Why you should have a budget.
Human’s have an amazing ability to solve problems. Powerful goals and a clear strategic direction help focus brain power of teams towards achieving the right outcomes. Let us help you build a strong business plan that is backed with performance measures and financial goals that motivate your team and help you achieve your goals.
Poor cash management is often credited as one of the major reasons behind business failure of startups and small businesses. The first step you can take to make sure this doesn’t happen to you is to have a detailed annual budget/operating plan in place. It’s more than just looking at your existing cash burn rate, its about preparing a detailed financial plan. This requires thinking through all of your businesses cost drivers and revenue assumptions and building a budget that has your expenses increasing as revenue grows.
A detailed budget provides your management team, board and investors with tool to measure performance and understanding how your business plans translate into financial success.
Here’s how our financial models are used
What is the impact on cash if you employee an extra period, what does a small change to the time it takes recover outstanding debtors mean to your business, or how does revenue change when growth increases. With a financial model you can test these scenarios and more, helping you identify what changes mean for your business. Know where to make adjustments to steer your business back towards goals.
MANAGE CASH FLOW
Achieving break even is more than just covering costs, it’s making sure you have enough in the bank to cover low sales months such as the summer holidays. A robust financial model helps you identify cash burn months and ensure you have enough cash to cover them.
A financial model is a key component of the capital raising process. Investors use the model we have built to see how well you understand the drivers of your business and test the assumptions you have made. We can help you prepare a dynamic financial model complete with P&L, Balance Sheet and Cash Flow statements. These three way models are ready for you to present to investors.
Get started building a budget?
Are you ready to make sure your business has a great financial plan, one that helps you manage capital, one that allows you track progress against goals and one that helps you raise capital?
Complete to form below to organise your free consultation so that we can get started making your business great.