Planning for 2021
Let’s face it, 2020 was a year when any kind of plans be they business, holidays or just going out for a meal were completely ruined by COVID-19.
So, in 2021, it is even more important than ever to have robust business plans in place. These plans should aim to push you closer to your goals, what ever they may be. You may be looking to sell your business at some point, you may be looking to increase sales or improve your profit percentage. What ever your goals we are here to help you plan to achieve them. Below, in no particular order, are some of the services we offer.
Starting the year with a financial plan in mind (or better still on a spreadsheet!) is a great way to help you understand where you think your business can go. The process of putting together a monthly profit & loss account can be quite cathartic and can also help weed out some of those little bits of expense that no longer have a place in your business. Once the plan has been put together, you can then measure the performance of your business on a monthly basis to track where you should be by the end of the year.
Unpredictable cash flow can be a major issue for any business, whatever the size, and is often the reason for companies becoming insolvent. Key to ensuring that your business does not become a victim of poor cash flow is putting together regular cash flow forecasts. While it is almost impossible to predict what will happen over a six or twelve month period, looking forward four or even six weeks will give a clear indication of the short term from a cash flow perspective. You could then use your budget to look further forward.
Sometimes as business owners, we find ourselves transfixed to the top line. More sales equals more profit right? Well, no, usually not. Sometimes a smaller number of well costed sales can be more profitable than a higher number of ill-considered ones. Understanding what drives the costs of the products or services you provide can be absolutely crucial in your business being profitable and successful. Or otherwise.
To many small business owners, the strategy is just to survive. While others have a plan. Sell for £10m in 5 years, grow to £5m of turnover and hand the business to my kids, incentivise my staff with shares in the company. All these things tend to have a lead time that is more than the twelve months the businesses budget covers and so we refer to it as more strategic planning. Indeed, if you want to sell your business one day, you need to start that planning process a good three to five years out to ensure you get maximum value and no claw backs.
One of the major obstacles to business growth can be funding. And one of the major obstacles to a business receiving funding is the poor business plan that is attached to the application for said funding. Over the years, Smith and Brown have held the hands of various businesses through the application process and ensured a robust plan is in place thus obtaining £millions in funding.
The term Management Accounting covers all the above activities and a variety of other things too. From reporting on a monthly basis the businesses performance against it’s Budget to putting together goal congruent incentive plans for staff, all these things fall into the term Management Accounting.
Outsourced Finance Director
Not all businesses require a full time Finance Director and most certainly can’t afford the salary of one either! Smith & Brown can provide outsourced Finance Director services which can include any or all of the above as well as a more hands on approach to dealing with external agencies such as banks, solicitors, HMRC, customers and suppliers alike. Therefore providing you with all the benefits of an in-house Finance Director at a fraction of the cost. If you feel that this would be advantageous to your business, please contact us and we will work out a programme that suits your requirements.