Looking at the financial performance of your business is a crucial step in reviewing the past and making plans for the future. The information that is found during this process can be used to build your strategy to help reach your long-term goals.
Financial results from 2019 will vary substantially, with many businesses being significantly impacted by drought. This can be confronting and difficult to talk about. However, it is still a worthwhile exercise to do, as you can look at what worked well and what didn’t work well financially. This will give you a clear picture on what the strengths are within your business that are making it more resilient, as well as the pain points which need to be addressed once conditions improve.
Whilst we need to review the previous year on its own, it is also important to use multiple years of data to see trends and get a better picture of the long-term performance of the business. We recommend looking to go back through at least the last 3 years of data (5 years would be even better) to get a true picture of the strengths and weaknesses of the business.
Taking time to review your results each year allows you to build a more detailed strategic plan for the growth of your business. The results show where there is opportunity to improve business profitability.
To look at business performance we use our benchmarking system called SnapShot. SnapShot captures the overall balance sheet position and the management profit and loss statement. The management profit and loss statement accounts for changes in livestock inventory, capital expenditure and puts a market rate on depreciation, so it is a better indicator of profitability than a cashflow report or tax return. SnapShot then uses this information, along with production records, to create a range of benchmarks to better analyse the true performance of the business.
SnapShot can be used as part of a benchmarking group or as an individual business review. Those who do SnapShot as part of an individual review get to anonymously review their results through the annual combined report, which includes all the businesses that entered data into SnapShot for that year.
If you’re interested in a business review session, using SnapShot, or starting a benchmarking group, then please register your interest by email or call 08 8841 4500.