If you were like us, anyone who watched our President’s speech last month kept an eye on most of the Northern Hemisphere’s implementation of lockdown. We were all worried about the South African regression back into tighter restrictions. For most of us, this would have meant devastation to our economy and our businesses.
How do we get certainty when we can’t control or don’t know what will happen next month, let alone next year?
Many of us are heading towards our Financial Year End. This means Financial Forecasting and target setting for another year of our business.
You might have had enough and simply wanted to down tools, but here are a few things to consider that might convince you to put the time, effort, and thinking into forecasting and setting targets for your next financial year:
All forecasts and targets set are essentially guesswork. We have no certainty that these figures will come to fruition. However, we should have experience and history of what we have achieved during our business lifetime. We use this to set our financial targets.
THINK ABOUT THE PROCESS:
- set your sales target;
- plan the costs to produce your products or services;
- then, the fixed cost to support these efforts.
What happens in this process is understanding what it is going to cost the business to hit a particular target. Effectively, we now understand the needs of the business to achieve its sales targets. If we don’t know how to achieve our sales targets, we now have the opportunity to define a strategy to achieve them.
We pull our teams and employees in and influence them to get behind these strategies by defining our strategy.
Lastly, if anything untoward does happen (lockdown or policy changes), you now have a chance to make quick adjustments to protect your business. Reason being, you know what the cost is to keep your business producing and can adjust to what your new sales target is. Thus, allowing you to respond faster and with more clarity.
HOW WE CAN HELP YOU
OptiGrowth will be hosting 3 workshops assisting Business Owners through this Strategy Cycle and particularly – Understanding your Business Value, Building your Financial Forecast, and Developing a Bullet Proof Strategy.