Every business runs a process that continues to change from time to time. Company executives must be open to business processes that are developing rapidly. If you don't keep up with the times, business planning will not be profitable.
Business planning must be carried out continuously and followed by all organizational stakeholders. This will simplify the process, reduce repetitive efforts, and make scenario modeling easier in your business operations.
To stay ahead, businesses must be able to adapt and respond quickly to external factors. One way is to change priorities through continuous planning.
Continuous planning is a method of planning and creating business budgets that emphasizes continuous and recurring updates rather than annual or quarterly budget cycles.
Rather than creating a single business plan or budget over a specific period, companies need to monitor internal performance and external influences. This aims to inform proactive changes and make quick decisions.
Continuous planning can also be understood as an approach to organizational leadership and management that integrates strategic and financial planning efforts. This strategy is implemented in all aspects of the organization to encourage informed, timely and data-based decision making.
Chief Finance Officers and other financial executives face enormous pressure to play an active role in organizational strategic decisions. Organizations often rely on them to gain visibility into how finances impact overall business strategy.
Continuous planning establishes an ongoing financial business plan to provide a framework and tools for aligning the organization. This covers three important areas, namely strategy formulation, strategy alignment, and performance monitoring.
Apart from enabling organizations to quickly adapt and respond to change, continuous planning also makes organizations more agile in various ways. By utilizing the latest and accurate data, here are some of the benefits of continuous planning.
Eliminating unexpected obstacles to the budgeting process requires access to more accurate information through the cloud (rather than spreadsheets) and more precise financial forecasting capabilities help.
By continuously monitoring metrics and potential roadblocks, funding shortfalls or budget overruns become more visible. Budgets can be adjusted to stay on track rather than re-estimating annual plans.
Managing small, incremental changes throughout the year is much more effective than creating an annual plan. Just as you keep your kitchen tidy while cooking, you can reduce the need to clean up afterward.
Decisions in continuous planning should not be left to chance because all parties involved are empowered to implement them. However, this approach will not work without constant and transparent communication.
As a result, continuous planning can build trust and ensure everyone in the organization is on the same page. Even better, when direct communications are based on reliable data, executives and teams can come together and talk in absolute terms rather than basing decisions on a gut feeling alone.
When all teams in a company use one integrated platform, leaders from all business functions have more access to information. Data helps break down silos, making previously disparate teams better able to collaborate.
Predictions (forecasts) carried out regularly and continuously will build confidence in the reliability of the planning process. This belief increases trust among stakeholders and investors.
Business teams can formulate, revise, and implement beneficial changes without being burdened by plans or budgets. For example, performance assessments can be accessed through automated data analysis tools that provide real-time business insights. This helps reduce the time between analysis and decision making.
Implementing continuous planning can be an effective way to deal with changes that occur in business. Budget planning can be better predicted to still get the profits the business wants to achieve.
To create a good business development strategy, it is important to understand what organic and inorganic growth are and the differences between the two.
Business growth or development has become one of the determinants of the success or failure of a business itself.
Both in product sales and services, business growth needs to be thought through carefully so that the direction is always clear.
Well, so that you don't take the wrong steps, you must know what organic and inorganic growth are and the differences between the two.
Read more in the article below.
Quoted from Indeed, organic growth is the growth of a business that is obtained from the production of regular activities and operations such as product sales or services.
A company that wants to grow organically must utilize its business model, practices, and employees to increase sales and services.
The efforts made by a business to grow organically also vary, ranging from product innovation, improving services, advertising in the media, and others.
This is also the basic difference between organic and inorganic growth later.
Reported by Preferred CFO, here are some of the advantages of using the organic growth method:
Businesses that grow through inorganic growth carry out mergers and acquisitions or by expanding the company.
According to Indeed, inorganic growth can develop with several efforts such as opening a business in another location, taking out loans, or adding business lines.
Expansion or addition of business locations is an important part of inorganic growth, also an important effort for the development of the company.
Inorganic growth will increase the company's assets, operations, liabilities, and liquidity.
Despite the challenges of entering new markets and restructuring, inorganic growth has the following advantages:
Indeed says there are some basic things that are the differences between organic and inorganic growth.
In general, the difference between organic and inorganic growth can be seen from their meanings. Organic growth is a company strategy to develop internally or from within the company, while inorganic growth is from external/outside the company.
In addition to these basic things, here are some lists of differences between organic and inorganic growth:
The first fundamental difference between organic and inorganic growth in business is the timeframe of the impact that will be felt on the business.
Inorganic growth will have an impact on increasing in the short term through acquisitions or additions of business locations.
Meanwhile, increasing business with an organic growth strategy will require a longer and more stable period of time.
Inorganic growth will carry a big risk if you merge or acquire a company that has financial problems.
Another risk that may also arise is having to add business lines and enter new markets.
Meanwhile, the risk of organic growth tends to be lower because it is carried out simultaneously with efforts to develop existing products/services.
A business strategy using organic growth will focus more on the products/services that the company already has at that time, so that the impact on the business will not be too great.
Meanwhile, in inorganic growth, greater challenges must be faced because there could be a termination or replacement of new products/services in the company.
In terms of market competition, organic growth will experience tougher competition.
For inorganic growth itself, competition will be more focused because the merger of companies will make it easier to lead competition in the market.
For the future of the company, the difference between organic and inorganic growth can be seen from the rate or steps of development.
Organic growth will create a more stable future and a safer rate for the company's development.
While due to mergers or acquisitions, inorganic growth will make the company have more stakeholders who play a role in the company and reduce individual control.
One of the significant benefits of inorganic growth is the increase in resources from employees, experts, and other resources.
Meanwhile, organic growth has limitations because it relies on existing resources in the company.
Which is Better for Business?
Now, after knowing the difference between organic and inorganic growth, you need to choose the best of the two for your business.
Both have their own roles, advantages and risks in the development of the company. Not all companies or types of businesses are suitable for both.
If you want to develop a product or service, organic growth will be better. However, when the goal is to expand the company's business, you can adopt inorganic growth.
Companies with good business development are those that can adopt both business strategies in a balanced way.
In order not to choose the wrong business strategy, it is important to understand how to analyze both strategies.
The goal is of course to produce a strategy that can be implemented well and optimally.
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Have you ever wondered what forecasting is in the business world?
If you are running a business, making strategic decisions based on in-depth analysis and accurate predictions is very important. One tool that supports this process is forecasting.
Forecasting is not just predicting the future based on historical data; but also becomes the foundation for intelligent and adaptive planning in facing market dynamics.
This article will outline the importance of forecasting in a business context, revealing how this technique helps anticipate market changes, as well as supporting efficient resource allocation.
Forecasting is a technique for predicting future events based on historical data and current conditions.
In the business world, forecasting is used to estimate sales, market demand, or economic indicators.
Companies use forecasting results to make decisions about hiring, expansion, and other business strategies.
Investors also use forecasting to analyze stocks, determine transaction timing, and identify market trends.
Although forecasting attempts to predict the future, it is important to remember that the results are not always 100% accurate.
Because, there are several unexpected factors such as sudden economic changes or natural disasters that affect forecasting results.
After knowing what forecasting is, also know the method for carrying it out. Actually, there are two main approaches used in forecasting, namely qualitative methods and quantitative methods.
Both of course have their respective advantages and disadvantages. The following is the explanation:
This method is subjective and based on the judgments and opinions of experts or consumers. Qualitative methods are used when no past data is available.
Some examples of qualitative methods include:
The following are the advantages and weaknesses of qualitative methods:
Advantages:
Weaknesses:
This method is objective and mathematical, which uses numerical data from the past to make predictions for the future.
This method is suitable for use when there is sufficient past data and the data pattern is expected to continue in the future.
Some examples of quantitative methods include:
This method analyzes historical data (such as sales figures) to find patterns or trends.
For example, if sales always increase during the holiday season, we can predict that sales will increase again this year.
Assess the relationship between the dependent variable and one or more independent variables.
For example, companies can use regression analysis to understand how advertising spending affects sales.
By understanding this relationship, companies can make better plans.
This model combines economics, mathematics, and statistics to analyze economic data. For example, how changes in interest rates affect investments.
The following are the advantages and weaknesses of quantitative methods:
Advantages:
Weaknesses:
Forecasting in business is not just an ordinary prediction tool.
Rather, this technique is a strategic process for analyzing historical data to make smarter and more informed decisions.
In a business context, forecasting has several important objectives, including:
One of the main benefits of forecasting is that it helps businesses set realistic and measurable goals based on in-depth analysis of historical and current data.
By having accurate data, businesses can evaluate what is considered success in terms of change, growth, or improvement.
Forecasting also helps in budgeting by providing a clear picture of trends and changes that may occur in the market.
This allows businesses to allocate resources more efficiently, such as when it comes to products, services or marketing strategies.
Forecasting helps businesses to anticipate changes in the market.
By understanding emerging trends and changing consumer behavior, companies can take proactive steps to adapt their strategies and remain competitive in a dynamic marketplace.
By utilizing forecasting effectively, companies can position themselves strategically to face uncertainty and take advantage of existing opportunities.
After reading the explanation above, hopefully you understand what forecasting is and its purpose for business.
Although forecasting has many benefits, it is important to remember that it is not an exact science.
Companies must always be ready to adapt to unexpected changes and regularly evaluate and update their forecasting models.
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The GMS is a crucial forum where share owners gather to make important decisions that will affect the future of the company.
In it, there are intense discussions about company policies, performance evaluations of leaders, and vital decisions such as structural changes.
In this article, let's discuss GMS in more depth, starting from its meaning, function, to types.
A General Meeting of Shareholders (GMS) is an official meeting regularly held by a company and attended by the board of commissioners, directors and shareholders.
The GMS has special authority that is not owned by the board of commissioners or directors.
This is regulated in Law Number 40 of 2007 concerning Limited Liability Companies.
To hold a GMS, the company must fulfill the following requirements:
GMS function
The GMS is a forum where shareholders have the opportunity to be directly involved in making important company decisions. GMS has a very important function for the company, namely:
This meeting is a forum for shareholders to jointly formulate and review company policies for both the short and long term.
For example, whether the company will expand its business to new areas or whether it will launch new products.
These decisions are very important because they will affect the company's future growth and success.
One of the main agendas at the GMS is examining the company's financial reports.
Shareholders will look at whether the company made a profit, how much debt it has, and how money was used over the last year.
This is important to ensure that the company is well managed financially.
If there is a problem, shareholders can ask for an explanation and solution from company management.
The GMS is also an opportunity for shareholders to evaluate the performance of company executives such as the board of commissioners and directors.
They will see whether the leaders have carried out their duties well and achieved the targets they have set or not.
If their performance is less than satisfactory, shareholders can decide to replace them with other people who are more competent.
When a company makes profits, shareholders need to decide how those profits will be used.
At the GMS, they will discuss whether profits will be distributed to shareholders in the form of dividends or reinvested into the company for business development.
This decision must consider the company's short-term and long-term needs.
The GMS can change the basic rules that govern the company. These changes could be:
This decision must be approved by the majority of shareholders.
The aim is to ensure that this major change is carried out with the support of many parties so that the company remains stable and has a clear direction.
The GMS can also decide on the dissolution of the company if the company experiences serious financial problems or cannot continue its operations.
This decision is usually taken if the company experiences serious financial problems or cannot continue operations.
Dissolution of the company is the final step and requires approval from shareholders.
The GMS is an important forum where shareholders gather to make important decisions about the company's direction and policies.
Based on the time it is held, the GMS is divided into two types, namely the Annual General Meeting of Shareholders (AGMS) and the Extraordinary General Meeting of Shareholders (EGMS).
The AGMS is held at least once a year, no later than six months after the company's financial year ends.
The following are several important agenda items that are usually discussed at the AGMS:
The EGMS is held to discuss and decide on extraordinary or urgent matters that cannot be postponed until the next AGMS.
The following are some of the agendas that are usually discussed at the EGMS:
A GMS is an important meeting that is strictly regulated in accordance with the applicable regulations in the company's articles of association.
The following are the main stages in the mechanism for holding a GMS:
The summons for the GMS must be made by notifying all shareholders no later than 30 days before the implementation date.
The invitation must state the time, place and agenda that will be discussed at the meeting.
This is done to ensure that all company stakeholders can manage their schedules and participate in important discussions.
To be considered valid, the GMS must be attended by shareholders representing more than half of the total shares with voting rights of the company.
If the number of members is not met on the first day, the GMS can be continued on the next working day provided it is attended by shareholders representing more than 1/3 of the total number of shares with voting rights.
This is important to ensure that the decisions taken at the GMS reflect the will of the majority of shareholders.
The GMS agenda includes various strategic matters that influence the company's direction and policies.
Shareholders have the opportunity to discuss and decide on the company's annual report, financial reports, dividend distribution, appointment or dismissal of members of the board of commissioners and directors, as well as changes to the company's articles of association.
Decisions at the GMS are reached through deliberation to reach consensus. If there is no agreement, the final decision is taken by majority vote.
After the GMS is held, an official report will be prepared by the notary who was present at the meeting.
This report records the results of discussions, decisions taken, as well as voting results on each agenda item discussed.
The GMS report must be submitted to all shareholders no later than 30 days after the GMS is held. The aim is to ensure transparency and accountability of the company's decision-making process.
As explained above, the GMS is an important forum for shareholders to participate in monitoring and making strategic decisions for the company.
By following this clear and orderly mechanism, the GMS ensures that every decision taken is the result of a transparent and fair discussion in accordance with the interests of all shareholders.
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