New financial year begs new approach for stressed-out company directors
While the End of Financial Year brings a sigh of relief for some company directors, for many it is the tipping point as the stress of business under-performance takes its toll on those at the helm.
The reasons why businesses flounder and stress rises at this time of year often centres around lack of forward planning and can be prevented by having a Plan B in place.
A lot of large corporations have spent their annual budget by April or May, so those industries reliant on revenue relating to areas such as capital expenditure can see a dip in revenue at EOFY, causing earnings and cash-flow stress.
Other businesses are finding they are not hitting their full-year budget and need to come up with plausible reasons why, and what they are going to do about it.
In the retail sector, annual stocktake clearance sales can seem like a good way of offloading stock quickly, but can cause stress on staff and a detrimental reduction in margins.
There are some valuable strategies that company directors can implement immediately to ensure Financial Year 2017/18 is the year they turn their business around.
First, conduct an externally facilitated strategic planning session and produce a one-page strategic plan, with three key initiatives for each key area of the business, such as customer service, financial performance, people, marketing and systems and processes.
Next, implement a 100-day plan process for managing the initiatives arising from your strategic planning session, to ensure accountability and traction.
Finally, come up with the one to two big changes in your business strategy that will really reignite your business.
Scottish Pacific CEO, Peter Langham, said of the hundreds of businesses his bank has worked with, it’s those that seek help and plan ahead that achieve more year on year.
“Engaging a turnaround firm and establishing strategies for growth, documenting trajectories and developing implementation plans are key to creating accountabilities within the business,” Mr Langham said.
“From our experience, companies that can approach a bank with this vital information, stand a better chance of getting what they need from the bank, when they need it.”