8 Step Business Improvement Programme – What’s Included?
We help you to make your numbers work, so that you can earn more with less effort and keep more of what you earn. A good accountant can save you money. We believe our Business Improvement Programme will help you develop your business and achieve further success.
So what is included?
Based on the research of what the UK’s successful businesses do every year, and developed over recent years, we offer you a Business Improvement Programme built around the principles of our 8 steps.
- Would it be a problem if your vision wasn’t aligned with other stakeholders? Do you know their plans? Could independent facilitation help explore these factors?
- Does your profit forecast consider the impact on your balance sheet and cashflow? Can you rely on your management information to make those key business decisions?
- When comparing your actual performance to budget, do you delve deeper into your numbers beyond the headline figures? e.g. What activity makes up your turnover and profit?
- Are you measuring the right numbers that influence your performance or provide a timely wake up call? What are the factors that truly influence your success and how are you accounting for them?
- Have you seen the benefits of comparing your business against your competitors or the trends in your industry? Where could you improve?
- If you’re not clear about what you really want from the business, how will you end up where you want to be, or know you are there? Are your goals at the heart of your decision making?
- Are you aware of how your performance and non-financial factors impact your business valuation? Are you in danger of negatively impacting upon it?
Here’s a little more information, but we invite you to meet with us and discuss what each step really means for you.
A company that really cares about giving the best service at a reasonable cost rather than just taking your money.
Step 1: Decide what you really want to achieve
Do you know what you really want to achieve and then plan what activity needs to happen to help you get there?
We encourage our clients to start their planning with the end in mind and we work with business owners, just like you, to really understand your business objectives and personal goals.
The objective at this key stage is to understand the purpose of your business and how the desired success that you deserve will be achieved, whilst identifying those key factors that helps drive your motivation, decision making and strategy.
What motivates you? What do you REALLY want?
From experience, once this is known, you can then effectively consider the key issues including your Value Proposition, Customer Interaction & Relationships, your Team, your Partners, Cashflow, Key Activities and Time Priorities.
If you know your vision, either short or long term, then how will you actually achieve this? As we know, the devil is in the detail!
How do you currently forecast what your business is likely to do? Do you sensitise your forecasts with ‘What if’ scenarios? What are the key performance indicators you need to be measuring?
Once you have considered the vision and desired direction, we recommend that you understand and map out the real numbers that will impact on your success. This will provide you with the clarity of the activities to be prioritised in your business that need your time, attention and commitment. With such clarity, you will also know when you are distracted from your plan or when your valuable time has been hijacked.
Our planning and forecasting support enables you to create a detailed and effective forecast with relevant reports that help you manage the business, make key decisions and plan for the future. Our forecasts will show you more than just the profit outcome, but also reflect the impact on your balance sheet and cashflow.
Step 2: Measure how well you can actually perform each month
Do you measure your performance on a regular basis? If so, is it just a routine exercise or does it truly impact on the decisions you make in your business on a daily basis?
Once you have established what you want to achieve and planned what you need to focus upon, then it is critical to continually measure your performance, understand your actual numbers achieved versus your forecast and understand the outcomes around your key performance indicators.
We encourage you to continually review your management reports and ensure that you have the right detail to help you measure the key drivers that matter for your business.
What tools do you use to analyse performance? Does your reporting method reflect on your preferred observation style such as using visual graphs or by a detailed written analysis?
How often do you review your performance?
Hopefully more than once a year, simply on the production of your accounts, as this step enables you to react to situations in a timely manner and not when it is too late or when the opportunity has potentially been missed.
At CRM we have a saying “Turnover and Profit are only outcomes of other activities”. We encourage you to measure the detail and identify what is influencing your headline numbers to then understand what continual, marginal improvements will ensure the numbers work in relation to your objectives.
We look to share our experience and expertise to reflect on the numbers that keep you on track to achieve your objectives. We work with our clients to produce a regular summary of your financial performance with management accounts information and performance reports.
Step 3: Measure your full year’s performance
On completion of your annual accounts, of course it is a time to remain compliant with the requirements of HMRC and, if applicable, Companies House.
On review, do you have any unexpected changes to your year end accounts? If so, do you understand why?
If you are measuring your business on a monthly or quarterly basis, then there should really be no surprises when your year-end accounts and tax summaries are produced.
Here at CRM, we will explain your accounts in plain language to ensure that you are able to interpret the numbers in your accounts. As part of our commitment to helping our clients ‘Make Your Numbers Work’, we ensure you understand your profit and loss summary, balance sheet content and the impact on your cashflow. For example, extending your debtor days and not collecting the monies owed to you will not directly impact the profit forecast, except some hidden staff costs chasing the money. However, what about the balance sheet impact and of course that critical cashflow, that may influence decisions for the business.
The accounts we produce can help you easily assess whether you are on track to achieve your long-term vision and objectives, whilst ensuring you are managing the business to make the profit you desire.
Step 4: Evaluate your performance by comparison to previous years
Are you evaluating your performance by comparing last years outcome to your previous years?
We recommend that you evaluate your financial performance using a range of financial ratios and analyse any trends.
Do you monitor any ratios in your business?
We recommend using ratios to help you reflect on the true picture, whilst considering any underlying factors. For example, you may see your turnover and profit increasing, which may be your objective, but if you had monitored the Gross Profit Margin, then you may have seen a slip in the margin attained and therefore could have achieved a greater bottom line return.
This evaluation step of our unique 8 step process, will clearly show how the business has performed year on year and help you better understand what has influenced the changes.
We have produced an article covering the common ratios measured by businesses like yours. However, these may not all be relevant for your business and encourage you to evaluate the numbers that impact your performance.
We work with our clients to provide business owners like you with a clear picture of your overall business performance rather than simply seeing if the headline numbers have increased or reduced.
Step 5: Evaluate your performance by comparison to your industry
How do you compare against your competitors?
How did your industry or sector perform last year in comparison to you?
We encourage you to evaluate your performance by comparing your business to others in your industry or sector.
At CRM, we help our clients to benchmark their business against other similar businesses and compare your key performance indicators against those in the same line of work.
Such benchmarking can be very informative and can often provide you with a focus area for small changes in the business that can lead to a big impact in your performance.
Other business owners like the ‘fact’ of knowing if you had a good or bad year compared to others in your industry or sector, if only to support that gut feeling.
Step 6: Consider the value of your business
How much is your business worth?
Often not enough to stop and sell today! So, what can you do to influence this valuation?
When do you consider the valuation of your business?
We find that it is rarely considered by business owners unless they have an exit or sale in mind. Often the consideration of a valuation can come too late in any sale or succession consideration, as it is often not considered that it can take time to create the value desired.
Do you consider how your recent performance has impacted the valuation of your business?
Do you consider both the financial and non-financial factors that have influenced the valuation?
We encourage you to analyse the business to appreciate how the recent financial performance may have impacted the valuation and how non-financial factors, such as the reliance on the owner or systemisation, can also influence the value.
What non-financial factors influence your valuation? You? Your management team? Your systems and processes?
You may not be planning to sell your business soon, but continually preparing your business for sale drives good day to day practice.
There are a number of different ways to value your business and we are happy to discuss what may be the most relevant for your business. Different valuation methods will be influenced by different factors and different numbers in your business, so it is important to know which is most relevant to you and your industry or sector.
We suggest that, year on year, you use a consistent valuation method to demonstrate if the recent activity has influenced the value of your business and understand how or why it has increased or decreased.
Our clients tell us that they find this extremely useful as a guidance of progress, especially if the business value is their wealth creation and likely to be their exit plan or future pension fund.
Step 7: Calculate how much more profitable & valuable your business could be
How much more profitable and valuable could your business be?
Do you ask yourself this question regularly enough or are you just too busy to step back and consider this?
From our research and experience, this is often an area that most business owners want to do, but many often put off due to other considered priorities. As an outcome, although the business may still perform well, it could have missed opportunities to develop, increase profits or avoid the unexpected.
Do you complete any sensitivity analysis of your business considering a range of ‘What if’ scenarios?
What would happen to your business if you lost your best customer or your best team member? What would happen if a cost increased by 5%? What would be the impact of increasing your sales by 20% when also considering all related costs?
We recommend that you review your business regularly using a sensitivity analysis. By reflecting on the ‘What if’ scenarios that could impact your business, then it is very likely that you will find certain improvements that could make a difference in your business. This could be more sales, the improvement of your margins or driving lower costs. However, at all times we suggest keeping in balance, your objectives, your team, your customers and your suppliers.
The improvement potential of your business may be just a few simple changes that help to improve your profit and your cashflow.
Step 8: Establish a performance improvement plan
From your analysis of the business, you have established a vision of what needs to change in the business, but we all know this is never easy to action.
Do you know how you are going to make the changes that you want, actually happen?
We encourage you to establish and implement a performance improvement plan. The objective of this plan is to simplify the considerations and reflect on the what, who, how and when. A good plan will generate the actions for priority, provide a management tool for review and provide responsibilities with accountability.
A plan will also provide you with a continual focus of how you can Make Your Numbers Work in your business for your ongoing success. It will also consider, in balance, all the factors in your business including you, your people, customers, suppliers, objectives etc.
We want all our clients to be successful and see this step as a fundamental stage in our unique 8 step process. Often there is a barrier to change, so we work with our clients to establish an improvement plan and consider how this can be practically delivered in their business on a step by step basis.
Download Our Free Workbook
Much more than just accountants.
For a flavour of the programme considerations, you can download a copy of our workbook based on these 8 steps
Why Work with CRM?
We are a team with the balance of commercial awareness and the expert, technical knowledge you would expect to support your business.
We come highly recommended by our existing clients.
We are committed to Making Your Numbers Work for your success