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THE 5 KEY THREATS TO AUSTRALIAN WINERIES – WHAT TO DO?  (part 2)

To recap, threats were:

1.Demographic shift in consumer base

2.Reduced cellar door and restaurant sales

3.International trade tensions

4.Increased emphasis on e-commerce

5.Changing values of consumers

1.ONGOING DEMOGRAPHIC SHIFT OF CONSUMERS

Wineries must understand and deal with this.

One of the areas often overlooked by business owners in their planning is an exit plan. Whilst they may not be considering exiting the business in the near future, there will possibly come a time when you are considering it’s time to move on and you will want to ensure to the business is in good stead when you walk away which is why exit planning is so important.

There are any number of reasons the owner may wish to exit a business that they have invested (not just financially) so heavily into.

The below interview was conducted between Jonathan Englert, Founder of Andiron Group, and Nick Crawford – Regional Director at The CFO Centre.

THE EVOLVING ROLE OF THE CFO

Jonathan: Thanks a lot, Nick, for joining me to do a deep dive into what it is to be a CFO, what the life and the work entail.

So what’s a CFO?

Nick.

How much cash reserve cover should your business have?

Recently in discussions with clients the focus is still on effective reporting, strategy, banking relationships and the 4 levers that drive a business, but in these uncertain times a new question is being asked… how much cash cover should our business have? We currently have ($ x) based on an internal theory and are building with multiple bank accounts for key items etc.

Is your business in good shape for 2021?

Well what a year that was!

Many businesses will have had to make some significant changes to their strategy during 2020, and now can be a good time to reflect on these and see what has happened, whilst at the same time, looking to stabilise the business in preparation for moving forward in 2021 post Covid-19.

Peter O’Sullivan,

Why every business needs a CFO

A typical company finance function can be divided up into 3 areas, however many businesses believe the finance role is principally to produce accurate accounts.

Ask any bank manager and he or she will tell you the bank’s most problematic customers are those who don’t truly understand what is going on in their business. Some customers ask for finance or expect to maintain an overdraft,

ONGOING DEMOGRAPHIC SHIFT

Baby boomer’s wine purchases will diminish as they continue to leave the workforce. Unfortunately, research indicates that younger consumers are not picking  up the spending baton to replace boomer’s wine spending power. Thanks to high house prices, GFC career interruptions, the craft beer and spirit loving Generation X are more frugal and less engaged with wine. Wineries must engage more with younger customers…ignore them at your peril…they will soon outnumber boomers.

The CFO as a ‘Leader’

In the context of the 4 Roles of the CFO  (Chief Financial Officer), the role of Leader is viewed as the catalyst who brings the other 3 roles of Strategist, Operator & Guardian together to support & deliver the business owner’s expectations of long term growth. They will look to:

Challenge/Shift the thinking of small business owners
Look to drive competitive differentiation
Deliver funding through profit growth to drive long term value

A CFO can act as a guardian for your business, by forecasting your cashflow and profitability, setting meaningful targets and helping you monitor your progress against them so you achieve your goals.

Looking Ahead – Forecasts

While most accountants are very good at telling you what has happened, not everyone is good at looking ahead. Historical accounting records are vital to any business, but so is a forecast. A forecast acts as a red flag,