The beginning of a new financial year is the ideal time to focus on financial business strategy, with experts suggesting businesses target three main areas – finances, culture and operations.
According to Elliots Group Managing Partner Matthew Schlyder the planning process should begin with setting out business objectives.
“Businesses should first decide what their targets are in three main areas – financially, culturally, and operationally. Once they have recorded some targets, they can then work on their action plans to reach those goals.”
Next, look at developing a revenue strategy. According to Schlyder, this can be the factor that most influences business success.
“A revenue strategy is built around the revenue growth concept of increasing your customers, increasing the transaction frequency of when they buy from you, increasing the average sale each and every time they buy, and increasing the efficiency of your systems to drive margin improvement.”
Businesses must develop action plans that impact each component of revenue growth, including product, marketing, sales, production, delivery and client relationship management.
Cashflow is another factor that affects the profitability of business. Schlyder suggests focusing on strategies that decrease the time between buying stock or completing a service, and getting paid.
Another consideration is the balance of time between the day-to-day running of the business and scheduling time to review the financial plan, with Schlyder suggesting businesses block out at least half a day every month to review the business performance, the effectiveness of action plans, and develop new goals.
“A structured and focused approach brings rigour to your management strategy, and will result in effective implementation.”
Lastly, it’s important that business owners involve their teams. If the team understands the business goals, they can work towards them.
“They are the ones on the front line after all. Involve them in your business planning and this in turn will give them some accountability toward the overall success of the business.”
