Consider:
Take the time to review your business strategy as a whole and use a financial budget as a tool to reflect and manage that strategy.
The absence of a business strategy or failure to follow the strategy is an important issue which hampers a business achieving its potential in the SME market.
Each business will have its own unique considerations driven by its Industry, market position and stage in its lifecycle. There are a few common issues that all businesses should consider:
- Value drivers – What are the key value drivers of the business and how effectively are they being managed?
- Customers and clients – What does your client base look like, and how can you increase profitability and retention? This might involve reviewing your client list by fees, repeated work and loyalty, profitability, credit rating etc. and considering how well your customers are aligned with your strategy.
- Employees – Now is the time to review key employees’ performance and remuneration. The new Employee Share Scheme rules proposed in the latest Federal Budget may present an opportunity to develop a more attractive incentive programme.
- Market trends – Analyse current market trends and consider possible issues that may affect your business in the coming year.
- Competitors – What are your key competitors doing? How will this affect your market position? It is important to also consider emerging competitors as new technologies allow start-ups and significantly smaller business to “act big”.
- Marketing & Advertising – Often the first to go when budgets are tight, it’s important to review your marketing strategy to ensure that resources and investment are aligned with your business objectives.
- Products/Services – When was the last time you viewed your offering from a client’s perspective? Are there any complementary services or products you can or should be providing? What is the market life of your service or product?
Carefully considering these issues as a starting point will allow not only for a clearer business strategy but a far more meaningful budget. The budget becomes a true reflection of where the business is heading and its performance.
