Vaulting Ambition

Posted by on Oct 24, 2017 in Budgeting and Forecasting, Growing with Confidence, Lessons from the Big End of Town

The truth is in the cash flow

Vaulting Ambition

This is the first of a series of articles I wrote about Murray Goulburn on behalf of the Association of Virtual CFOs and which were published by Smart Company.

At the time I was astounded by the scale of Murray Goulburn’s miss, and their subsequent decision to make the farmer suppliers wear the brunt of what was a monumental head office stuff up.

I also knew there would be a lot more to come on this story.

In the end, I wrote another couple of articles/blogs dealing with different aspects and lessons as the story unfolded.

For business owners, in this article, you will learn how to:

  1. Construct a robust budget.
  2. Use as your starting point your current position, key industry and economic drivers.
  3. Gauge the scale of the task to shift from your current to your planned position.
  4. Track key business drivers throughout the year to understand the likelihood of meeting budget.
  5. Decide when your budget needs to be revised.

The key lesson is that the point of a forecast is not to be “right”.

The point of a forecast is to reflect your business plan, so that when things don’t go as expected you can ask the following questions:

  1. Have we taken all the actions required by our business plan to achieve our forecast?
  2. If not, why not? When will those actions be completed?
  3. If we have, then what has changed in the market for our goods/services that we did not anticipate?
  4. What, if any, action do we need to take as a result of the answers to these questions?

To grow with confidence you need a good forecast.

The three-way financial models that we build at Pro Veritate will help you understand the timing and amount of capital needed by your business to support your plan.

If you are a growing business you should Contact Us.  We can help.

Vaulting Ambition