Elliot Jackson
Business & Financial Consultant
Doing Business the Right Way
The pace of business today dictates that companies have to be more innovative
in their approach.
One of the most important factors in determining success is the way in
which businesses plan ahead.
Know how your business will look in the future!
The financial shape of your business in the future will mirror the strategic
plan. The strategic plan should reflect and respond to everyone's thinking.
Once the strategy is agreed, the finances will fall out. Looking ahead
will pay enormous dividends later on.
• Look at the financial implications both from the top down and the bottom up.
• In practice it will be as helpful to know what costs you need in order to achieve your targets as well as knowing what income you expect and then build the costs accordingly to give an acceptable profit.
• As well as forecasting the profit and loss, you also need to estimate what your Balance Sheet will look like. What will your capital expenditure plans be?
• Once the Balance Sheet forecast is completed, you can look at the cash flow forecast. There will many high and low points over a period of time and you need to know when they will be.
When you are happy with the Strategic Plan and the finances it produces, you can then set more detailed short-term forecasts.
Most importantly make sure that you know what your business is going to look like. It won’t always work out (you may well exceed your plans) so be prepared to revise regularly.
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