Well, it’s been quite a year (or three). Having emerged from lockdowns and wrestled with decisions about home vs office working, we started this year thinking things could get back to ‘normal’ (whatever that is).
Before we knew it, Russia had invaded Ukraine and the knock-on effects demonstrated what an interconnected world we live in. Energy prices hit record levels and sparked higher inflation than we’ve seen for decades (check out our earlier blog what inflation feels like). Political journalists struggled to keep up with the names of ministers as we got through countless secretaries of state.
Meanwhile, those of us in business tried to navigate this landscape, feeling like the ground was constantly moving beneath our feet. How do you forecast when all the constants are, well… changing? Is it worth having a forecast at all?
I’m sure we’ve all heard the saying ‘if you don’t know your destination, how can you ever hope to get there’. A road atlas (remember those) allowed you to work out a route, so you would know how to reach your destination. Today of course we all use satnav, Google Maps, Waze, etc. to navigate, because these apps give us something extra. They take into account the traffic, train delays and other disruption (inputs), constantly updating us on the best route to take to our destination.
That’s what a financial model can do for your business – if it has been well-scoped and designed, it allows you to select your preferred route from a number of options, and once you are on your way, adapt the route as new information becomes available so you can still reach your destination in the shortest time. You’re still navigating to the same objective, but you’re dealing with the unknowns that occur along the way, adapting your plan as you go. To stretch the analogy further, it should tell you if you have enough fuel (cash) to get there, or if you need to refill / recharge (refinance) en route.
If your model doesn’t allow you to do that, maybe it’s time to upgrade from a road atlas to something a little more responsive. That sounds like a good new year’s resolution – we look forward to discussing it with you!
The Numeritas Team would like to wish all our clients, suppliers, partners, and contacts a fabulous Christmas and we look forward to navigating 2023 with all of you!