Have you ever thought about what your bottom line would look like if you added a new employee, raised the prices of your products, or invested in new equipment? Palo Alto Software, the world leader in small business planning and financial management software, today announced a new feature for its renowned flagship product LivePlan. The new “What If” scenario forecasting feature was created to help small business owners, 44 percent of whom say a top challenge facing their business in 2016 is cash flow management.
“One of the best ways a small business owner, or a strategic advisor, can gain insight into how to grow their business is by developing strategic forecasts which include ‘What If’ Scenarios. Combining these financial models with the information LivePlan has on industry benchmarks gives the business owner a great vantage point to see where their business can improve, and where it is doing well. Without these insights, maintaining cash flow and running a fiscally-healthy business can be incredibly difficult,” says Sabrina Parsons, CEO of Palo Alto Software. “Quite often, small business owners fail to realize that fast growth—while a ‘best-case scenario’—creates an increased pressure for cash, and often requires a small business owner to be prepared with additional financing. That’s why we created ‘What If’ scenarios: so owners and advisors can prepare for both the best and worst, to ensure the business stays afloat.”
In addition to this new business modeling feature, LivePlan has also added seven additional metrics to its Benchmarking feature. The new Benchmarks provide deeper insights that now allow users to compare productivity metrics like monthly revenue per employee, monthly net profit per employee, as well as spending metrics like percentage of revenue spent on marketing, to similar businesses within a user's industry. Small business owners can create a strategic forecast, iterate on that forecast with “What If” scenarios, and then see how their financials stack up against industry standards. These new Industry Benchmark numbers give a small business owner better information to make sure their business is on track, and if it is not, it shows them where they might be able to improve.
These powerful new LivePlan features are especially important for accountants and strategic advisors who advise their small business clients on both short-term and long-term strategies and best practices of financial management. For many business owners who don’t have a financial background, turning to their accountants and bookkeepers can mean the difference between failure and success. By regularly reviewing forecasts, hypothetical scenarios, and key financial indicators with strategic advisors, small business owners stand to gain better insight into cash flow management, and control over it.