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A keen awareness of maintaining financial health in your business can mean the difference between success and failure. It can also be the deciding factor in whether or not an entrepreneur succeeds or fails in their business. Given that 66% of SME businesses report experiencing cash flow problems, it is paramount for business owners to maintain a tight rein on their money coming in and going out. At this juncture, first-rate business consultancy services in the UAE such as Fortius Consulting Services can come to your rescue. This is especially important when you are first starting a business. From a managerial standpoint, keeping the company's finances in good shape is not optional.
The following commercial prospects should be on your radar if you want to keep your company afloat:
Your long-term objective is to grow your company, but you need to take baby steps in that direction to avoid going broke. This shows how challenging it can be to complete correctly, as only 22% of businesses started between 2011 and 2021 could scale successfully.
When scaling your business, it's crucial from a financial standpoint to only scale up until you reach your next target rather than forever. As an entrepreneur, you should only take on the tasks you can handle and not create too many unnecessary financial commitments. Aiming to reach excessive heights too quickly might strain your money.
Keep in mind that hasty expansion is directly correlated to the failure of 74% of all startups. This shouldn't make you nervous, but it should serve as a gentle reminder to focus on attainable goals rather than shooting for the stars.
It's also crucial not to put all of one's eggs in one basket, so to speak, because of optimistic forecasts. To take advantage of future business opportunities, you must strike a balance between starting small and expanding rapidly. There is a strong connection between rapid expansion and business failure.
An entrepreneur's natural inclination is to believe that their workforce represents their greatest asset. Please remember that your employees are the key to your company's future success as you go ahead. It's not wise to spend most of your money on an unsuccessful endeavour. However, the same principle applies to all of your possessions. To start a business from scratch, it's essential to have a broad view of the company's resources beyond its human capital.
The goal of any prudent business manager is to maximise the return on investment (ROI) of a company's capital expenditures, including things like $1,000 laptops and office space. If not, then some rethinking is in order.
PWC finished a consultation report on modern financial management's impact on a company's bottom line and growth prospects in 2017. According to their research, the finance departments that successfully implement lean (principles) shift their focus from data collection to insight development.
That is, C-suite executives and their finance teams had much more time to consider all of the implications of their spending decisions. This calls for a radical shift in the typically conservative business department's thinking. Only 24% of finance processes presently allocate time to work that necessitates strategic thinking; therefore, it can become a point of differentiation.
Similar to keeping tabs on what you use and how much it adds to your bottom line, KPMG found that incorporating lean principles in finance departments gave them more freedom to cut out wasteful spending.
At the very least, adopting a lean mindset in the financial department will help you prioritise responsible spending over grand plans for the future. In management, the advantages of a lean approach are easy to see.
For more than a decade, Fortius Consulting Services has provided business consulting and CFO services to companies in the UAE, Singapore, and India. Whether you are facing excessive expansion or cash-flow difficulties, we can help you navigate financial obstacles through assiduous planning. Similarly, we create advanced marketing and sales predictions to help you succeed in audits or IPOs.
In reality, your company's actual functionality is one-of-a-kind, so it makes sense to keep accounting in-house and employ a full-time worker if you value a thorough understanding of your finances in the context of your broader business goals.
Hiring outside help for crucial tasks is tempting when expansion is a top priority. It may seem reasonable at first glance from management in the business point of view. Many capable groups could take over certain sections of your organisation and do an excellent job with the tools at their disposal. You'll have more time to concentrate on the basics while this happens, and it will feel like everything else is running smoothly in the background.
But from a monetary standpoint, you'll require more than a simple assessment of your loss and profit sheets, mainly if you focus on instituting a lean finance culture.
Also Read : Business Consulting Services' Crucial Role in Assisting Businesses in the UAE
The two main reasons for this are the following. As was previously mentioned, your company is one of a kind. Is it possible to ensure that someone is monitoring your finances for an entire work week (40 hours) if you consider outsourcing your finance department? That's how much effort is necessary to achieve the level of comprehension you seek.
Having someone taking note of all expenditures for forty hours a week could have a significant impact on the financial fortunes of your business, whether for trivial chitchat, coming up with ideas, or a number-crunching strategic planning session. So, opting for first-rate business consulting services such as Fortius consulting Services can be a real difference maker. Give them a call right away!
