The SV Partners Commercial Risk Outlook March 2016 predicts that nearly 50,000 businesses across Australia, or 2.1%, are expected to face adverse financial events within the next 12 months. The top 3 nominated causes of failure are inadequate cash flow, poor strategic management of business and lastly trading losses.
This report highlights to me how important it is to understand what is happening in your business now and where it is heading. Spending a little more money on appropriate systems and professional expertise in your business will go a long way to avoiding the issues that SV Partners warn about. Businesses should have:
A well-managed business will reduce the risk of falling over the precipice. Even for smaller businesses, management systems are highly affordable today and outsourced CFO services will provide the relevant professional expertise for a fraction of the cost of a full-time person.