Planning during uncertain times

This week's Inflation Report from the Bank of England was again notable for the wide range of predictions of future GDP and inflation rates (there's a Power Point presentation of this here).

With the Bank of England not knowing where the economy's going, how can businesses plan? By building the uncertainty into their plans, that's how.

An article on this aimed at CFOs (chief finance officers) was published in the US accountancy journal 'AICPA CPA Insider' last week and it's well worth a read:

In terms of market fluctuations, is this recession a “V,” “W” or an “L”? The world’s greatest economic minds cannot seem to agree. It’s time for CFOs to accept these uncertainties and get down to the business of planning
for 2010.

With so much instability in the business environment, every objective you set will take longer to achieve, not to mention to gain consensus on internally. Consider a few: revenue growth, cost cutting continuations, hiring, obtaining financing, attracting new investors and locking in longer-term supplier contracts. Strategies that once worked to reach these goals may no longer be effective. It’s a situation that can paralyze the most confident financial leaders. Despite the speed of change and complexity of the environment, it’s important to look beyond the headlines and consider all of the facts. Look at your liquidity, your industry and your income stream, then take a stand about where you think your business is going and create an operating plan for next year.

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