Growth in Adversity

Some financial institutions would lead us to believe that we are entering a new cycle of the recession, the ‘double-dip’, however others suggest we are entering a period of growth – who to believe? No matter what the situation, sound business planning can help you achieve growth and improve profitability. Companies have been able to take advantage of lower borrowing costs, the demise of competitors and availability of experienced staff to survive and even thrive in what seemed an impossible position a few months ago.

What you should consider to support your growth in profits....

Cost management
A thorough ongoing cost review is advisable, you may find that costs are being incurred that were unknown, unnecessary or even that you are paying for the same product/service twice. Have you reviewed your
margins against industry averages? Should you be increasing your prices or searching around for cheaper suppliers?

Management information
Accurate and regular management information is a necessity, particularly when assessing the financial future of your business. Whether you are reviewing the viability of each of your current branches/products or planning an expansion, accurate management information is the key to making the correct decisions. Monthly or quarterly management accounts should be looked upon as more important than your year-end financials as they give you the timely data to make key decisions about the business’s future. It is equally important to prepare forecasts so that the actual monthly results can be compared to the forecasts to assess how the company is trading on an ongoing basis.

Monitor Key Performance Indicators (KPI’s)
A KPI is simply a measure of performance by which your company measures its success, these will inevitably vary from company to company, but should be determined by management and reviewed on a regular basis. This will help the company to stay directed towards organisational goals and the overall business strategy.

Maintain a close relationship with your bank
As a company grows there is often a requirement for funding of working capital. Approaching your bank to ask for finance for a new project, new product line or diversification requires a sound Business Plan. As lending criteria have hardened, banks are looking to a well thought out and sustainable proposal against which they can lend. Reference to accurate historic management accounts will help the bank in considering any proposal. In addition they will insist on regular management information as a requirement of the lending facility.

For further information, please contact:

Tony Whiteway, Managing Partner Lancaster
01524 541200 twhiteway@clbcoopers.co.uk