In the pursuit of growth, business owners can not just rely on financial and control systems to underpin strong performance. However, these are two fundamental components of an integrated approach to successful business management.

• To be truly successful a business must have high profit margins and be one of the lowest cost producers of its products or services relative to its competition.
• A comparatively low break-even point will enable survival in depressed market conditions and enable market and pricing positions to be strengthened when weaker competitors are being hurt or driven out of the market.
• A higher than average profit margin enables the business to generate more funds internally to sustain growth.
• A business with a strong financial management capacity has several important advantages:

a)      Good cost information enables management to direct its energies towards those products or services with the highest potential for profit contribution.

b)      The cost system should pinpoint where production, marketing, and research costs are inefficient even in sub parts of the operation.

c)       Capital conservation through tight control of fixed and working capital investments.

• A critical finance function is to provide an early warning system to identify influences that could threaten the profit plan sufficiently ahead of time to devise remedial plans to minimise adverse surprises.

Growth orientated businesses recognise the critical importance of setting in place appropriate control systems which will provide them with the formal means of managing the business and implementing best practice. Control systems are generally a collection of subsystems, the main elements being:

• Structure of the organisation including responsibility centres
• Measures of performance
• Planning and budgeting
• Capital budgeting
• Employee incentives and rewards

Benefits that can be derived as a result of budgeting include:

1. Provides an instrument into which goals, objectives and action plans can be incorporated
2. Serves to provide a framework for business operations from which different functions and responsibilities can be co-ordinated
3. Incentives can be built into KPI’as measurable standards
4. Enables comparative analysis across performance indicators and enhances cost control measures.
5.  Business performance can be monitored and controlled and corrective action taken when necessary
6.  Over-riding benefit is the ability to increase management decision-making ability