As nice as it is to have a growing business I have heard more than once the statement –‘Why don’t I have any money when my sales are increasing and we are busier than ever?’
A growing business needs careful management.
You need to plan for growth
You may feel that in the past you have had no requirement to put a business plan in place – this is something you do when you are setting up. Isn’t it?
A business plan should be updated annually
You will need the following in place -Timely, accurate and meaningful information presented in an easy to understand format.
Weekly Information (daily at times of stress in your business)
- Bank Balance – incorporated with this is a rolling weekly cash flow (daily cash flow at times of business stress)
- Overdue receivables
- Overdue payables – including statutory obligations such as BAS liabilities, Superannuation payments, Payroll Tax
- Weekly sales figure
- Monthly and year to date profit and loss account – viewed against prior year and budget – graphed
- Annual cash flow updated
- Staff and payroll costs analysis
- Sales forecast – what is the conversion rate?
- Key Performance Indicators – KPI’s. You may have heard accountants talking about these, but in reality, for your business, there will be a small number that you need to focus on. These will be unique to your business, and will depend on what business sector you operate in and you will need to monitor these on a monthly basis.
- Expense monitoring
On an annual basis you should be doing the following:
- Taking at least a day out from your business to focus on what has happened in the last 12 months and where you want to go in the next 12 months.
- Set goals to focus on for the next 12 months.
- Update your 12 month business plan / forecast.
All new businesses that have been established for more than 2 years will get a free ½ day seminar focussing on the business plan – If you don’t have one you need one!