The Virtual FD’s top financial tips  10 rules for CEOs and MDs of SMEs and start ups . © Virtual FD 2010
I’ve developed the following 10 financial rules by working closely with a number of SMEs, each with different approaches t...
Rule 01 Cash(flow)  is  king Cash is the life and soul of your business so make it your top priority. Your business can ex...
Rule 02 Improve visibility of your cashflow  You need to have a clear understanding of your cashflow of the past 30 days a...
Rule 03 Reduce the cash burn You need to be creative with all your costs and look for ways to minimise them. Cash burn is ...
Rule 04 Revenue does not equal profit A clear understanding of the profitability of your products or services, and the sca...
Rule 05 Value your cost base Is there ‘fat’ on your cost base? By reviewing and valuing what overheads contribute to your ...
Rule 06 Measure performance against something A good budget is built on clear, relevant, current revenue and cost assumpti...
Rule 07 Look forwards You will only achieve your long term business goals by looking forwards  (e.g. the next month, quart...
Rule 08 Don’t baulk at decision making Making a decision can be daunting, but is made easier by having sufficiently clear ...
Rule 09 Reduce risk and lower barriers  Identify the key financial risks or barriers to the success of  your business, whi...
Rule 10 Incentivise yourself (and your team)  Set targets which underpin your budget or business goals that your whole org...
 
 
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Top 10 Financial Tips

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I’ve developed the following 10 financial rules by working closely with a number of SMEs, each with different approaches to how they run their businesses and finance functions.

For more details contact me at ciaran@virtualfduk.com

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Top 10 Financial Tips

  1. 1. The Virtual FD’s top financial tips 10 rules for CEOs and MDs of SMEs and start ups . © Virtual FD 2010
  2. 2. I’ve developed the following 10 financial rules by working closely with a number of SMEs, each with different approaches to how they run their businesses and finance functions. For more details contact me at [email_address] © Virtual FD 2010
  3. 3. Rule 01 Cash(flow) is king Cash is the life and soul of your business so make it your top priority. Your business can experience significant growth in revenues, or indeed profits but poor cashflow and failure to meet a payment obligation could result in you losing your business. It is as simple as that. © Virtual FD 2010
  4. 4. Rule 02 Improve visibility of your cashflow You need to have a clear understanding of your cashflow of the past 30 days and for the next 30 days (at least!). This will allow you to identify risks (regarding payments and receipts) and will give you time to negotiate with suppliers and customers. © Virtual FD 2010
  5. 5. Rule 03 Reduce the cash burn You need to be creative with all your costs and look for ways to minimise them. Cash burn is particularly relevant to start-ups but controlling costs and your relationship with suppliers when you are small will be worth significantly more to your bottom line when your business grows. © Virtual FD 2010
  6. 6. Rule 04 Revenue does not equal profit A clear understanding of the profitability of your products or services, and the scale of management overhead will shift your focus from top line to bottom line . © Virtual FD 2010
  7. 7. Rule 05 Value your cost base Is there ‘fat’ on your cost base? By reviewing and valuing what overheads contribute to your business and your bottom line, you will identify what is essential and what is discretionary or a luxury. It is highly likely such a review will deliver savings. © Virtual FD 2010
  8. 8. Rule 06 Measure performance against something A good budget is built on clear, relevant, current revenue and cost assumptions and also reflects your business goals for the next 12 months. So when you review actual performance you will be able to see clearly what has gone well or not so well. If budget assumptions become out of date – refresh and reforecast. © Virtual FD 2010
  9. 9. Rule 07 Look forwards You will only achieve your long term business goals by looking forwards (e.g. the next month, quarter, full year outturn, 3 years). © Virtual FD 2010
  10. 10. Rule 08 Don’t baulk at decision making Making a decision can be daunting, but is made easier by having sufficiently clear analysis which includes all key relevant assumptions. An understanding of the sensitivity of certain and uncertain assumptions will help you understand the risk and whether further analysis is required. © Virtual FD 2010
  11. 11. Rule 09 Reduce risk and lower barriers Identify the key financial risks or barriers to the success of your business, which could well change from one year to the next. Look at ways to mitigate, reduce or lower what is within your control or influence. © Virtual FD 2010
  12. 12. Rule 10 Incentivise yourself (and your team) Set targets which underpin your budget or business goals that your whole organisation understands. Incentivise your team (financially or otherwise) to meet them. It’s a win-win situation. © Virtual FD 2010

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