By James Nicholson-Smith, Business Development Director & Managing Principal, West Midlands Region, The FD Centre
Many businesses will have had to make some significant changes to their strategy during 2009/10, and now is the time to reflect on these and see what has been missed, whilst at the same time, looking to stabilise the business in preparation for moving forward in 2011.
We asked Colin Mills, founder and CEO of The FD Centre, the largest provider of part-time FDs to small and medium sized business (SMEs), who provides part time FDs to SMEs, to provide a checklist for businesses on how to “stabilise” for the future:
1. The best businesses know exactly where they stand. Does your financial reporting provide you with an accurate view of the financial performance of your business within a short period from each month end? These should contain:
• Historic balance sheet, profit and loss and cash-flow together with a set of key performance indicators (KPIs) that the management team use to run the business on a day to day basis.
• Rolling forecast balance sheet, profit and loss and cash-flow driven by the same KPIs
2. Have you analysed all of you products or service offerings and identified those that should be invested in and those which should be scaled back to improve the performance of the business?
3. Have you reviewed all of your costs and identified all of those costs where alternative suppliers can be identified and current deals can be renegotiated? This helps to minimise your cost base and refine your negotiation skills.
4. Have you reviewed all of your customers and identified the good ones from the bad ones ie those that take ages to pay etc? Use those negotiation skills to make the most from your customers.
5. Have you assessed all of the obvious risks in your business and made sure that you have a contingency plan in place to avoid those with the highest likelihood and most significant impact?
6. Do you have a clear operational plan for the future of the business broken down to show you the steps required to implement that plan? If you do not have this it will be impossible to identify those opportunities that arise next year that fit your plan for the business.
Colin Mills comments, “Most of our clients have been through this process during the last 18 months. As a result many are now looking to exploit the opportunities to expand their markets and recruit key staff to help drive their businesses forward in 2011”.
To get your business in the best shape for 2011, contact the FD Centre at www.thefdcentre.co.uk - The FD Centre is the UK’s largest provider of part-time Finance Directors and are dedicated to helping businesses meet their strategic objectives. Find out if your business could benefit from a free FINANCIAL HEALTHCHECK and receive valuable advice for your business’s financial planning. For more information, visit www.thefdcentre.co.uk
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