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The Simple Way to Dominate Your Market

Want an easy way to outsmart your competitors and dominate your market? One that doesn’t involve an investment of time or funds in social media, Google AdWords, email marketing, SEO or any of the usual suspects.

Nor will you have to employ a swathe of graduates from Oxford, Cambridge or Harvard to carry this one out on your behalf.

And it’s one that will give your organisation a distinct and profitable advantage over the majority of SMEs, no matter your industry or specialty.

So what is it?

Well, you may be surprised to discover that it’s the oh-so-humble business plan. Yes, that often derided document can indeed give your company a distinct competitive advantage over the rest of your market. (If you’d like to find out more about how to create and use an effective business plan/implementation timetable as a working document to keep your business on track to achieving your desired objectives, you can download a free report now by clicking here.)

Our experience, and just about every survey you read, shows that SMEs who have and use a business plan are consistently more successful and more profitable than those that don’t. A survey commissioned by business and finance software provider Exact, for example, found companies with a business plan were consistently more profitable (70%) than those that did not (52%).

So why don’t all SMEs have a business plan, one that details the company’s operating and financial targets, its strategic direction, and tactics? Apparently, many don’t consider it necessary. Or their entrepreneurial owners like to keep everything ‘in their head’. That’s probably fine for a start-up but fatal for a growing company.

There are so many benefits to having and using a well-constructed business plan. It will help you and your management team to:

  • Clarify objectives and develop suitable strategies
  • Understand your market
  • Identify and overcome internal and external threats
  • Seize opportunities
  • Organise the company
  • Raise external funding
  • Obtain raw materials
  • Develop new products or services
  • Generate sales
  • Comply with regulations, define job duties, etc.

 

There’s a catch however. While having a business plan is mission-critical, creating it can be arduous, which is probably why so few SMEs have one.

After all, thinking through objectives and likely outcomes which may occur many years down the line is, by nature, challenging. But it is the hard work up front which makes for lighter work down the road as all of our team of part-time FDs will attest to.

It’s the case that most CEOs and MDs just don’t have the time to spend on quality strategic thinking and to document and communicate that thinking in a way which allows the whole business to buy into the vision.

Likewise, they don’t have the time and specialist knowledge to manage such a business plan.

That’s unfortunate because a business plan provides CEOs, MDs and management with an ability to foresee threats and opportunities and course-correct when necessary.

Not spending quality time on strategic planning usually leads to a chaotic working environment. Opportunities get missed. Threats aren’t identified until it is too late. Small wonder that our clients often talk about ‘not feeling in control’ and ‘not really knowing what is coming around the next corner’.

Business planning and getting it right brings a real sense of clarity and direction to a business – this is where an experienced FD or CFO can make a significant contribution. They can help you to create and manage a highly-effective implementation timetable.

CFOs often possess a different albeit complementary set of skills to CEOs/MDs. What’s more, they can act as devil’s advocate to ask the right questions and help to steer the company in the right direction. Meanwhile, you can get on with what you do best. This 3-minute video explains the part-time FD/CFO model in a little more detail.

Now, if you’re like many SMEs, you probably don’t have the resources or the need to employ a full-time CFO. So what can you do? You can try to manage the entire process on your own. Or, you can make it easy on yourself and your management team by hiring a part-time CFO to manage the entire process for you.

The CFO Centre will provide you with a world-class FD or CFO with ‘big business experience’ for a fraction of the cost of a full-time CFO. It’s the business equivalent of having an Olympic coach to help your business thrive.

To get started, just book your free one-to-one call with one of our business planning experts today—just click here now.

How to Seduce Your Bank Manager

Given that the bankers are often ranked in the top 10 of the world’s most hated professions, the prospect of seducing your bank manager is probably not high on your bucket list.

It’s fair to say that you’ve probably never thought about doing it. But if you want your company to grow then it’s something you not only need to think about but act on.

Unfortunately, seduction, in this case, will rely almost entirely on the allure of your company’s numbers rather than your ability to deliver snappy one-liners, a bunch of hothouse flowers or the promise of a candle-lit dinner. That’s because the average bank manager is a risk-averse creature who will demand far more from you than the average romantic date!

And it will be down to you to do the running—because if you need to fund your working capital or if you’re looking to fund investment in the business and to grab an opportunity, you’re likely to need external funding.

In other words, you need your bank manager far more than he or she needs you. That’s because access to finance will be a key determinant in your company’s growth and if you’re like the vast majority of SMEs, you’ll approach traditional banks for funding (in the form of an overdraft or loan) before looking at other funding options. So you’ve got to be at your persuasive, most charming best.

And it will take preparation—masses of it. Think weeks, even months of preparation.

That new finance might be for working capital/cash flow or capital expenditure such as investing in new machinery or property or improving existing buildings. Or you might need it to enter new markets, develop new products/service or even to refinance the business.

Whatever your reasons for seeking external finance, if you’re going to approach a bank, you need to know the best ways to win over your bank manager. You also need to know what approach is going to trigger an immediate slap-down (an outright ‘No’) or the offer of a substantially smaller amount than you’ve requested. To download our full report on how to get the best out of the relationship with your bank manager click here

Why do bank managers rebuff applications?

Banks won’t always provide you with the reasons they’ve turned down your loan or overdraft application. But here are some of the reasons they’ve offered companies in the past few years:

  • The company is experiencing declining sales/profitability
  • The company is over-leveraged
  • The bank has changed its lending policy. A new feature of the new ‘normal’ financial environment means there’s been a reduction in the availability of longer-term debt (for loans with terms stretching over five years), according to the CBI.
  • The company has insufficient security
  • The company has no experience in the new product/service or market
  • The bank considers the company’s business sector or trading environment too risky
  • The bank is not prepared to lend the full amount
  • The company has a weak balance sheet.

How to boost your chances of a ‘Yes’ response

So how do you get your risk-averse bank manager to happily rubber-stamp your loan or overdraft application?

Be prepared

Your bank manager is likely to demand you provide fully audited accounts, financial cash-flow projections, security information and guarantees and full business plan details. You might also be asked to provide evidence from order books.

Companies who’ve gone through the application process in the post-recession years have noticed that it’s become a lot more stringent. They found there was a higher level of due diligence, sales and market reporting, security and guarantees and that the process took longer than was expected. This was particularly the case when they approached banks with which they’d had no previous dealings.

Improve your credit rating

As well as having all the required paperwork in place, managing and making efforts to improve your company’s credit rating will help your chances of getting a ‘Yes’ response from your bank manager.

That means making payments on time, maintaining regular contact with creditors and banks and ensuring you offer maximum financial transparency.

Enhance your internal resources

Hire an experienced Chief Financial Officer who has experience with accessing various forms of bank debt finance and can put together, for now, the business plans and financial projections the bank will want to see. Here’s the thing: you can now hire a part-time highly experienced Chief Financial Officer for less than you’d pay a full-time junior staff member. You can find out more here

 

Conclusion

Seducing your bank manager is going to take time and lots of effort but if you’re successful, it will provide your company with the financial fuel it needs to grow and reach its full potential.

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