Startups.ie

Brian Larkin is a qualified accountant who previously spent several years in practice specialising in growth strategies for SME’s and start up companies. He tells us why more than ever cash really is king ….

CASH IS KING.

It’s a cliche, but during these turbulent times, cash really is king. The only way to master cash management is by putting a plan in place.

How many SME’s and start up’s have a financial plan in place?

Apparantly most starts ups put a financial plan in place but few actually use it as an ongoing living document that could drive their buisiness forward. In fact, most companies that invest the time and moeny to create a finance plan normally allow it to gather dust on a book self or let it live within a drawer somewhere.

Our summer holidays…

I can’t wait for my summer holidays. I look forward to them every year. We spend weeks planning our annual holidays – deciding on locations, deciding on hotels, deciding on activities, deciding on methods of transport. We spend countless hours planning our holidays. But how much time do we spend planning for our business? Most owners of SME’s spend more time planning their holidays than they do planning for their business – which ultimately finances the summer holidays!

Ok, you know exactly how your business is cash wise. You don’t need a financial plan…

But what happens when the unexpected occurs? You loose a key contract? An unexpected bill arives? Do you have a long term picture of your cash position? Can you see the long term impact of your current decisions on your long term cash? Are you prepared for an unforeseen cash crunch?

Creating a financial plan that will really make a difference to your business…

Well like all good stories a financial plan should have a begining, a middle and an end. Being realisitic and honest with your business is the first point. A financial plan is like a road map for your business. And like all good route planners, we need to first establish exactly where we are NOW before we can plot our course. So, firstly identify your cash position (bank balance), creditors position, debtors position and tax position.

Once an opening position has been established you can critically access your ongoing monthly costs and populate a simple spread sheet. This will ultimately create the conclusion of your plan.

Most importantly, a cash forecast will give you a clear picture of your business. If your business is going through a rough patch, a financial plan will also give you peace of mind that the company can trade out of its predicament.

How long to plan for?

I read alot about businesses implement five year financial plans or three year financial plans. I personally don’t consider any financial plan that is greater than twelve months to be of any value. It is pretty difficult to put an accurate financial plan in place for two years time. Think back two years ago… could we have foreseen the financial crisis that we are currently living in?

If anyone wants to talk to me further regarding financial planning, then please feel free to drop me an email (B_larks@hotmail.com).

About:

Brian is a qualified accountant who previously spent several years in practice specialising in growth strategies for SME’s and start up companies. Most recently Brian has held senior finance positions for one of Irelands best known business men. Brian is currently studying for an MBA from DCU Business School.

Great Blog Brian….Thank You…www.startups.ie