Six Ways To Use Statistics To Drive Your SME’s Strategy by Forbes – Entrepreneurs

Serebral360° found a great read by Forbes – Entrepreneurs article, “Six Ways To Use Statistics To Drive Your SME’s Strategy.”

Add another layer to your #Business literacy. We at Serebral360° would love to know if the Forbes – Entrepreneurs article was helpful, leave a comment, like and share. Let’s dive in and discuss the information and put it to use to grow your business. #BusinessStrategy #ContentMarketing #WebDevelopment #BrandStrategy
Info@serebral360.com 762.333.1807 www.serebral360.com
Grap a copy of our NEW Business Stratgety Books #FFSS VOL1 and #FFSS VOL2

What do your business’s vital statistics tell you? The short answer is it depends on how you look at them: your financial data and management information will tell you what’s happened in the business to date, but for most small and medium-sized enterprises, the greater value lies in what the numbers suggest might happen in the future. As in a car, the rear-view mirror is useful, but what drivers need most is a clear vision of what lies ahead.

That’s easier said than done. Hard-pressed SMEs often lack specialist finance teams to turn raw data into business insight; they may be led by executives trying to manage operational responsibilities as well as to think strategically; and they don’t always have access to third-party advisers who can help paint the bigger picture while also getting the detail right.

Professional advice is certainly worth considering, if it will help you build strategy from your statistics, but there’s plenty you can do in-house too, if you know what to focus on. Consider these six areas for starters:

Crunching the cash flow

Cash is king for most SMEs – even successful businesses have gone under because of short-term cash flow difficulties. Based on your previous cash flows, try to identify where the potential vulnerabilities might lie and how you can tackle the problems before they escalate – for example, by building daily cash flow forecasts so you can spot a crunch moment well before it arrives.

It’s not just daily operations you’ll need to consider. The cash in your business will be a key factor in its ability to grow. Do you have the headroom required to expand into new markets, for example, or to offer new products and services, or to open new outlets? If not, should you consider working capital finance?

Managing the risk

Successful businesses know that the good times may not last forever and they work hard to understand what might cause them difficulties. A crucial part of anticipating future risk is understanding where your business’s exposures lie – and whether one of those exposures is excessive.

Take, for example, your customer base. You may have diversified across different parts of the market, but do you also have a sufficient spread of customers? If you’re over-dependent on any single customer, its problems will very rapidly become yours. That may not be obvious until you’ve crunched the data.

Modelling the future

The top-down view of your business’s future is what it hopes to achieve. The bottom-up perspective covers how those targets might be met. For example, your goal might be to move into a new overseas market – in which case, factors to consider will include distribution, the supply chain, sales and marketing.

To link these two views, you’ll need to construct financial models that map out the future according to your goals. Adjust for factors such as the economic climate, the dynamics of your market and the nature and scale of your ambitions, in order to plot a roadmap to achieving your ambitions.

Production process: is your business set up for success?

Getty

Grinding the granular

Entrepreneurs very often bring a particular set of skills to their business ventures: creativity, ambition, passion and commitment are attributes that spring to mind. Very quickly, however, they must also learn the nitty-gritty of running a growing company – in particular, they have to get to grips with financing issues despite having no training or experience in accounting.

The danger is that the detail gets missed – the headline numbers may make sense, but not what lurks beneath. Think about the knowledge gaps in your business and how to close them.

Opening up opportunities

Is your businesses confident it knows how to grasp the opportunities ahead of them – and which specific opportunities are worth grasping. How, for example, do SMEs make the jump to the digital world, given the opportunity it offers to scale up rapidly without major infrastructure investment? What do the numbers tell you about which investments will generate the greatest returns?

You may never have had to confront these challenges before – in which case, working with advisers who’ve helped others with them may be invaluable.

Adjusting to the agenda

As well as the small print, successful entrepreneurs assess the broadest possible picture of what lies ahead – including the external factors that may impact on your business. What’s happening in your industry – and what might that mean for you – and what are the challenges coming down the track for all SMEs? That might be anything from Brexit to increases in the national minimum wage. What impact would change have on the finances of your business and how do you plan accordingly?

June 3, 2019 at 07:24AM
https://www.forbes.com/sites/davidprosser/2019/06/03/six-ways-to-use-statistics-to-drive-your-smes-strategy/
Forbes – Entrepreneurs
http://www.forbes.com/entrepreneurs/
http://bit.ly/2CMy7Yu