With the start of a new calendar year, now is a good time to take some time to reflect and assess where your business is headed in 2016.
2016 is already shaping up to be a difficult time for businesses due to the deteriorating world economy and the talk of another world recession, with some economists predicting another GFC. I am a little more optimistic and feel that governments will contain the risks arising from the financial market turbulence.
However, we continue to see the business world change at a rapid pace. The number of small businesses failing is rising, certain industries are vanishing with new ones taking thier place, data needs are increasing and technology becoming more and more sophisticated. As such, for your business to survive and succeed here are 5 areas to review to ensure your business is ready for 2016.
1. Review your results
With half the financial year past, now is the time to review how your business has performed in the last 6 months. Results tell business owners a story. They allow you to review what worked, what didn't work and what your trends are. The power of knowledge is invaluable.
Real time results allow you to make informed decisions about the business. Is sales growth actually adding to the bottom line? What's happening with your cash flow? What are the trends in customer spending? What is happening with your overhead expenses? Are your margins increasing or decreasing? What are the important drivers in your business? Where are your new customers coming from? Knowing these results is the start of being able to take action. Do you need to work on your top line sales or is it more important to concentrate on the efficiency of your business? It is also important to test various scenarios to ensure you are aware of the impact should certain events occur. What if interest rates dropped suddenly or if you lost your largest customer? How would these impact your bottom line and your cash flow?
2. Work out what you want to achieve in 2016
Results are great but planning is just as important. Many small to medium businesses fail to plan adequately or plan at all. If you are one of those businesses which do plan, take some time to pull out your strategic plan and assess what you have acheived and what is still yet to be achieved.
What is there still to achieve in 2016? Growing your customer base? Add another product or service line? Be an employer of choice? Having a target will give you something to work towards. Without one you will just be riding the roller coaster that is small business. And you will leave yourself open to the possible failure. You need to ensure you have your KPI's set and ready to measure.
Focus, Focus, Focus. It's the only way to ensure you stay on track. You need to be reviewing your results on a regular basis and at a minimum monthly. With the accounting systems now available to small business this is the easy part with most offering real time reporting.
By staying focused, you can take action straight away and resolve any issues in your business or even change your plan. Start with the list of things you want to monitor and ensure you build reports into your system that will produce these with the click of a button.
4. Business process improvements
So often I see business grow quickly or business processes become to complicated or business owners and managers not delegating or outsouring non core tasks.
Take some time to review your business processes and consider what you can eliminate, automate or delegate. By doing this it can make significant improvements to your business and not just financially.
5. Think, learn and innovate
The most important thing in business is to constantly think about what you are doing and learn from your results. What was the outcome of the improvements you made? What could you have done differently? What's happening in your Industry? What are the opportunities for your business in the future? What are your customers really after?
Start to ask questions. Start to brainstorm. Start to read and research. Start to involve employees and create an environment where innovation is encouraged and rewarded. Sometimes great ideas in business can come from your employees. Start and innovation workgroup. And start to take action.
So 2016.....are you ready?
CFO Access is a boutique and bespoke advisory firm specialising in providing Virtual CFO services to SME's. We are able to provide experienced CFO's and Finance Directors on part time or project basis.
We know how SME's operate and what they need. We act as real business partners, we listen, understand the business, understand the issues and determine the way forward with you with practical, objective advice.
So if you or your business need CFO Access to help with what you want to achieve in 2016, or to be your virtual CFO or for a specific project, please contact us on +61 249 262 618 or email us at email@example.com.