To the blog for small and medium sized business (SME) owners.

Wednesday, March 28, 2007

The Benefits of a Finance Director in a Small Business

There are several benefits a finance director can give to a business owner. If a part time finance director is appointed the cost advantage is attractive, without the loss of the available skill set, should it be required at a future time.

The finance director should also:

· Release the owner from financial management of the business, enabling more time for the owner to work developing the business

· Provide control over the business finances, implementing adequate controls, preparing results and reporting to the Board

· Become actively involved with the management of the business

· Liaise with financial institutions, and other stakeholders

· Mentor the business owner as required

· Ensure modern business practices are followed

The Changing Role of the Finance Director in Small Business

The role of the finance director continues to change and different work aspects may exist for the finance director dependent upon sector and company size.

In small businesses it is not uncommon for a part time finance director to be appointed, with a brief to manage the finance function, prepare accounts and reports and generally be a mentor to the business owner. When a business is growing it may be financially restricted and unable to afford the services of a full time finance director, indeed in such circumstances it may be unlikely that sufficient work would exist to occupy an incumbent on such a basis.

Read More.

Barriers to a Business Turnaround

A business turnaround may be inevitable to ensure survival. The business may be in decline or simply out of control, with many opportunities to add value missed.

Business owners have an understandable aversion to asking for help in managing their organisation. This may be due to:
• Embarrassment at the perceived failure of the owner in the eyes of others
• Reluctance to accept that the business does need help
• Inability to identify warning signs
• Fear that their own position may become untenable
• An attitude of ‘ma┼łana’

When is the best time for a business owner to seek expert help with a business turnaround?

It will never be too early to supplement skill sets that may be lacking in an organisation, but act before it is too late. Regain control of your business – be proactive and seek professional help with your business turnaround.

10 Steps to a Successful Business Turnaround

10 Tips on How To Manage The Receivables

1. Be proactive – actively chase all outstanding debt and adopt a structured process
2. Invoice the correct selling price, quantity and tax amount
3. Ensure the invoice address is correct
4. Document your credit control policy and procedures
5. Issue a copy of your terms and conditions of sale, including your credit control policy, to customers and seek a signed acceptance by the customer of the terms.
6. Credit check all prospective customers
7. Set credit limits for all accounts
8. Check that the value of all new sales orders received will not exceed the customer’s credit limit
9. Raise sales invoices promptly
10. Review all outstanding debt on an on-going basis, and take recovery action when necessary

Manage Your Business Cash Flow

Tuesday, March 27, 2007

Business Turnaround

There are occasions when a business may enter a period of decline. If the downward trend is not recognised at an early stage and corrective action taken, the business owner may have to seek, or be forced to engage, an expert to oversee a business turnaround initiative.

Action taken at an early stage in the decline phase will undoubtedly be less painful for the business owner, both from the workload and finance impact.

Should the decline reach a stage when concerns are raised by investors or financial institutions, it may be that the third party appoint its own business turnaround expert in order to protect it's interests.

When a business turnaround professional is appointed, what steps are taken to ensure a turnaround success?

Read more on the actions taken in the business turnaround process.

Monday, March 26, 2007

Financial Plans

There may be a desire to develop a financial forecasting model, using spreadsheets, on cost grounds. Whilst the up-front investment price of a proprietary financial forecast model will be avoided, care should be taken to ensure the total cost, including your own time, of developing and updating your own model does not exceed that of purchasing proprietary software.

Remember a financial forecast including profit and loss, balance sheets, cash flow, and funds flow is a complex model and will require much time to develop and test.

Thursday, March 08, 2007

What is a Consultant?

A consultant is a person, either working independently or with others, who sell professional advice. It is common to find that each consultant will have an area of specialism and will be viewed as an ‘expert’ in that field.

Read more on a Consultant.

Wednesday, March 07, 2007

Business Performance Management

Businesses must generate profit which in turn can be substantially converted into cash. Cash is the lifeblood of the business and without strong profits the future funds available for re-investment will be diminished.

Many business owners believe more sales generate more wealth for the business, however, the detrimental impact more sales may have on the business may not be understood. Higher receivables, higher stocks, overtrading all consume cash and may jeopardise the business. The chart offers guidance on key everyday aspects of business life to help the business owner achieve better than break even.

Discover more on how you can improve your business performance mangement.

Saturday, March 03, 2007

Business Strategic Planning - Do you Plan?

To achieve success it is essential for business owners to plan the direction in which they wish to take their business.

A clear business strategy is necessary to provide focus to achieve the owner's business and personal goals and more importantly identify how the strategic goals are to be achieved.

The business strategy should include:
- the direction that the business will take
- how it will develop
- the resources required to achieve the goals

and the business strategy must be relevant to the business core objectives remembering that the business strategy is an on-going process, to be regularly reviewed and updated to reflect the changing environment in which the business works.

If you would like to learn more visit the Business Strategy section on the DAW Consulting website.

Friday, March 02, 2007

Inheriting The Family Business

Imagine you will soon inherit the family business. Will it be a gift or a burden? Are you equipped with the necessary skills to successfully carry on the business or would you prefer to let the opportunity of business owner pass?

How do you commmunicate your wishes to the family without upset? Read more.

Thursday, March 01, 2007

Joomla! Open Source Presentation

David Willetts was invited by Open Advantage Birmingham, United Kingdom to present at their Open source software event on 28th February 2007.

The presentation centred on the journey taken in the development of the DAW Consulting website and the part Joomla! has played - from purpose written software; to the postnuke platform and finally using Joomla!