Yesterday, Chancellor Jeremy Hunt presented his second Autumn Statement, but with a very different tone to the gloomy announcements made this time last year. The Chancellor announced initiatives with a massive focus on pushing growth in the economy. The main question you’ll all no doubt have is… “how does it affect me?”, let’s take a look…
How do you know if your business is on the right track?
2 February 2023
Mark Friend
Structuring a Business, Building a Business
Building a great business isn’t easy. If it was everyone would be doing it! But how do you know if you are on track to building a great business?
Are you measuring the size of your bank balance only to be disappointed 12 months down the road when your accountant tells you the tax bill and you see the balance disappear?
How about measuring sales? Sales are going up and up. However your bank balance is going down and down and you are not quite sure what is going on. You know you are busier but something just doesn’t feel right!
How about the number of employees you have? Surely the bigger the team the more successful the business?
Individually of course no one figure can tell the full story. In fact for every business there are usually at least 6 or 7 key figures which if measured will give an indication of performance. These are known as KPIs- key performance indicators.
It could be figures such as turnover, gross profit, net profit, your bank balance etc…
You could also consider ratios such as profit margins, sales per employee or debtor days.
It could also be a figure not even in your accounts such as the number of enquiries you have from your website, your conversion rate of enquiries into orders etc…
You can then review these figures on a regular basis to monitor progress.
But is this enough for Business Growth?
You have the figures but where are you now compared with where you thought you would be say 12 months ago?
This is where your business plan comes in and why having a good business plan can really make a difference and ensure you are on track.
When you sit down to do your business plan you need to go through the whole process:
- Make sure your mindset is right. Are you ready to take action?
- Agree your purpose, your goals and put into words your vision – the business you are going to create.
- Be clear about the staff you will need by creating an organisational chart and writing down what your culture is like.
- Consider what marketing to do- your budget and the return you are expecting from your investment.
- Look at what key systems you will need to put in place to make the plan a success.
- Then create the plan starting from the destination and working back to the next 12 months and what to do in the next 3 months.
- Then put in place the tools to measure performance – a budget, a cashflow and a scorecard bespoke to your business.
- Finally you need to monitor performance and understand where you actually are compared with where you expected to be and what actions you need to do next to keep on track.
Sounds simple? Unfortunately this is where most business owners fall down. It makes sense but it is just too complicated and difficult to do. It’s easier to plod on with no clear plan and simply monitor one or two KPIs to ensure that things aren’t going badly. But they have no idea where they are compared with where they could have been with a well-documented plan.
A well-documented plan will provide clarity for you and your team, will galvanise you into action and accelerate growth as you will be clear about exactly what you need to do and by when to grow your business.
This is where we can help. Why not spend a whole day with us creating a business plan. We can work with you to monitor progress and help implement many of the changes you may need to build a successful business. We can help make sure you are on the right track.
If you need help to grow your business please speak to your account manager for more information. If you are not a client of Friend & Grant but are interested in growing your business whilst retaining your existing adviser then please contact Mark Friend or Andrew Grant to find out more.
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