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It’s getting close to the time of year when thoughts may be starting to turn towards planning for the year ahead.
The first point to make is in planning for the future, take care not to lose sight of the present. A plan is only as good as its delivery. There’s still 3 months to run in 2015 and things that must be done between now and the end of the year to achieve this year’s plan.
The concept of planning and delivering your plan raises the question of how well do you know your business? This sounds like a bit of an impertinent question - of course you know your business! It’s yours. You created it! You run it! You live it every day!
But do you really know it? Do you know what’s going on right now? Do you know what could knock you off course?
These are simple questions but not necessarily straightforward to answer.
To a large extent the answer to the first question rests with the timeliness and quality of your business data. I touched on this in an earlier note:
Cloud Accounting: What’s your problem?
The answer to the second lies in an understanding of the major risks that you and your business face each day. By risk I mean what could get in the way of meeting your key business objectives? In other words, what could possibly go wrong? This includes both day to day operational risk as well as larger strategic risks and those risks that are of low probability but very high impact should they actually crystallise.
There have been huge amounts written about risk management. However, fundamentally I think it’s about going through a few basic steps:
Define the risk and the consequences if it were to happen - consider the impact and probability.
Take steps which are designed to reduce the probability of the risk from occurring.
Understand what actions are required to reduce the impact if the risk does actually occur.
Periodically check that the steps taken to reduce the probability of the risk occurring are working as intended.
Remember that this is not a one off exercise. Change is constant and new risks emerge whilst old risks may reduce or disappear. Also be realistic, this is about the management of risk not the elimination of risk.
At Ashton Allsop we have prepared a simple template to assist with the assessment of risk in your business. It free of charge and available on request via the Contact page on our website.
Please e-mail: email@example.com
The template will hopefully get you started but we would also be delighted to assist you.
It’s not all about doom and gloom!
The flip side of risk is opportunity. A good plan is ready for both.
Clark Benefit Consulting Limited
"Our business was growing and our old accountants just weren’t able to offer the timely and proactive advice that we needed. Paul and Martin came highly recommended so we moved to Ashton Allsop. The difference was night and day and they had an immediate impact, they spotted issues not seen before and identified allowances we should have used from HMRC. We speak regularly, we work with them through Xero and other tools they make available and everything is made clear and understandable. We were so impressed that we’ve moved our bookkeeping and payroll and they now complete our R&D applications. They provide a fantastic service and have saved us so much time and money, whilst reducing our total accounting costs. We consider them an extension of our company and couldn’t work without them."
Stephen Hickey, CEO Digital Control Rooms