How to Ensure You Achieve Success in Business
It can be said that repetitive practice, attention to detail and thinking ahead are critical to achieving success in business.
Retirement or an exit strategy from a successful business for most people will hopefully happen once and for the first and only time in their lives. As with most things in life, that we do for the first time, there is the potential to make mistakes. However, unlike other potential mistakes in life, mistakes in business, may be a lot harder to recover from.
Whilst the future can never be predicted and there will always be unexpected changes, which can never be planned for, many business owners do not have clear visibility of the performance of their company and the direction in which it is heading.
Proper planning holds the key to successful running of a business and the eventual potential exit.
Therefore, for those businesses that are starting out or even those that are mature and growing, the importance of setting budgets and forecasting and planning for all eventualities should be highlighted.
There can sometimes be a honeymoon period that lasts a few months at the start of any project but the most financially stable businesses have a budget and a forecast. This will help plan and predict cash flows, manage sales pipeline, track performance against targets and mean confident strategic decisions can be made.
A cash flow forecast is imperative, as this will give a good handle of when income is expected and when bills can be paid and any subsequent tax payments arising too. To make sure the company is not put in a difficult situation when a quarterly VAT bill is due for example this can be planned for on the forecast in conjunction with the pipeline monies due. The forecast is agile and will change throughout the year as your knowledge of the businesses position and pipeline changes.
Business owners will struggle with creating simplified templates that are easy to maintain and establishing a budget in the first place. We have also found that whilst we all have the best intentions, monthly review of the budget variance report and revising the forecast don’t happen often enough.
Businesses often have multiple systems for sales pipeline, expenses, accounting, forecasting and budgeting and none are talking to each other. Spending money on growth is haphazard, as businesses often can’t easily predict cash flow over the next few months or years. That is why you need produce a budget and forecast which you will track and report on regularly, to ensure your success.
If you’d like to take the hassle off your hand and have us provide you with a template for your forecast and setup, run and report on the results, then sign up for a free consultation.
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