Take control of your business
Business, strategic, marketing and cash flow planning
Cash flow is the most important issue in my business
Do you agree? Many of our other clients do. In this uncertain economy, managing your cash flow is more important than ever.
If you are concerned about future trading conditions, then take some time to reflect on where you are and what could happen in the next few months. It is important for all businesses to plan ahead for a range of scenarios. Cash flow and business planning in these uncertain times may appear problematic, but there are some practical steps you can take to minimise potential disruption to your business:
We specialise in helping our clients manage their cash flow. We do this by preparing and updating detailed cash flow forecasts using the latest and most powerful software. We can also help you negotiate or renegotiate overdraft facilities and find specific funding to help you grow!
Please talk to us about cash flow planning for the next few months. We can offer a template so you can do this yourself or work together to produce estimates for a variety of scenarios.
One of our director's Mark Johnstone talked to Thive, a local business community regarding how to financially forecast and budget in such a fast-moving business environment. Click here if you would like to watch the presentation.
Please do talk to us about helping your business plan forward and protect cash flows, our most successful clients know that the best way to predict the future is to create it!
We live in uncertain times and planning for the future is challenging. Rather than paying attention to what you can’t do, focus on what you can do. For example, when restaurants couldn’t serve customers indoors, they transitioned to delivery, take-away and outdoor dining. Regardless of the type of business that you manage, this is the mindset to develop and use for your 2023 business strategy.
Your “can-do” business strategy should start with a list of what is possible. Perhaps you can transition to doing business online, research new markets, or utilise the shift to video conferencing to create a new and more personal experience for your customers while they are in the comfort of their home. Once you have considered what you can do, you can then create some strategic objectives for the year ahead.
Consider how you can shift your business strategy to one that is more customer centric. The best businesses are those that deliver added value to their customers. For example, you could provide new payment options to customers in order to encourage them to make a purchasing decision. Your customers will be more focused on cash flow due to the prevailing economic uncertainty, so offering structured payment plans, 12 months interest free credit and so on, could make your firm more attractive than your competitors. Consider Klarna the innovative 'buy now, pay later' payment plans for customers. The key for businesses is that Klarna pays the firm for the product as soon as the customer makes their purchase.
If you are considering launching new products or services in 2023, you may need to extend the timeline. The world is not back to normal (whatever the “new normal” is) and supply chains are struggling with issues related to transportation, production backlogs, availability of materials, etc. As such, it would be prudent to allow some extra lead time in your plan for any new product or service launch.
With an uncertain operating environment anticipated to continue for some time yet, it makes sense to have a backup plan. As you develop your strategy, take some time to consider what potential contingencies you can put in place in order to be ready to move in a different direction, should you run into some headwinds. If you are unsure where to start, it can be helpful to research some of the tactics that worked for other businesses, even those that may be operating in a completely different sector. You can then apply the best bits of those tactics to your own strategic plan.
As you develop your business strategy, you will most likely identify some actions that you can undertake with certainty, which will help you to manage some of the risks that are inherent in operating in uncertain economic times. Perhaps you can bolster your firm’s cash reserves, reduce fixed costs, or negotiate better terms with suppliers. By proactively focusing on delivering against these actions, you will keep moving your business forward, which will help to make your firm more resilient in the medium to long term.
We were finally getting over the financial crisis when Covid struck. Then, in the trough of the worst economic downturn in 300 years, we discovered that recovery was driving the Financial Times Stock Exchange (FTSE) to new heights and the job market into a frenzy. In the wake of that, it became clear that the recovery was overheating and that we were facing a period of rising inflation and industrial action.
Russia’s war in Ukraine made things worse. It has not only meant human suffering, but it has also affected the entire global economy, driving up the cost of food and energy. It adds to the hardship for those on a low income and means serious food security risks in the world’s poorest economies.
Businesses of every size face challenges that are now suppressing growth. A business might have a great product or service, but without a strategic plan to help it define, articulate and communicate where it is going, it will be at the mercy of outside events. We encourage our clients to take some time to think long-term about their business and to establish goals or targets that you can control.
A plan starts with identifying and accessing opportunities within your market and should address how your business is going to evolve to meet the challenges of today and the future. The plan gives your business purpose and it answers questions about your long-term goals.
The first step is to look at five important areas:
Once you have taken some time to write out your plan and where you want your business to be in (say) 2 years, the next step is to work out a marketing programme with actions to make it happen.
A marketing plan is a business document outlining your marketing strategy and tactics. It is often focused on a specific period (i.e. over the next 12 months) and covers a variety of marketing-related details, such as costs, goals and action steps. But like your business plan, a marketing plan is not a static document. The plan should outline:
We specialise in helping our clients manage their businesses. We do this by preparing and updating detailed forecasts, using the latest and most powerful software.
Please talk to us about strategic planning. We can provide a template so you can do this yourself or work together with you to produce estimates for a variety of scenarios and help you take control of your business!
Below are a few examples of business resolutions; maybe they will help you think about your strategy for success in 2023.
Where does all the money go each month? You know about the big regular bills such as rent, rates, telephone and internet, suppliers, employees, tax, heat, and electricity, but for most businesses, budgets never quite seem to add up. Make sure you list all the little things such as sundries and other smaller expenses into your budget. Look through last year’s accounts to check you have every type of expense included.
Having a budget has become more important than ever. Resolving to stick to a set budget can be vital and could even mean that we have surplus cash left over at the end of each month.
A cash surplus is vital when running a business, because one of the most important things to avoid in 2023 might well be debt. Following the Covid-19 government support, debt was easy to get into, but hard to get out of. Remember, debt goes on costing money because it means interest payments each month. Your cash surplus could help pay off your debts. Resolve to pay off as much as you can, starting with any variable interest debt you have.
Reducing your debt feels as though you have had a cash bonus each month, because you no longer have repayments to make or interest to cover. It may be tempting to splash out, but if you resolve to save instead of spend, it could be the first step towards building resilience against outside influences to your business. In 2023, interest rates are on the up, making a savings account more rewarding.
Your pension is a special kind of investment, and thanks to the tax relief provided by the government, it could be the most rewarding you ever make. Resolving to make some extra contributions into your pension fund in 2023 could make a big difference to your wealth in the years to come.
Few predicted the Pandemic or the war in Ukraine and these types of events are outside our control. Who knows what 2023 will bring, so it is worth remembering a quote from the singer Celine Dion: “Life imposes things on you that you can’t control, but you still have the choice of how you’re going to live through this”.
It is a good idea to look at where you are now and plan for a range of scenarios “good and bad” so that you can be flexible about the direction you should take.
Ask us about our One Page Analyst, a “what if” scenario planner which takes your projected 2023 figures and allows you to work out the effect on profit of reducing expenses, increasing sales, increasing or decreasing prices.