Last month we looked at the steps business owners should take to start positioning their business for profitability in 2019: evaluating financials, policies and procedures, and employees against your long-term and short-term objectives. Now that you’ve completed that analysis, it’s time to prune what you don’t need to bring in more of what will generate growth (and profits).
Streamline company procedures. Are inefficiencies in your operation hurting your bottom line? In the end, efficiency leads to greater profitability, so look for excess steps in your procedures that you can cut. Keep in mind what your employees reported to you when you checked in with them about their responsibilities and their views of the business. Assess and rework your processes to improve workflow, create a more productive environment, and reduce employee frustration (and improve their job satisfaction). You may want to keep a record of the changes you’re making and revisit them quarterly to analyze results and adjust as needed.
Align those misaligned financial areas. Based on your ratio analysis and assessment of your company budget vs. actual figures, now is the time to act if you are not reaching your revenue goals. Cut back on excess spending (anything that’s not truly necessary or that is not serving the business in a positive way). It’s also time to determine why your revenue goals are not being met and consider allocating some resources to business-building endeavors such as marketing at a trade show, advertising campaigns, or hiring a strong sales person.
Get the cash flowing. If cash flow is not where it needs to be, acton the outstanding accounts receivable right away and see what you can collect. Additionally, talk with your customers and vendors regarding payment terms to create a better cash flow balance; and, consider going for a business line of credit at your bank to help with seasonal fluctuations. If the cash is there, make sure it is a sustainable cycle, especially if you are ready to expand your operation. Being in a strong cash position will also help you get favorable terms if you do decide to go to a lender for any reason.
Write new policies and procedures. Remember those conversations you had with your employees? They probably had some great feedback as the people who deal with daily operations. Cutaway any outdated policies and update procedures that are relevant to the company you have today and the company that will be in the future.Just as the marketplace changes (and your company direction with it), remember that your employee handbook is not immutable and needs to change with the times as well.
Now is the time to build on the foundation you have today, for the company you want in the future (and the successful business owner you want to be). Working with an outsourced CFO can help get your financials in order, cut away what isn’t needed to improve your operation,and get your business on the path to profitability. Contact CFO Your Way at (973) 897-0650 or firstname.lastname@example.org get started.