

“Fail to plan…plan to fail.” Is this true? Statistics say so in that 60% of most companies fail in the first five years even though they are generating profitable revenues. How can that be?
Failure in spite of profits is frequently due to a lack of cash flow, which often happens because of a lack of understanding that profitability does not equal cash AND, yes, failure to plan – more specifically, With a growing, profitable company it may seem that you’re moving too fast to set aside time for forecasting or you may not have the skills within failure to FORECAST how you want your business to grow. your staff to put together this road map to longevity. Yet those without a charted course often end up in the ditch as part of that 60% of businesses that fail to thrive.
Forecasting involves developing a profit plan for a minimum period of one year. The process of preparing your plan provides insights and discussion about potential scenarios and situations you may encounter and yields strategies for addressing them. Although your plan will never be 100% accurate, it will document your vision for the future of your company and how to get there. Your profit plan should include:
This plan is dynamic; it is both a metric to gauge your progress and an evolving strategic document that should be updated and tweaked as your business progresses and your objectives become more focused and specific. Using your well-prepared forecast as a guide keeps you moving in the right direction while steering clear of unanticipated surprises that can detour you from your growth objectives. And it will help you manage the two very separate concepts of profitability and cash flow while maintaining your position among the 40% of businesses that prosper.
Contact me to discuss developing a profit plan for your company, through accurate forecasting, to keep you on the road to success.