Cashflow and cost control

More than ever, cashflow is a vital part of staying afloat, whether your business is in recovery or growth mode.

Revenue, profit, and your bottom line are always important, and in 2024, maintaining steady cashflow remains the foundation for keeping your business running smoothly and adapting to challenges as they arise.

Regular cashflow forecasts will help you keep that in focus. Here’s why:

Cost control  

If you can't reach your targets for income, reining in your costs may give you a little extra head room to manage cashflow while you plan your next move.

At First Class Accounts Ovens & Murray, our team provides detailed cashflow analysis and forecasting services, ensuring you have a clear picture of your financial position. With actionable insights, we help you identify areas where costs can be reduced without compromising business quality.

Visibility on outgoings 

Cost control can be a challenge when it’s hard to pinpoint hidden costs or where established ways of doing things cost more money than they should. You may also have been coping with unexpected expenses, as you’ve adapted your business for unplanned circumstances.

We can your financial systems and processes to identify inefficiencies. Our expertise in management accounting ensures your data is not only accurate but also timely, so you’re never left guessing where your money is going.

Improving business practice

It's more than just keeping an eye on outgoings (though that's important). It's about looking at each aspect of your business and business systems (or the gaps where there should be business systems) to see if poor practice is driving costs up unnecessarily.

Streamlining your processes can drastically improve your cost control. We work with you to implement appropriate apps to improve efficiencies, save time and money, and reduce costly errors.

It can be useful to break it down  

You can look at cost centres such as office supplies or freight. Or you can look at what those costs do for your business.

It can help to analyse costs in terms of cost of sale and overheads.

Cost of sale and overheads

Cost of sale (also known as Cost of Goods Sold or CoGS) is how much it costs you to make a sale. In a business which sells products, CoGS is based on the price paid for the product, plus any costs necessary to put the merchandise into inventory and make it ready for sale, including shipping and handling. You can even break it down to calculate the cost of sale of individual units.

Overheads are general business expenses. They can’t be tracked directly to sales. Overheads are what it costs you to open your doors (whether online or actual) every morning.

What’s your plan?

1. Reduce unnecessary expenses
   Now might be the time to trim every expense that’s not related to your core product or service.
2. Suppliers
   Are you able to work with your providers to ask for discounts or more favourable payment terms on either cost of sale or overhead expenses?
3. Talk to the team
   Analyse your costs and involve your team, including frontline sales staff.
4. Advertising
   It might be a false economy to cut back on advertising, as customers are online looking for bargains and price-checking alternatives. Targeted campaigns might work better.
5. Prioritise
   Can you pinpoint the products most likely to bring the fastest or best return and hold back on products that are a slower sell?
6. Promote or discount
   If you have old or slow-moving stock, can you discount it and convert old stock to cash? If you can attract customers now, you may be able to use it to spotlight your other products.

Making managing cashflow easier

Every dollar you can pull back from your costs can go straight into cashflow. Whether your sales are booming or slow, keeping your costs under control is key to sustaining growth and stability.

At First Class Accounts Ovens & Murray, we understand the importance of managing your cashflow effectively. From cashflow forecasts to systems that streamline your operations, we partner with you to ensure your business has the financial stability it needs.

Want to get a handle on cash flow in your business?

Whether your sales are boom or bust, you want to make sure that your costs aren't holding you back. We can help.

Talk to us if you'd like to review your costs and your systems to keep costs under control. .

Reduce your debtor days and improve cashflow

Managing the gap between the receiving money into your business and paying money out of your business is vital for sustaining viability.

So, how do you reduce your debtor days and improve your cashflow? Let's start with understanding debtor days. 

Debtor days is the average number of days taken for a business to receive payment for goods or services. Keeping track of the average number of days for a business to receive payment is important in understanding the cashflow gap you might experience and the impact on cashflow planning and budgets.

How to calculate debtor days

(Year-end receivables amount ÷ annual sales) x 365 days = average debtor days.

Here's an example: An IT consultant has in her terms and conditions that payment is due 21 days after invoice date. But she is interested to know what the actual average payment time is.

Trade debtors at 30 June 2019 = $35,000

Annual sales for 2019 = $478,000

(35,000 ÷ 478,000) x 365 = 26.7 days

With this information, she can either alter her cashflow planning according to the actual time-frame or take steps to reduce the average number of debtor days.

Here are ten things you can do to reduce the payment times?

1. Update your payment terms

Make sure the terms are clear on every invoice issued. Don’t forget to include bank details on the invoice!

First Class Accounts Ovens & Murray can assist in reviewing your payment terms and help integrate them into your invoicing software, ensuring consistent communication.

2. Regular admin

Schedule a regular time for your own administration and get your invoices out promptly.

3. Send to the right person

When you send invoices, make sure you address the email personally to your contact. Send the invoice to multiple addresses if possible, for example, your contact and the accounts department.

We can assist in setting up automated systems to manage your contact database, minimising errors in invoice distribution.

4. Use technology to your advantage

Use automated invoice reminders to notify customers when an invoice is about to be due and then when it is overdue. Do not wait to send notifications manually, let the software do it as soon as the invoice is a day overdue.

We can help implement the latest accounting software that includes automated reminder features, keeping your invoicing on track.

5. Make it easy for your customers

List the payment terms, for example, due in 14 days, as well as the actual due date.

6. Provide incentives for early payment 

For example, a 5% discount if paid within five days.

7. Offer several payment methods for clients

Adding options like credit card payments or online gateways such as PayPal makes it easier for clients to pay promptly.

We can advise on and set up various payment methods, ensuring integration with your existing systems.

8. Offer instalment payment plans over a mutually agreed period. 

This allows you to plan for part payments, rather than being inconvenienced by the whole invoice being paid late.

9. Do not offer unlimited credit to customers

Make sure your terms and conditions include the right to refuse further supply if invoices are outstanding. Request part or full payment before supplying more goods or services.

10. Talk to your suppliers

Maintain good relationships and clear communications so they are more likely to help you if you need an extension on your bills. If possible, renegotiate supplier terms that suit your business cashflow.

Take Advantage of Low-Activity Phases

During periods of lower business activity, take the time to:

• Update Terms and Conditions: Make sure they reflect your current business needs.
• Implement Alternative Payment Options: The more ways customers can pay, the fewer barriers there are to timely payment.
• Refine Business Systems: Use this time to review processes and find ways to improve them.
• Revamp Your Website: Ensure payment information and terms are clearly displayed.

First Class Accounts Ovens & Murray can support you in enhancing your business systems with app integration. We offer tailored advice on selecting and implementing the right apps for payment processing, invoicing, and cashflow management. Our services include ensuring seamless integration with existing systems to improve efficiency. We can also conduct cashflow analysis using app-based tools to compare your debtor days with industry standards, pinpointing areas where technology can help reduce payment times and optimise cashflow.

Talk to us about adding payment options, updating your software and improving business systems to assist in reducing the number of debtor days to improve your cashflow.

We can also look at average debtor days of your business compared to industry averages and discuss ways of managing cashflow during difficult periods.

Key numbers to focus on in your business now

As a business owner, it’s always been helpful to have an understanding of accounting – but in the world today, it’s never been more important to have a good grasp on your finances and understand the key numbers to focus on in your business.

For many businesses, priorities have changed, customer behaviours have mutated and revenue streams have had to evolve and pivot in order to maintain a profitable business model.

To track, monitor and drive your financial performance in this new business world, it’s increasingly important to have a handle on your key financial reports and metrics.

Getting to grips with your financial reports

In the past, extra cash in the business may have been seen as a surplus that needed to be spent on something. Recent years have shown us that having these reserves is vitally important for the survival and long-term health of your businesses.

To truly be in control of this cash, it’s vital that you can understand your accounts, financial reports and dashboards and ‘see the genuine story’ behind your financial position.

So, what are the key reports to focus on? Let’s take a look:

Budget 

Your budget is the financial plan that's tied in with your strategic plan. In essence, the budget is your approximation of the money it will take to attain your key strategic goals, and the revenue (income) and profits you hope to make during this period. It’s a benchmark you can use to measure your actuals (historic numbers) against, allowing you to see the variances, gaps and missed targets over a given period.

Cashflow Statement 

A cashflow statement shows the flow of money into and out of your business.

Understanding these cash inflows and outflows in detail allows you to manage this ongoing process, allowing you to aim for a ‘positive cashflow position’ – where inflows outweigh outflows.

In your ideal positive scenario, you have enough liquid cash in the business to cover your costs, fund your operations and generate a profit.

Cashflow Forecast

Forecasting allows you to take your historic cash numbers and project them forward in time.

As such, you can see where the cashflow holes may appear weeks, or even months, in advance. This gives you time to take action, whether it’s increasing your income stream, reducing your underlying costs, chasing up unpaid invoices (aged debt) or going to lenders for additional funding.

Balance Sheet 

Your balance sheet shows you your company’s assets, liabilities and equity at a given point in time.

In a nutshell, it’s a snapshot of what your business owns (your assets), what you owe to other people (your liabilities) and what money and profits you currently have invested in the company (your equity).

Your balance sheet is useful for seeing what stock and equipment your business owns, how much debt (liabilities) you’ve worked up and what your company is actually worth. This is all incredibly useful information to have at your fingertips when making big business decisions.

Profit & Loss

Your profit and loss report - often referred to as your P&L. Your P&L gives you an overview of the company’s revenues, costs and expenses over a given historic period of time.

While the balance sheet is a snapshot, your P&L is more like a moving video. It shows you how your finances are progressing by demonstrating how revenue is coming in and costs/expenses are going out (rather than cash coming in and going out, as you see in your cashflow statement and cashflow forecasts).

There is a range of software and apps that you can use to generate the above reports so you can understand and focus on the key numbers in your business. For example Xero. 

Talk to us about software and apps to help you with the financial reporting and forecasting for your business

Key ways to get more from your forecasting

During challenging times, many businesses see income either disappear completely or drop to dangerous levels.

To be able to navigate the future path of your cashflow, you need to start forecasting, so you can map out your financial position over the coming months and can take the appropriate action to safeguard your cash position.

At First Class Accounts Ovens and Murray, we understand the importance of proactive cashflow management. Our team helps businesses like yours implement effective forecasting tools, ensuring you can monitor your cash position with ease and take timely action when needed.

Forecasting your future cash pipeline

Having access to detailed forecasts helps you to scenario-plan, search for cost-savings and look for strategies that will preserve your cashflow position.

Remaining in control of the cash coming into (and going out of) the business is the real focus, so you can accurately predict your financial position and can resolve any issues.

Our team provides customised forecasting services, allowing you to see the full picture of your cashflow pipeline. We help you stay in control, so you can confidently manage both the inflow and outflow of cash.

Key ways to get more from your forecasting

Run regular forecasts

The financial landscape is changing on a daily basis at present. A cashflow forecast is not a document that remains static. Variables and external drivers are literally changing each day, so it’s vital that you run frequent forecasts and react swiftly to any projected cash issues as they become apparent.

Use the latest cashflow forecasting apps 

Cashflow forecasting apps, like Futrli, integrate with your Xero accounts, giving a drilled-down view of how your cash inflows and outflows will pan out over the coming months – information that will inform and justify the decisions you make during these extremely challenging times.

At First Class Accounts Ovens and Murray, we specialise in integrating the latest forecasting tools with your accounting software. Our team can show you how to use apps like Futrli to get detailed insights into your cashflow, so you can make informed decisions based on real-time data

Explore the right revenue streams

Most sectors will have seen their face-to-face sales drop to absolute zero since quarantine restrictions came into place. To overcome this, there’s a real imperative to explore revenue streams and new opportunities for income. An example of this is coffee shops that now sell roasted beans online (this will depend on lockdown restrictions). The idea is to find ways to increase the money that’s coming in the door and balance out your unavoidable expenses.

Get proactive with cost-cutting

If you can reduce cash outflows to a minimum, that will have a real impact on the health of your future cashflow. Pare back your operations and aim to reduce things like unnecessary software subscriptions, or over-ordering of basic supplies. Negotiating cheaper rates with suppliers, if possible, will also help.

Review your staffing needs

Now’s not the time to make anyone redundant, but you can look at ways to reduce the costs of staffing and resourcing. Reducing working hours or redeploying staff in different roles are all options that reduce payroll costs, while also looking after your staff’s welfare.

Run a variety of scenarios

Changing the financial drivers in your forecast model allows you to scenario-plan different strategies and options. Many of these will be in a long-term plan when restrictions ease. Scenario-planning lets you answer questions and will give you some hard evidence on which to base your decision-making and strategic outlook over the coming months.

Look at various ways to access funding

If forecasts show a giant cashflow hole coming up, you’re going to need additional funding to get through this crisis. We can assist your business to investigate funding opportunities from grants, banks, loan providers, alternative lenders and crowd-sourcing funders.

Forecasting is an important step to give you the business intelligence to support your decision making. 

By working with First Class Accounts Ovens and Murray, you’ll have the tools, insights, and ongoing support to ensure your cashflow forecasts are accurate and responsive to your needs.

Talk to us about setting up cashflow forecasting today. We’re here to help you stay in control of your financial future. Get in touch today.

How to use forecasts and scenario-planning

For centuries, accounting was all about reviewing historic information – but that only told you about the past, not what was going to happen in the future.

If you’re only looking back at past periods and historic numbers, that limits the insights you can achieve into your business. With a backward-looking ideology, it becomes difficult to plan, run through different scenarios or understand the path of the business.

Forecasting changes this. With the right data analysis and forecasting tools, you can project sales, cash, revenue and profits into the future – and get in control of your business.

At First Class Accounts Ovens & Murray, we understand that your business is dynamic, constantly evolving, and influenced by countless factors. We specialise in implementing forecasting apps, such as Futrli, that allow you to see beyond the numbers and into the future of your business. 

Our bookkeeping and app implementation expertise helps ensure that you’re using up-to-date, accurate data when forecasting, giving you confidence in the decisions you make.

A forward-looking view of your business journey

Forecasting switches the focus of your financial management. By moving to a forward-looking view of your business journey, you can see further down the road – and that helps to spot the opportunities and avoid the common business pitfalls.

By collaborating closely with you, our team at First Class Accounts Ovens and Murray can implement Futurli, or alternative forecasting apps to help you analyse trends, identify patterns, and anticipate challenges ahead of time. Our goal is to provide you with a clearer picture of what’s coming, so you can focus on making strategic decisions to grow your business. Whether it's sales, cash flow, or profit forecasting, our team is here to help you take charge of the future.

Forecasting adds value by:

Highlighting the data patterns

A forecasting tool takes your historic data and projects it forward in time. This helps you and your advisers to spot the patterns, trends, gaps and opportunities, revealing the true ‘story’ behind your business accounts. For example, forecasting may reveal a predicted seasonal slump in the next quarter, allowing you to plan ahead and proactively take action to minimise any negative impact.

Giving you a future view of your business

Instinctively, business owners will look back at prior periods to assess performance. There’s value to reviewing your historic actuals, of course, but using forecasting helps you to look forward, rather than just backwards. Forecasting is the satnav, showing you the road ahead, rather than the rear-view mirror showing you the road you’ve already travelled.

At First Class Accounts Ovens and Murray we make it easy to access this future view by integrating apps that generate future financial projections with just a few clicks.  This gives you a clear understanding of what’s next for your business, enabling you to allocate resources more effectively, plan for growth, and avoid potential pitfalls. 

Helping you scenario-plan

With a financial model of your key drivers, combined with accurate forecasting, you can quick answer your burning ‘What if…?’ questions.

Forecasting lets you run different scenarios, with different drivers, to see how business decisions may pan out over time. If option B performs better than option A, that’s invaluable information when defining your next strategic move.

Making informed, evidence-based decisions

Having ‘the full picture’ of combined historic numbers, forecasts and longer-term projections aides your business decision-making. Forecasting gives you solid evidence on which to base your strategy, and helps to red flag any threats that are looming on the horizon – giving you the best possible information to keep your executive team informed and on the ball.

We believe in making decisions based on evidence, not guesswork. That’s why implementing the appropriate apps can provide you with the data you need to inform your strategies. We ensure that your forecasts are based on accurate, up-to-date financial information, helping you make better decisions. Whether it's managing cash flow or planning for future growth, we give you the tools to act with confidence.

A deeper relationship with your accountant

Forecasting also helps us to get a far more granular view of your business. This helps to spot potential areas of performance improvement, and to give you the best possible strategic advice, all backed up by solid, empirical data and management information.

Take Control of Your Future with Forecasting

If you want to get in control of the destiny of your company, come and talk to us. Forecasting helps you highlight your future threats and opportunities – and create a proactive strategy to improve the performance of your business.

At First Class Accounts Ovens & Murray, we not only manage your bookkeeping but also help you implement powerful forecasting tools like Futrli. By connecting this app with your Xero platform, we can give you clear insights into what lies ahead. 

Our goal is to help you plan for the future, whether that involves managing cash flow, preparing for growth, or navigating uncertain markets. Whether you’re looking to grow your business, manage cash flow more effectively, or simply get a better sense of what’s coming, we provide the tools and insights you need to succeed.

Talk to us today to learn more about how forecasting can benefit your business and set you on the path to future success.

How Much Should You Charge?

Getting your pricing right is one of the best ways to plan for business success, but how do you know how much you should charge?

First, don’t make a rushed decision; take the time to properly understand the market, your total costs, and how to position your products or services.

Figuring out how much to charge is a big learning curve for any business owner. The answer to how to approach it will fluctuate as circumstances and markets change. It is important to revisit the question throughout the lifecycle of your business.

There is No Magic Formula

All businesses are unique, with an individual offering of products and services. Before you set your pricing, it’s important to look at the whole picture. This will help to ensure you are being strategic and not just following trends.

Gather the Data

To get started, you need to gather as much information as possible. Block out some time to sit down with your business data and strategies. Pricing is essentially figuring out where your products and services are positioned in the market. So keep your business strategies top of mind. It doesn’t have to be a confusing exercise. Just grab a coffee and get started.

Here Are the First Steps to Consider:

1. Record All the Costs Involved in Production

Start by listing all direct and indirect costs associated with your product or service. Direct costs include materials, labour, and production expenses. Indirect costs encompass assets, insurance, licences, and legal fees. This comprehensive list ensures you don't overlook any expenses that could affect your pricing strategy.

2. Consider Your Current Profit Margin or Required Margin

Once you have your total costs, think about your profit margin. Understand the difference between net and gross profit margins. Gross profit margin is the difference between sales and the cost of goods sold, while net profit margin accounts for all operating expenses. Decide what margin is necessary for your business to be sustainable and profitable.

3. Conduct Thorough Competitor Research

Research your competitors thoroughly. Understand the market landscape and what others are charging for similar products or services. Identify your unique selling points (USPs) that allow you to differentiate your pricing. This research helps you position your offerings competitively without underpricing or overpricing.

4. Evaluate Your Offerings

Assess the value-added aspects of your products or services. Consider where your offerings fall on the spectrum from cheap and no-frills to high-end premium. Can you create a range of products at different price points to cater to various segments of the market? This strategy can help you attract a broader customer base.

Revisit and Adjust Your Pricing Regularly

Market conditions and business circumstances are always changing. Regularly reviewing and adjusting your pricing ensures that you stay competitive and meet your customers' expectations. This proactive approach helps you maintain profitability and growth.

Additional Considerations

Understanding Customer Perception

How customers perceive your pricing can significantly impact your sales. If your prices are too low, customers might question the quality of your products. Conversely, if your prices are too high without justifiable reasons, you might drive potential customers away. Balancing perception with reality is key to effective pricing.

Value-Based Pricing

Value-based pricing involves setting prices based on the perceived value to the customer rather than the cost of production. This method requires a deep understanding of your customers' needs and how much they are willing to pay for the benefits your product or service provides. Value-based pricing can often lead to higher profit margins.

Psychological Pricing

Psychological pricing strategies, such as setting prices just below a round number (e.g., $9.99 instead of $10), can influence customers' buying decisions. This tactic can make prices seem lower than they actually are, potentially increasing sales.

Discounts and Promotions

Strategically use discounts and promotions to attract customers and boost sales. However, be careful not to rely too heavily on these tactics, as they can devalue your product and create an expectation for lower prices. Use them sparingly and strategically to drive short-term sales and customer acquisition.

Stay Ahead of the Game

Determining how much to charge for your products or services is a crucial aspect of running a successful business. By thoroughly understanding your costs, profit margins, market conditions, and customer perceptions, you can develop a pricing strategy that supports your business goals. Remember, pricing is not a one-time decision but an ongoing process that requires regular review and adjustment.

For more personalised assistance in developing a pricing strategy tailored to your business needs, contact us at First Class Accounts Ovens & Murray and Busy01 Consulting. We're here to help you navigate the complexities of pricing and achieve long-term business success.

Get strategy at the heart of your successful business

Putting strategy at the heart of your business activity should give you greater direction and focus and lead to stimulating, profitable opportunities. A well-thought-out strategy is crucial for navigating challenges and capitalising on opportunities.

Businesses that have clear objectives or goals, robust accountability, and a shared sense of purpose should always outperform those that just show up and go through the motions. This focused approach ensures that all efforts are aligned towards achieving common goals, thereby maximising efficiency and effectiveness.

The Importance of a Strategic Plan

Strategy lies at the heart of most successful businesses. 

To achieve this, you need to resource and execute with purpose. Unfortunately, few businesses have a strategic plan or a robust planning process. 

Changing this situation should be a top priority. A strategic plan not only provides a roadmap for your business but also helps in anticipating challenges and preparing for them.

Business Strategy Tips for Business Owners

To help you get started, here are two top tips for putting strategy at the heart of your business success.

1. Process Creates the Plan

Getting strategy at the heart of your success will require you to carve out some time, get a process started, and shake things up. There’s no better time to review and tweak your business model, future-proof compelling services, and get your strategic building blocks in place.

Just as every good strategy has key elements, every good plan needs a step-by-step process. In fact, the process is often just as important as the plan itself. 

A strategic planning retreat with your core team is a great way to start the process – find a spot offsite to get the creative juices flowing such as a beach, a park, or a vineyard, and set an agenda.

2. Key Elements of an Effective Strategy

The key elements in a good strategy normally incorporate:

• Vision: This is a statement that identifies what a company would like to achieve or accomplish. A clear vision provides direction and inspiration, helping to align all members of the organisation towards common goals.

• Values: These are the fundamental beliefs upon which your business and its behaviour are based. They are the guiding principles that your business uses to manage its internal affairs as well as its relationship with customers. Strong values build a solid foundation for organisational culture and decision-making.

• Objectives: These should be SMART (specific, measurable, achievable, realistic, and timebound). Having both short-term and long-term objectives ensures that your business stays on track and can measure its progress effectively.

• KPIs: Key Performance Indicators are measurable values that demonstrate how effectively a company is achieving key business objectives. KPIs help in monitoring performance and making informed decisions.

• Actions: These outline what needs to be done to meet the objectives. Make this simple and clear to ensure that all team members understand their roles and responsibilities.

• Owners: Delegating tasks to specific owners ensures follow-through and accountability. Assigning ownership of tasks helps in tracking progress and maintaining responsibility.

• Deadlines: Setting deadlines for when your actions will be complete ensures you make progress. Deadlines provide a sense of urgency and help in prioritising tasks.

It doesn’t need to be much more complicated than that, but do invest the time and effort in doing this right. 

A proactive, value-add strategic model will need fresh thinking, debate, research, and open conversations. Enjoy and embrace the process, and you should end up with a good outcome.

Implementing Your Strategy

Implementing a strategic plan requires commitment and consistent effort. Here are some additional steps to ensure successful implementation:

• Communication: Clearly communicate the strategy to all members of the organisation. Ensure everyone understands their role in achieving the strategic objectives.

• Monitoring and Evaluation: Regularly monitor progress against the set objectives and KPIs. Evaluate the effectiveness of your strategy and make adjustments as necessary.

• Flexibility: Be prepared to adapt your strategy in response to changes in the business environment. Flexibility is key to maintaining relevance and achieving long-term success.

• Continuous Improvement: Foster a culture of continuous improvement within your organisation. Encourage feedback and use it to refine your strategy and processes.

Seeking Professional Guidance

Great planning requires a guide, facilitator, and/or professional expertise to be as robust as possible. We can help your business and guide you through the steps. Professional guidance can provide valuable insights and ensure that your strategic plan is comprehensive and effective.

Putting strategy at the heart of your business activity should not only give your business greater direction and focus but also lead to stimulating, profitable opportunities. 

It’s time to get started on creating a strategic plan that will drive your business towards long-term success. By following these steps and seeking professional assistance when needed, you can build a solid foundation for your business and achieve your strategic goals.

Talk to us about how we can support your business strategy and help you achieve your objectives. 

Getting ready to exit your business

Selling your business is a significant milestone that requires careful planning and strategic preparation. 

To ensure you get the best possible return on your investment, it's crucial to have a solid exit strategy in place. At First Class Accounts Ovens & Murray and Busy01 Consulting, we specialise in helping business owners develop and implement effective exit plans.

When you sell up, you want your business to have as much inherent value as possible – so you get a good price, a great return on your investment and the best possible payout.

So, how do you take yourself ‘out of the business’ as the founder, add the best value and set up an effective and financially beneficial exit strategy?

Exit your business - add value to your company

Whether the goal of your five-year plan is an acquisition by a larger corporate, or selling your share of the company to a chosen successor, it’s critically important to focus on adding value.

The more attractive the business looks in the market, the better the price you’ll achieve, or the better the yield you’ll see on selling your company shares.

To drive that value:

Work on the business, not in it

Working on the business means you’re no longer a fundamental part of the day-to-day operations and can focus on the higher-level strategic elements. 

This means building a strong management team and delegating responsibilities effectively. It also involves creating systems and processes that allow the business to run smoothly without your constant involvement. 

By doing this, you enhance the business's attractiveness to potential buyers, who will see a well-organised, self-sufficient operation.

Invest in adding value

Keep profits in the business, reduce your personal drawings, and plough that money back into growth and investment. This might include upgrading equipment, expanding your product line, improving your online presence, or enhancing customer service. 

By continuously reinvesting in your business, you not only boost its current value but also make it more attractive to potential buyers.

Improve your financial health

By taking control of your finances and building a strong balance sheet, positive cash flow, and attractive profit forecasts, you make your business more appealing to buyers. 

This includes maintaining accurate and up-to-date financial records, managing debt effectively, and ensuring that your financial statements reflect the true value of your business. 

A business with healthy finances is more likely to attract serious buyers and command a higher sale price.

Have a proper exit strategy

Develop a plan that has agreed targets, so you can track and measure whether goals are hit, and a strategy your team can get behind. 

Your exit strategy should include identifying potential buyers, understanding the market value of your business, and setting a timeline for the sale. It’s also crucial to consider the tax implications of selling your business and to plan accordingly to maximise your post-sale benefits. 

Make sure your team is aligned with this plan to ensure a smooth transition.

Talk to us about exiting your business

If you’re looking to sell up, you need a plan. Come and talk to us about creating a workable exit strategy, with a clear focus on driving value and delivering a solid return on your investment.

Get in touch to build your exit strategy.

Selling your business is a major decision that requires careful planning and expert advice. At First Class Accounts Ovens & Murray and Busy01 Consulting, we are here to help you every step of the way. Contact us today to discuss how we can assist you in creating a comprehensive exit strategy that ensures you get the best possible return on your investment.

Top 8 things to outsource in your business

Scaling your business requires a strategic shift from being deeply involved in every task to focusing on high-level planning and growth. To achieve this, you need to spend more time working on your business rather than in it.

This means dedicating your energy to strategic initiatives that drive growth, innovation, and long-term success. However, the day-to-day operational tasks can often consume a significant portion of your time, making it challenging to focus on bigger goals.

Finding ways to leverage your time effectively is critical, and one of the best strategies to achieve this is through outsourcing. Outsourcing allows you to delegate tasks that are either not within your core skill set or those that you simply do not enjoy. By doing so, you free up valuable time to concentrate on areas where you can add the most value.

Outsourcing these tasks to professionals can enhance the quality and efficiency of your operations, ensuring that critical functions are handled expertly.

Things you should consider outsourcing in your business:

1. Payroll

Managing payroll involves complex calculations, tax withholdings, and compliance with regulations. Mistakes can lead to hefty fines and unhappy employees.

Outsourcing payroll ensures accuracy, saves you time, and can even reduce costs. While utilising a payroll product is a great option, a professional payroll service will handle everything from wage calculations to tax filings, allowing you to focus on your core business activities.

First Class Accounts Ovens & Murray can help: We offer comprehensive payroll services that ensure your payroll is handled accurately and efficiently. 

2. Bookkeeping

Do bookkeeping tasks often infiltrate your evenings or weekends? Does the stress of these tasks piling up occupy your mind?

Bookkeeping is essential but can be time-consuming and stressful, especially if it spills into your personal time. By outsourcing your bookkeeping, you not only save time but also gain peace of mind knowing that your financial records are up-to-date and accurate.

At First Class Accounts Ovens & Murray, our bookkeeping services are designed to take the load off your shoulders, providing you with accurate and timely financial information. Let us handle your bookkeeping so you can focus on growing your business. Get in touch with us today to find out more.

3. Virtual CFO

Budgeting and forecasting are crucial for any business but can be challenging without the right expertise. A virtual CFO specialises in these areas, providing detailed budget analysis and accurate financial forecasts that help you plan for the future. They offer strategic insights, monitor your financial health, and identify opportunities for growth, ensuring you make informed decisions.

At First Class Accounts Ovens & Murray we offer comprehensive budgeting and forecasting services to help you plan effectively and make strategic decisions. We use cutting-edge software like Futrli to provide you with clear, actionable financial insights. Contact us today to learn how we can support your business growth.

4. Digital Marketing

From your content strategy to your social media accounts, if this is not a strength of yours, outsource it! There are many freelancers who have multiple clients at this level, who’ll likely be more knowledgeable regarding SEO and much more effective and efficient in general.

5. Graphic Design

Your brand is a key reflection of your product offering. If you don’t have the skill, software and time to do this well, you’ll potentially damage your brand.

6. Scheduling and administrative tasks

A Virtual Assistant can help you manage anything from your appointments to flights, emails and beyond (virtually anything admin). At a lower level, consider adopting software that’ll automate or minimise processes, such as self-booking appointment apps where your clients can schedule a meeting with you, e.g. Calendly.

7. Customer feedback

Many businesses miss this valuable opportunity to connect with customers and improve their experience. A Virtual Assistant can help, but there are also apps (such as Ask Nicely) that automate the process of asking for feedback; directing happy responses to leave you Google reviews and negative responses back to you to quickly resolve!

8. Inventory management

Too much stock can cause cashflow issues and affect sales price (due to resulting discounting), but not enough equals lost sales. Outsourcing inventory management can help you minimise stock-carrying costs and allow you to focus on more important things.

While outsourcing takes a little bit of setting up, it’s worth the short-lived pain for massive gain. We don’t have to be jacks of all trades. In fact, this thinking often leads to begrudgingly doing many things poorly rather than doing a few things really well – and enjoying doing them.

Tempted to start outsourcing some of your tasks to free up your time? We can help by taking the first three roles off your hands! We work with a number of our clients in this way, allowing them to focus on what they do best.

Work to your strengths, outsource the rest! Need help? Get in touch.