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Why DNG Chartered Accountants should be part of your financial life

 

[19.09.2017]

Business planning for success

Business planning is vital to ensure your business grows and is successful. It’s important to regularly take stock of how your company is progressing. Here are some suggestions for issues you might want to address, although it’s often good to seek out the advice of your accountant and develop your plans together.

Rate your business as it is today

An obvious starting point is to examine the strength of your balance sheet and your level of profitability. Using cloud accounting software can aid you in this, which we will discuss in more depth later in this blog.

Look at your client relationships

Are your clients the right calibre for your business? What’s the depth of your relationship with them? Are they providing you with a recurring income or are you often forced to seek out new customers? Do your clients refer their contacts to you?

Examine your supplier relationships too

It’s worth thinking about how far you’re able to control the supply and price of any goods or services you need to conduct your business. It may not always be possible to pass price increases on to your customers.

Manage your cash flow

What control do you have over your cash flow and working capital? Do you have sufficient headroom? It’s very difficult to make long term decisions if you are struggling on a daily basis to manage cash. Do you have too much cash tied up in debtors and stock?

Write that business plan

This is about looking ahead and thinking about where you want to be and when. For example your goal may be to grow the business by a certain percentage over the next five years. You may be planning to pave the way for a successor, or you may be planning a different kind of exit. Whatever your plan this is the time to get anything unnecessary off the balance sheet and ensure that your ownership structure is appropriate. You may be able to produce a plan yourself based on your turnover, gross profit margin, net profitability and the amount of money you hold in the bank. However involving your accountant will allow a knowledgeable independent expert to challenge your thinking, contribute ideas and strengthen your position should you be looking to see additional finance or investment.

Use Cloud Accounting to plan

A cloud accounting application can be a great tool to help you manage your business finances. Typically it will include a dashboard which offers a clear summary of the financial position of your business allowing you to manage the important aspects of your business on the go. Cloud accounting gives you access to real time data. This means you are better equipped to make those important decisions helping you plan for the future.  Read last weeks blog which marks the start of our series on cloud accounting. For more information also visit our cloud accounting page and to read about the services we offer. Come back to our website next week where we will be publishing a blog discussing cloud accounting and its benefits in more depth.

Next steps for business planning

The real skill of running a business is managing the key areas outlined above over a sustained period. We would recommend that you speak regularly with your accountant to check on the progress of your business. In the meantime, a few hours of thinking time now could prove invaluable in the years ahead. If you would like to discuss your business and planning for the future contact us and we will be happy to help.

Andrew Clifford

 

 

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