Case Study: Starting a business
I got a referral from a business bank manager in town. He had a client with a solid asset base, good cashflow but they wanted to start a business of their own.
He sent them to me to help them plan their business. We discussed the CFO Now program and embarked on building the business model.
Now this got exciting – we had a unique concept even though it was in the food industry. We had a strong brand in terms they had a clear vision of what they wanted the business to look like and the experience they wanted to offer – and it was different to what their competitors were doing.
We started by looking at the numbers – just like an accountant. We needed to establish the costs to get into the business then work out how much we needed to sell to meet the loan commitments and pay themselves a salary to fund their current lifestyle. I started by putting a budget in place – covered the overheads, required profit and talked about various things like opening hours etc.
At the end of the process, they knew how many customers they needed to see every day of the week – it was different for different days – and how many they needed for Breakfast, Lunch and Dinner – takeaways and sit down.
They knew how much each meal per person needed to be and this matched their menu! They were extremely comfortable and confident they could meet these numbers in a short period.
To make sure of this though, we then built the marketing plan with a focus on low cost areas of marketing to get the ball rolling before getting the more expensive forms of marketing involved.
It’s incredibly exciting - for them and us!