Advanced Strategies For SME Growth
Advisory Services News - Issue 73
Good day!
Welcome to this update on ESS BIZTOOLS ADVISORY SERVICES NEWS.
ADVANCED STRATEGIES FOR SME GROWTH
Businesses that wish to grow or “scale up” need to have embedded Systems into their business activities so that the processes are implemented on an ongoing basis, not spasmodically.
The need for Business Systems applies from a basic start up to every type of business that wants to grow because without Systems unfortunately the business will probably fail.
The “scaling up process” which has been promoted by American business leader Verne Harnish author of “Scaling Up” clearly identifies the necessity for Systems to be implemented for a wide range of business activities primarily relating to:
STRATEGY – EXECUTION – CASH
The generally accepted starting turnover for companies wishing to “scale up” is $2 million, but it is very important that SMEs are encouraged to implement “Systems” from the beginning of their business operations. This will give them “firm foundations” on which to base their vision for their business.
The Growth Plans beyond a $2 million turnover definitely require Systems to be introduced.
Who is going to assist small businesses/companies to introduce the required systems?
The obvious group of professional advisers are accounting firms who have an interest in supplying services to SMEs.
The theme for the consideration of Advanced Strategies to be discussed in a complimentary webinar on Thursday, 6 March 2025 is “Advanced Strategies For SME Growth”.
The System Process should commence with a “detailed overview of the business operations” probably in far more depth than what your firm has conducted as part of your firm’s knowledge of how a business operates for income tax purposes.
BUSINESS EVALUATION TO UNDERSTAND THE BUSINESS – 1 INCH WIDE/1 MILE DEEP
Incorporates a range of Business Systems including:
- Corporate Chart identifying the business operations
- Personnel Chart
- Internal control systems
- Suppliers’ identification, ordering, deliveries
- Purchase order processing
- Receipt of material/products
- Authorisation of payments to suppliers
- Raw material storage and storage records
- Production planning
- Inventory of parts to be utilised in the production process
- Labour planning for the production process
- Completed stock records
- Sales – products – pricing – invoicing
- Debtors’ system
- Risk identification and determination of policies
52 WEEK BUSINESS ENHANCEMENT SYSTEM
The implementation of this System is an acknowledgement that business activities continue throughout the year and business operators require ongoing financial input throughout the year.
Daily Report – who to prepare – training – distribution – monitoring of the daily reports prepared.
Weekly Profitability and Analysis Report – establishment of a system for the preparation of these very important reports.
Monthly Report – Profit and Loss Account for each individual operation – Analysis of Key Performance Indicators and Business Metrics – Comparison Actual Performance to Budgets.
Analysis of the Balance Sheet and review of the Key Driver Subaccounts – raw material inventory – completed stock – debtors – creditors – capital expenditure projects – research and development.
WEEKLY PROFITABILITY AND ANALYSIS REPORT
- Report to be prepared for each operation
- Establishment of weekly distribution of overhead costs
- Calculation of wages and wages on-costs each week
- Stock on hand calculation
- Net profit/loss for each operation
- Key Performance Indicators for each operation
- Management review of performance and financial results
- Investigation of any abnormal results to determine strategies to guard against similar variations in the future
EARLY STAGE INNOVATION COMPANY
An already incorporated company under section 708 of the Corporations Act that meets the legislative guidelines can qualify for the status of being an Early Stage Innovation Company which potentially makes the company attractive to investors because the investors receive an “incentive” from the Australian Government, if they invest in a qualifying company, whilst the benefit for the company is that the “incentive” has assisted the company to raise capital.
MANAGEMENT ACCOUNTING
Guidelines and supporting documentation for calculations of:
- Financial Statement Ratios
- Profitability
- Business strength
- Cash cycle
- Operating efficiency
- Guidelines optimising profit, making the business stronger, identification of strategies to increase cash funds availability
- Business structures – identification of differing taxation treatments
- Break Even Calculations
- Guidelines calculation of break even and results of various turnover adjustments
- Case study on Break Even Calculations that you could utilise to explain break even calculations and price adjustments to your clients
- Profit Planning/Cash Budgeting
- Guidelines for identification of cash movement within the business – debtors’ days outstanding – creditors’ days outstanding
- Cash flow generation within a business – discussion paper
- Explanation of the working capital cycle – profit planning
- Cash Flow Forecasting – cash vs accruals
- Preparation of cash budget graph
- Process notes to guide clients on profit planning/cash budgeting understanding
We are presenting a complimentary webinar on Thursday. 6 March 2025 at 10.00am AEST to present an overview of 5 of the key systems included in ESS BIZ TOOLS:
- Business evaluation to understand the business
- 52 Week Business Enhancement System
- Weekly Profitability and Analysis Report
- Early Stage Innovation Company Capital Raising
- Management accounting to assist your clients to survive and thrive!
Together with a brief overview of the Advanced Package developed by ESS BIZTOOLS to assist accountants to deliver a range of Financial / Commercial / Management Accounting Advisory Services to assist your clients
To attend this complimentary webinar please log onto www.essbiztools.com.au – click on webinars.
If you would like to have a discussion on how the ESS BIZTOOLS Financial / Commercial / Management Accounting Advisory Service Package could be implemented for your firm please send us an email or Telephone (07) 4724 1118 and we will arrange a complimentary 40 minute Zoom meeting with you and your colleagues.
