Financial Planning for the Small and Medium-sized Enterprise

Scitech Educational is pleased to be able to offer this essential resource to our existing customers.

Financial Planning for the Small and Medium-sized Enterprise includes:

• A compilation of general business aspects
• Coverage of the more technical aspects inherent in running a successful SME - including computations and case studies
• Information on forecasting future trading and cash flow
• Balance sheet management
• Outline of taxation for the small business
• Business Recovery and Company Doctors
• Building up a financial spreadsheet for forecasting
• How to use sensitivity analysis and combat competition
• Business assets and personal investment

Whether you are an owner/manager of a SME, or you are a business advisor, your bookshelf should contain a copy of this title.

We are pleased to offer the book at 5% off the published retail price. You pay just £45 including postage and packing.

Click here to order your copy today

ISBN 0754517853
Author Peter Lyons
FCA, AIIMR, FIMgt, FIPFM, MIBA, MCT, MIMC, CMC

REVIEW

Tolley's Businesswise is a pocket guide to financial management for the small and medium sized business. It is succinctly written, packing a wealth of advice into just over 200 pages. As such it can not hope to cover absolutely everything a SME financial manager would need to know, but it is an excellent starting point.

Businesswise briefly covers the basic management accounting principles from costing to PE ratios including discounted cash flow analysis. There are a number of worked examples of both manufacturing and retail industry costings, but disappointingly none specifically for the service industry. Several other techniques and concepts such as the capitalization of brands, are mentioned but not explained in detail.

However Businesses does provide refreshing advice on the universal problem of how to raise additional finance. Peter Lyons uses his 14 years of banking experience to clearly explain what a bank manager needs to know - how to present an application for venture capital or grant finance and why personal guarantees are so frequently requested from SME directors.

The author rejects the fashionable idea that turnover and profits are everything and revives the balance sheet as a valuable business management tool. Appendix F provides the business manager with a plain English translation of the balance sheet terms and uses each asset category to prompt the business manager with pertinent questions, such as: Are trade investments really necessary?
Businesswise also contains some gems of advice for the start -up business and a frank discussion of why businesses fail, pointing out the warning signs and suggesting preventative measures. I was particularly impressed by the chapter on how to draw up forecasts of cash flows, profits and balance sheets.

I would recommend Businesswise as a book for Accountants to give to their clients, with chapters highlighted for further discussion. For example chapters 2 and 4 that deal with Business Strategy, and Planning for Growth are two areas which are frequently overlooked by SME mangers when their attention is focused on the day to day running of the business.

Tolley's Businesswise would also make a good text for grounding material on business studies and finance Courses. It is not comprehensive, but it is relatively light and readable, which is more than can be said for most texts on financial management.
Rebecca Cave MEA, FCA, ATII

EXTRACT

Every owner-manager should ask him or herself the question: "what do I want to get out of the business and over what period of time?" Perhaps the answer to the first question appears obvious: many would answer "profit", when in reality they should be thinking of "cash flow". A business may make a profit and yet still fail if the profit is unrealised and locked up in assets or is spirited away in excessive drawings.

The second answer may invoke a more vague response: "a better living until I retire" or "higher profits for years to come". This infers that no specific target has been set within a given timescale, let alone how that target is to be attained. Whether, for example, through indigenous expansion or by acquisition. It will be difficult to manage the business in the most effective manner and optimise its returns if no strategic goal is in place. On the other hand time may not be critical for the business if, for example, it is to be passed down within the family, in which case operating continuity and the enjoyment of a minimum level of profitability are likely to be the most important goals.

Years of operating experience allied with technical skills give the owner-manager an edge in being able to judge how the business is trading. At any one time answers should be at hand to these questions:

Question:
What is my break-even point?
Translation:
What weekly average sales do I need to start earning a profit?

Question:
What is my average gross profit margin?
Translation:
What is my average profit per £1 of sales?

Question:
What will be my cash flow over the next three months?
Translation - Will I be generating sufficient cash to continue to trade?

Question:
What profit am I expecting to earn in the current trading year?
Translation:
What sales target am I working to?

Extracted from Tolley's Businesswise: Financial Planning for the Small and Medium-sized Enterprise, Peter Lyons.