Business Growth
Strategic Planning
Even established businesses need to consider their future direction and how to get there.
We can assist you in preparing your strategic business plan using an established simple template that streamlines the process and produces a clear, meaningful plan that can be used both as a road map for management and the basis for raising debt and/or equity capital.
Budgeting and Forecasting
Budgeting should be part of the business planning process but even businesses without a written business plan need to see where they are going and take control of their future.
Profit and loss and cash flow budgets, when properly done, show management how their existing policies will affect profitability and cash flow. A projected balance sheet will show the financial position of the business at the end of the budget period in terms of solvency and gearing.
Most businesses in growth phase need increasing levels of working capital, as more funds become invested in inventory and debtors. All businesses, but particularly growth businesses, need to prepare budgets in order to see how much funding will be needed to support the business in the medium term. The cash flow budget will show the bank balance or overdraft at the end of each month in the budget period and will therefore indicate what level of finance facility will be needed throughout the period. This budgeting then allows you to approach your financier well in advance of the funding requirements and have facilities in place before the cash flow crunch.
We are able to assist by:
- providing standard budgeting templates; assisting internal accounting staff to prepare the budgets, and then providing a review and analysis with management;
- using software which applies a ‘what if’ analysis to instantly show you the impact of a range of strategies to improve profitability and cash flow. This is a very powerful and simple tool and is particularly cost effective when used in conjunction with our recommended standardised accounting systems; and
- working directly with management to produce the budgets.
We can also provide capital budgeting services to assist management in deciding whether to invest in high value equipment or any other projects involving major expenditure.
Finance Applications and Banking Relationships
Growth businesses need increasing amounts of working capital. If this working capital is not available the business may cease to grow, and even fail completely.
It is vital to have flexible finance facilities in place to meet anticipated growth and to have the right banking relationships that will partner the business along its growth path.
We have established key relationships with business banking managers who are happy to personally manage the finance needs of even small businesses and provide them with the advice and facilities needed to grow; whether it is debtor finance, overdraft, leasing or commercial bill facilities.
Raising Equity Capital
It is common for fast growing businesses to have growth potential beyond the limits of traditional debt funding.
We can assist in evaluating and sourcing the most appropriate form of funding in these circumstances; from private equity, business angels and domestic and international venture capital.
Family Business Constitutions and Succession Plans
We offer services to meet the special needs of family businesses. In particular, we recommend that all family businesses have a family business constitution.
A family business constitution includes but is more than, a succession plan. It covers all areas of interaction between the family and the business, including:-
- family participation in decision making;
- how family salaries are determined;
- family entitlements to dividends, loan accounts and benefits;
- how family employees fit into the organisation chart;
- hiring and firing policies for family employees;
- equity (ownership) and management succession;
- equity buy-out arrangements – who can sell and in what circumstances;
- policies in relation to compulsory sales of equity and the triggering events;
- valuation principles for these sale;
- estate planning and
- dispute resolution procedures.
In addition, the constitution should also record the family’s consensus on what it expects of the business, and not just in financial terms. It should also establish the values and ethical standards that the family wants to have reflected in the business, allowing the family culture to be incorporated into the business and providing a foundation for management.
One of the major tasks in preparing the document is to anticipate and provide for all possible scenarios. By spending time, individually and collectively with the family and using questionnaires we are able to identify the source of existing and potential conflict. While all family constitutions will generally cover the same basic issues, each will differ and some issues will be more important to some families than others. While we start with a standard format, each family’s constitution is tailored to its unique circumstances and personalities.
We maintain objectivity, while still dealing with sensitive issues and make sure that all possible areas of conflict are tabled, discussed and resolved. We have expert understanding of the financial and legal issues involved to make sure that decisions can be practically implemented and won’t result in any unwelcome legal or taxation consequences.
The benefits of going through this process are that family members and management of the business all know where they are going, the potential for damaging conflict in the business is minimised and, above all, family harmony is maintained.
Government Grants and Support
We can assist businesses to identify and apply for government support and concessions, including:-
- export market development grant
- research and development tax concession
- Victorian government export programs
- other Federal and State Government programs
Business Growth Program>
Our growth program focuses on the issues that need to be addressed by new and growing business.
It is a simple program that steps out the actions required to become an established, professionally operated and efficient business within a short time frame.
The program can be undertaken over 3 years, or sooner, depending on your objectives.
It starts with the basics (see Getting Started Solutions) and works through to preparing the business for sale or for an outside investor. The basis of the program is to build the value of the business by:
- maximising profits
- minimising risks, and
- maximising potential
It ensures that the business has
- a sound financial base;
- a clear practical business plan;
- a real sustainable competitive advantage
- strategy to fund growth
- efficient IT and other systems;
- maximum legal and contractual certainty in regard to its key relationships;
- maximum protection for intellectual property;
- timely and accurate management reporting;
- sound, professional corporate governance;
- a succession plan that is practical and articulated;
- risk management procedures;
- complied with regulation;
- growth funding in place;
- shareholder agreements; and
- an agreed exit plan.
We are happy to prepare a growth program tailored to the needs of each business and its owners.
More Information
Sue Prestney
Principal - Family Business Services
t: +(61)3 9521 3000
Dani Di Blasio
Manager
t: +(61)3 9521 3000
