Are you spending enough time working on your business strategy?

Past research from The Alternative Board found the average entrepreneur spends 68.1% of their time working ‘in’ their business (tackling day-to-day tasks, putting out fires, etc.) and only 31.9% of the time working ‘on’ their business (e.g., long-term goals, strategic planning).

Revisiting and updating your business strategy is vital for a growing business – and that means making more time to focus on strategic thinking.

Key things to revisit in your current business strategy

Test your financial scenarios, cashflow and budgeting:

Stress-test your cashflow by creating worst-case scenarios and adjusting your operating budgets to reflect the current rising costs for raw materials or labor. Look for any non-essential spending and set clear targets for preserving your cash levels and working capital.

Revisit your customer value proposition

Re-evaluate your customer value proposition (CVP) to confirm it still meets the changing needs of your market and target audience. This might mean simplifying your product offerings, adding a high-value service tier or putting money into deeper customer research and development.

Diversify your product/service offerings

Diversify your products and services to help you engage with new or underserved customer segments. Reducing your dependence on a single revenue stream stops you ‘having all your eggs in one basket’ and helps you reduce the overall risk to the business.

Match talent and resources to your growth strategy

Review your team structure to make sure your key talent is focused on growth and high-return activities.

Putting money into targeted up-skilling and training can improve your overall capabilities; while outsourcing to fill any critical gaps will help you capture new opportunities.

Helping you create a viable business strategy and growth plan

If you’ve not revisited your business strategy in a while, now’s the time to get proactive. Talk to our team and we’ll work with you to review, revise and rework your strategy.

The following content was originally published by BOMA. We have updated some of this article for our readers.

Turning a profit will be high on your list of goals as a business owner.

And if you want to generate the best margins, that means keeping an eye on the money that’s going out of the business, as well as what’s coming in.

So, how can your accountant help with this?

The days where your accountant just did the bookkeeping, compiled your accounts and filed your tax return are well and truly over. Modern accounting firms are far more interested in helping you with your financial performance, your business strategy and offering flexible value-add services that put you in better control of your finances.

If you partner with the right accountant, we can save you money – in both the short, medium and long-term. And that’s good news for the growth of your business.

Keyways your accountant can enhance your financial health

The less expenditure you have as a company, the bigger your profit margin. It sounds incredibly simple, doesn’t it? – The smaller your costs, the larger your profit. But if you’re not fully in control of your financial management, it’s very difficult to know WHERE you’re spending money, and WHY you’re not achieving your profit targets.

This is where working with a finance professional adds a huge amount of value. Your accountant helps put you back in the driving seat of your finances – and that’s never been more needed than in the current economic climate.

So, what specific things can your accountant do and what will the impact be on the future of your business?

1. Tax advice and planning – tax costs can be one of your biggest outgoings as a business, so we’ll focus on getting your tax planning under control, applying for all the relevant tax incentives and ensuring you minimize the taxes on your profits. By paying only what you’re legally required to pay – and making use of any reliefs – we can significantly cut your tax spend in the business.
2. Cashflow management and advice – ‘Cash is King’ may be a cliche, but it’s true. Unless you can balance the cash inflows and outflows from your business, you’ll never have the liquid cash to pay your bills, cover your payroll costs or cover your operational expenses. We’ll show you where money is going out, and coming in, so you achieve the ideal positive cashflow position.
3. Cost control and spend management – to improve your cashflow, you need to reduce your cash outflows. An important way to do this is to focus on cost control and spend management, reducing your expenditure, removing unnecessary costs and negotiating better deals with your suppliers. The more you cut costs back, the better your cashflow will be and the easier it will be to thrive, grow and become more profitable.
4. Forecasting and financial modelling – when we understand the key financial drivers in your business, we can build you a full financial model. This allows us to change the variables, run different scenarios and forecast the various future paths of your business. Being able to project these numbers forward gives you a clearer view of the path ahead – and that’s invaluable in the challenging economic times that we all face at present.
5. Better management reporting and information – your decision-making stands or falls on the information you have available to you. We provide detailed management accounts, breakdowns of key metrics and forecasts of your cashflow, spending, aged debt and revenue – all of which helps you to save money, make sound decisions and keep the revenues flowing into your business.

Talk to us about cutting costs and boosting profits

Rather than running your business on a wing and prayer, by working with an accountant you get a clear picture on your business financials. We’ll help you cut unnecessary costs, optimize the most profitable parts of the business and increase your overall return on investment.

Let’s talk about how we can work together to support your ongoing business profitability.

The following content was originally published by BOMA. We have updated some of this article for our readers.

Understanding the financial management of your small business is a vital skill as a business owner. And it starts with an awareness of two fundamental concepts: income and expenditure.

Grasping the difference between what comes in, and what goes out, is crucial for your financial health, making informed business decisions and the overall survival of the company.

Let’s break down the basics.

1. What is income (revenue) and how do you generate it?

Income, often called revenue, is the money your business earns from its core operations, before any costs are deducted.

This income comes primarily from selling your goods or services to customers. Whether you’re selling handmade crafts, offering consulting services or running a local café, every sale contributes to your income. You may have secondary sources of income as well, such as rental income from property, or interest you’ve earned on your business savings.

The goal is to maximize your income streams through effective sales, marketing and excellent customer service. This ensures you have a steady flow of cash coming into the business.

2. What is expenditure (costs) and how do you manage these costs?

Expenditure, or costs, refers to the money you spend to operate, trade and generate your income as a business.

This expenditure can be direct costs, like the raw materials for a product, or indirect overheads, such as rent, utilities, salaries, marketing, and office supplies.

Effectively managing these expenses is vital for your cashflow and profitability. Keeping your spending under control means reviewing your outgoings, negotiating prices with your suppliers and distinguishing between essential spending and discretionary expenses.

Careful cost control ensures that your hard-earned income isn’t eaten up by unnecessary outgoings, helping you take care of the financial health of the business.

3. What is a profit and loss report and why is it important?

Your profit and loss (P&L) report, sometimes known as an ‘income statement’, is a crucial financial document that summarizes your business’s income and expenditure over a specific period (e.g. a month, quarter, or year).

Your P&L report directly accounts for income by listing all revenue generated at the top. Below this, it details all the associated expenditures, categorized for clarity (for example, cost of goods sold, operating expenses, administrative costs etc.).

By subtracting total expenditures from total income, the P&L report ultimately reveals your business’s net profit or loss for that period. This gives you a clear overview of your financial performance during a specific period.

If you’re new to financial management, getting your head around the ins and outs of accounting can be a complex task. But it doesn’t have to be rocket science.

Come and talk to our team. We’ll be happy to explain the importance of income and expenditure and how these metrics are represented in your P&L report.

The following content was originally published by BOMA. We have updated some of this article for our readers.

Whatever kind of business you own and run, your operations will have some form of environmental and social impact on the land and communities around you.

Being a good business owner means being aware of this impact and putting structures in place to minimize the negative outcomes. This is where Environmental, Social and Governance (ESG) strategies become a vital part of your business plan.

What are Environmental, Social and Governance (ESG) reviews?

ESG stands for Environmental, Social, and Governance. ESG gives you a framework to manage the risks and opportunities related to your sustainability and ethical practices as a business. This framework helps you reduce your negative environmental impacts, strive for more sustainable processes and take an ethical approach to running the business.

Let’s break down each of the three areas:

E (Environmental): Environmental reviews focus on your company’s impact on the planet. This will include analyzing your energy use, waste management, pollution levels, conservation of natural resources and your overall carbon emissions as a business.

S (Social): Social reviews look at the human impact of your business, including how you manage relationships with your employees, suppliers, customers and the wider communities where your business operates. This includes analyzing areas in the business such as workplace rights, diversity and inclusion, human rights and consumer protection.

G (Governance): Governance reviews take a microscope to how you run and manage the business. This can include assessing your leadership of the business, the internal controls you have in place, how you manage executive pay and the rights of your shareholders. In a nutshell, governance is about how you lead the company, how transparent you are and whether business decisions are made in a fair, open and ethical way.

Why should your small business be concerned about ESG?

ESG isn’t just a checklist that only applies to large, corporate organizations. ESG is just as relevant for small and medium-sized enterprises (SMEs), giving you a powerful tool to refine and expand your business growth, risk management, cost reduction and company values.

Here’s a breakdown of where ESG could be helping you run a better business:

1. Attracting and keeping talent and people

You can prioritize the social pillar by offering fair wages, good working conditions and career opportunities to your employees. This makes you more attractive as an employer and improves the happiness, motivation and satisfaction levels of your workforce.

It’s also beneficial to have a diverse workplace, with more voices and cultural viewpoints helping you to reduce any cultural bias and make more-informed business decisions.

2. Improving your customer loyalty

Increasingly, consumers and business clients prefer to buy from businesses that align with their own values, especially around sustainability concerns. Failing to meet your customers’ environmental and social expectations can lead to a drop in sales, revenue and overall customer loyalty.

To boost this loyalty, it’s important to be transparent about your environmental and social practices, and to do everything you can to be a leader in these spaces.

3. Driving cost savings

Looking for ways to cut your energy usage isn’t just good for the planet. It also helps you cut your spending on energy bills and put more money back into growing the business.

Applying the ESG framework to your operational activity helps you optimize your energy usage, reduce waste and shift your focus to more local suppliers. This can directly lower your operating expenses, helping you stretch your working capital and improve your cash position.

4. Accessing capital, funding and investment

Large investors, financial institutions and business lenders are increasingly including ESG factors in their funding decisions and outlook on potential investments.

Having strong ESG practices in place makes your business a more attractive proposition to investors and lenders, making it easier to access the funding you need to expand. A robust ESG strategy reduces risk levels and opens the right finance channels when you need them.

5. Keeping your supply chain sustainable

ESG doesn’t stop with evaluating your own results as a business. It’s also vital to understand the ESG credentials of your suppliers and how they measure up against your own values.

The last thing you want as a brand is to be linked to ethical or environmental violations. Be sure to carry out ESG reviews of all existing and potential suppliers in your supply chain and work only with those that meet the required values and levels of transparency.

Managing your regulatory and reputational risk

Good governance isn’t a ‘nice to have’. It’s a vital part of running a business that sticks to its values and meets all the required regulatory and compliance rules.

This means being an ethical boss who leads from the front, as well as being transparent about your financial management, supply chain management and environmental impacts. It’s also key to managing your reputational risk, preventing legal issues and safeguarding your brand.

Helping you review and enhance your ESG strategy

Environmental, social and governance concerns are a fundamental part of managing your business. And, as with most areas of running a business, it’s important to have a workable strategy and clear advice around how to maximize your ESG tactics.

Book some time with our team to talk through your current awareness of ESG and how we can help you create and refine a workable ESG strategy.

The following content was originally published by BOMA. We have updated some of this article for our readers.