Small Business Financial Consulting Services
Your business and financial numbers are important, representing your ability to manage both tactically and strategically while allowing you to assess the success or failure of most initiatives. After all, to quote some long-lost management guru, “what gets measured gets managed.” However, constructing a usable and accurate financial model for your business is no simple task. That’s where small business financial consulting services become enormously helpful.
Know Your Financial Consulting Needs
The term financial model is misleading, because a proper forecasting model is composed of several distinct models representing various aspects of the business. Not all are relevant to every business, so the first step in modeling is to determine exactly what needs to be addressed. A small business financial consultant has years of experience working with companies and can help you determine where to start.
Components such as the revenue, expense, staffing, cash, debt, and equity models are generally common to all businesses. However, a production demand model or capital purchases model is generally required only for a capital-intensive business such as manufacturing. Alternatively, a skilled trades enterprise might need a simplified capital purchases model for new and replacement service vehicles, tools, and equipment.
Determine Inputs and Build Models
All of the financial models your business will use require inputs. These are the assumptions about what will occur in each of the areas addressed by a model. The revenue model, for example, requires sales projections for each major product or service line. Accurate projections require such considerations as how much your existing infrastructure can service—in other words, at what point will further revenue growth require more staff, another restaurant, another warehouse, or another service truck? You must also consider the state of the market, both customers and competition. Financial consulting services can help you determine the optimal path for your business.
Add Financial Statements
BroadCreek partners with you and your team to help drive results through corporate financial modeling. Each financial model is a detailed input to the income statement, balance sheet, or cash flow statement. Once integrated, they create a set of projected financial statements. New staff predicted by the staffing model based on the demands of the revenue model will drive the expense model. Increased materials costs will drive the expense or cost of goods model and may dictate an increase in price, affecting the revenue model. At this point the financial model becomes a living replica of your business, and the various inputs can be tweaked for what-if scenarios. Our small business financial consulting services are flexible and built with growing companies in mind.
Create a Management Dashboard
Once the inputs have been tweaked and projections created (typically three: best case, worst case, and expected), there must be a way to manage the plan. At this point a dashboard containing the key metrics must be constructed so that management can compare the projection to actual performance and make adjustments as needed. Avoid the temptation to have a long list of metrics; 50 indicators do not make a dashboard, they make a control panel from an old science fiction movie. Our expert consultants will guide you and listen to your needs as we develop the ideal strategy. Typically ten is the maximum, and in many cases even fewer will do. Remember, these are just what will be examined on a monthly, weekly, or even daily basis.
BroadCreek Financial Consulting Services
This brief overview of the financial modeling process may have you wondering how you could ever begin to construct a financial model on your own for your business. Considering their importance, forecasting models are indeed best left to the professionals. BroadCreek has a staff of expert financial consultants who apply a five-stage process for creating models. Most importantly, stage five is ongoing support and consulting—typically on a monthly basis—to help you get the most from your financial models and apply it to monthly, quarterly, annual and long-term planning.
Contact us today to learn more about our small business financial consulting services.