At RRI, our experience in insolvency and business restructuring underscores the critical importance of proactive planning in safeguarding the future of businesses, regardless of their size. This article examines the strategies for success in proactive recovery planning, drawing from our expertise and insights from helping many businesses navigate difficult times.
Proactive Recovery Planning is more than reactive crisis management. It’s about envisioning your business’s future and creating a comprehensive strategy to help you through various contingencies. It involves analysing potential scenarios that may impact your business over the longer term, from product obsolescence to emerging competitors. You can proactively mitigate risks and capitalise on growth opportunities by anticipating and preparing for various issues before they escalate into crises.
The link to financial KPIs
A key element of proactive planning is documenting potential scenarios and tying them to financial KPIs. If the KPIs fall for a particular business segment, you need to understand why and know the steps to recover that process. By closely monitoring these indicators, you can identify early warning signs and introduce interventions to address underlying issues whether it’s investing in a struggling segment or exploring new marketing avenues, a well-crafted plan will give you the clear guidance you need.
Proactive planning means you have a roadmap to respond to various scenarios as they happen. It involves outlining implementation steps and timelines to ensure you can execute your strategies effectively. From investing in growth opportunities to reallocating resources, proactive planning empowers you to adapt and thrive.
Gut versus Data
Transitioning towards data-driven decision-making is another crucial aspect of proactive planning. By leveraging accounting software like Xero or MYOB and running regular reporting, you can gain valuable insights into your financial performance and identify areas for improvement. This is where a good accountant will help you. They can act as your quasi-CFO, providing specific advice and forward-thinking analysis rather than simply seeing you once a year for your returns!
We encourage our clients to seek and leverage the various industry data generally available. Government departments like Treasury and the Australian Small Business and Family Enterprise have lots of good data from across the board. Additionally, the ATO has benchmark figures that you can use as a baseline. This shift towards data-driven analysis enables you to optimise your operations and enhance your competitive edge in the market.
Review and Revision
Proactive planning isn’t a set-and-forget exercise. It requires regular review and revision to stay relevant. We recommend that our clients revisit their plans periodically, making the necessary changes to ensure they continue to align with current realities. Proactive planning allows you to stay agile and resilient.
By anticipating challenges, identifying opportunities, and developing comprehensive strategies, you can confidently navigate uncertainties and emerge more robust than ever.
At RRI, we are here to help you in your proactive planning endeavours, offering expertise and guidance every step of the way. Email us for a confidential discussion today.
Disclaimer
This information and the contents of this publication, current as at the date of publication, is general in nature to offer assistance to RRI Advisory’s clients, prospective clients and stakeholders, and is for reference purposes only. It does not constitute legal or financial advice. If you are concerned about any topic covered, we recommend that you seek your own specific legal and financial advice before taking any action.