The end of a financial year is an appropriate time to do some thinking and planning as to what is happening in your business. A good place to start is – What is the purpose of my business?
How much do you want to earn? How many hours are you prepared to work? What is your overall objective?
- Are you trying to build up the business to sell it?
- Are you wanting to franchise or open other similar offices/stores in other locations?
- Are you wanting to build a lifestyle whereby you can employ managers to run the business, but you don’t have to be there every day?
- Are you operating a business that you want to operate for the rest of your life… because you absolutely love what you’re doing in your business?
The strategies you develop to operate your business will be determined on which of these questions you’ve answered positively. If you’re building your business so you can franchise it or replicate it in other locations, then it’s very important that you create very detailed systems, manuals and strategies so that the business can be easily replicated and managed by other people.
If you’re building a business to sell, it’s also necessary to ensure that systems are in place, that your team is adequately trained and that the business can run without your day-to-day presence, as a potential purchaser might not want to work in fulltime and will want to know that the team can continue to operate the business without you. Have you recorded everything that’s in your head? Have you documented the business’ intellectual property system? If you’re wanting to build a lifestyle business, you also need to introduce systems so that the business can operate effectively without you being involved on a day-to-day basis. You need to have systems that you can review weekly to satisfy yourself that the business is on target.
This will require a system of controls built around the preparation of:
a weekly profitability estimate
key performance indicators; and
having internal staff who can produce accurate information assisted by your accounting firm acting as Chief Financial Officers to produce detailed monthly financial accounts.
If you’d like our assistance in implementing appropriate systems and controls and conducting internal reviews of the business’ systems please contact us.
