Updated: Jun 20
For one SME in the business of online retail, Hayat Amin has been a rock for them. He manages to help them save about £500,000 every year and with that money, they can invest in the company and its employees. That is how we can help just one client save over half a million pounds per year!
How does he do this?
The first step to saving money is knowing where it's going. Data, financials, and people analysis.
The second step is making sure it doesn't go anywhere else but the generation of revenue.
By spending 1 day a week, the part-time Finance Director makes the SME is running smoothly and are able to fork out all the money saved to grow their businesses.
We believe that a part-time Finance Director can make a huge difference to any SME. By spending 1 day a week, the part-time Finance Director makes the SME is running smoothly and are able to fork out all the money saved to grow their businesses. Hayat Amin used the following tailored approach to save money for his client:
By creating a ''close to chest'' cash flow model
A cash flow model is a key tool for managing cash flow. It’s a spreadsheet or software that helps you to see how much money is coming in and going out, and how much you have in the bank at any given time.
A cash flow model sounds easy but to have an effective impact it needs to be based on various scenarios, strategies, and cost buckets.
By doing an impact analysis to see what costs are impacting revenue directly
Impact analysis for cost saving is something Hayat Amin does to answer the following questions ''what is the impact of the cost?''. This applies to new hires, software, or overall company expenditure. A big part of impact analysis is to benchmark operational and financial efficiency before and after the cost has occurred, in this way we clearly know if spending the cost has an impact on the business. If not, then we remove it straight away. If it does impact business in a positive way, we look at 3 ways each to optimise that cost.
By driving business through key KPIs
The first thing to understand is the importance of setting the right KPIs. As a business owner or manager, you may have dozens of different targets that are all equally important. However, if you’re not careful about how you set them and what they mean for your business, then it can be difficult for your teams to see how their efforts contribute toward those goals. You might even find yourself working on projects that don’t really move things forward in the company.
Tailored KPIs for your business can become a core competency. Hayat Amin has been mentioned in accounting magazines for his KPI creation. Something as bizarre as ''How much we make every time we flush the toilet'' - of course, it was for a sanitation company.
By creating a ''skeleton model''
A skeleton model can be a useful tool for understanding your business and its costs. A skeleton model is an overview of your business, showing the main departments and their costs but with a twist. It basically means, how much would it cost to run your business with the bare minimum, just direct costs, and revenue. You should always have a skeleton budget.
By providing industry-leading strategies for cost optimisation
All finance directors and CFOs are experts in cost reduction. But there's a big difference between saving money, and saving a lot of money. To achieve true cost optimisation for your SME, you need to do more than just cut costs: you need to make sure that your organisation is implementing the correct strategies for doing so.
First, we'll create a skeleton model of your company's structure, defining each department and its purpose within the business. From here, we can create an accurate cash flow model that predicts future revenues and expenses based on actual data from previous years; this will help us identify any areas where there may be room for improvement over time. Then we use our findings to complete an impact analysis – essentially imagining what would happen if certain changes were made throughout departments – which gives insight into how much each shift could potentially save or cost in practice before deciding whether or not it's worth pursuing at all!
Next up comes identifying key performance indicators (KPIs) relevant specifically to your industry sector/market segment which help bring the story to life! There is an art to it and hence you need an artist (ahem, a CFO).
Beyond Elevation is Hayat Amin's consulting company where he and his industry-leading CFO friends help SMEs make it! Book in a meeting to speak to Hayat Amin now: https://www.beyondelevation.com/blank-1