All too often, start-up enterprises seek to sprint to the finish line and open their business without thinking things through. Unfortunately, what happens is that a lack of financial planning can easily cripple a business, even if it has a new product and has a lot of basic principles correct. There are many moving parts to deal with, and any item or circumstance that is unaccounted for can be a potential liability.
This is seen more frequently in the tech industry. A new and innovative idea is often not enough in a world teeming with seemingly new and innovative ideas. Planning, management, and attention to detail are what sets businesses up for the long-term. HCR Wealth puts clients first and can assist with the financial planning and review process that are integral to success.
The Importance of Financial Planning and Regular Reviews
As the old adage goes, if you don’t know where you are going, you can never get there. When embarking on any business venture it is imperative to create a financial plan with milestones and how to achieve these specific milestones. These plans need to be regularly reviewed given the dynamic nature of business activity.
It is important to be clear at the outset where capital is coming from, whether and how the company will take on debt, and how revenue will be spent and managed. Business ventures are created to return a profit, and different financial considerations need to be addressed to ensure the venture will eventually be profitable. Some people can forget the fundamentals of running a business while focused on a specific service or new product. In addition, management can become distracted or too focused with certain business aspects to the detriment of those that may be more relevant.
It is also helpful to do a cost benefit analysis periodically of each component of the business. Many make the mistake of overpaying for certain services without having any procedures in place to review the value of those services, such as marketing, staff, IT or accounting. Benchmarks should be put in place to quantify value and to objectively analyze how each department or team member is doing. A benefit of setting the parameters of the review process early is that staff will know their roles and what is expected of them more clearly, as opposed to potentially being alienated at a later date.
Creating Plans and Milestones
Setting milestones for a business is dependent on the particular sector as well as specific circumstances. Sometimes the milestones can focus on the long-term, for certain issues, it may be best to review them every couple of months. It is often helpful to create a large milestone and break it into smaller time slots for review on a quarterly basis.
Sophisticated plans should be executed early and do not just happen spontaneously. They need careful and meticulous planning. What is certain is if no milestone is created, worked towards and reviewed, then it is often more difficult to stay on track. You need to establish where your company is going and how it is going to get there, with a quantifiable review process where everybody is held accountable to their specific roles.
Effective strategic partners are also important to success. This includes investment advisors, accountants, legal representatives, and banks. The choice of partners can ultimately make or break a business in the long-term. The roles of these strategic partners can be analyzed during the review process to see if they are doing what they are supposed to, and if they are worth the cost. All aspects of the business should be scrutinized every quarter, and no stone should be left unturned.
How HCR Wealth Can Help
HCR Wealth Advisors excels at helping individuals with the planning and review stages of a business enterprise. These areas are often overlooked excitement of launching a new business venture. There are certain tedious elements that people do not want to hear or deal with when running a business, but which are in fact pivotal to its success. A strong planning and review process is something that can set a business apart from another ‘hot idea’. It takes more than innovation and enthusiasm to be successful in the long-term.
HCR Wealth helps to takes care of clients’ financial activity, so they can focus their efforts more towards running the business without a shock expense disrupting the flow. HCR Wealth can help monitor the performance of the business and offer advice when appropriate to help keep businesses on track. HCR Wealth can also advise on whether or not certain goals are achievable before a client attempts to execute a plan, which can save considerable resources.
Certain inevitable patterns and trends appear again and again and if they are not corrected they can lead a business down a path to financial ruin. HCR Wealth Advisors can help businesses identify these patterns to help keep a business running smoothly. Additionally, the firm also has observed commonalities in successful enterprises and can share this knowledge with clients.
HCR Wealth is an organization based around repeat clients for the long-term, and don’t simply tell customers what they want to hear in the hope of making a profit. It is what sets them apart from other advisors, and they are willing to engage in difficult conversations with clients surrounding topics they may not wish to do so. Ultimately, this results in repeat business and successful clients, which is what the HCR Wealth business model revolves around.
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