One of the hardest things businesses face is forecasting future needs and planning for growth. It requires knowing where you are today, and being able to pull back from a day-to-day mindset to envision the future and then figuring out how to get from here to there. It becomes even more critical for small and medium-sized businesses that often have tight cash flow, a slim margin for financial error, and limited strategic capacity. As we head into 2017, it’s the perfect time to step back and focus on operational and financial planning and develop a roadmap for longer-term growth.
Here are five key considerations to help move your company forward:
1. Envision your growth over the next couple of years and consider what your organization would look like. Document how growth will impact people, procedures, customers, partnerships, products and services, and the type of processes and systems you need to have in place to support growth.
2. Ask your team the right questions to monitor the health of your company and position it for growth. How well have you been meeting sales forecasts? What success have you had entering new markets or introducing products/services? Will you have the working capital needed to support growth – hiring, capital expenditures, new space, etc.? Do you have access to the capital needed?
3. Don’t wait to put processes and systems in place to support your growth. Not only will this infrastructure give you critical information and insight into your business from the start, but it will also be easier to implement when the speed of your business is slower. You should also plan for scalability so your system can grow with you, and establish an infrastructure that provides full, real-time visibility across your organization.
4. Determine how you can improve efficiency now. For example, look at your accounts payable operations, evaluating the level of effort associated with approval and payment. Could it be streamlined? Are there opportunities for automation? On the accounts receivable/sales side, evaluate how you are billing customers, the volume of sales you anticipate and how you are getting paid. What type of infrastructure do you need to automate and streamline these processes? Overall, are these processes scalable? What impact would changes have on cash flow?
5. Position yourself and your team as growth advisors, not transaction processors. Make sure you are monitoring and analyzing the right information to help management be more effective and make more informed decisions. For example, monitor and analyze profitability, customer acquisition costs and budget variances, among other operational and financial metrics. Consider how sales compare by region, by month and year, and by product or service. Determine the areas you need to track on an ongoing basis as well as the metrics and reports you need to support your management team.
CPAs and accounting professionals can serve as strategic business advisors by providing corporate management with key information and insights. For example, with real-time views across business operations and finance, they can help identify critical business issues, trends and opportunities, share in-depth analysis into business operations and finances, and forecast where the business is heading. By establishing processes and infrastructure as early as possible, they will not only be able to help assess how the business is doing day-by-day, but also help chart a course for future growth. As we head into the new year, there’s no better time than now, to help make it a year of growth.
Originally published on November 22nd, 2016 by Accounting Technology: http://www.accountingtoday.com/accounting-technology/news/5-ways-to-become-an-architects-of-growth-79940-1.html