LAEDC 2017-2018 Economic Forecast And Industry Outlook | Trumpcare Update
The Entrepreneurial Insight for May 2017 edition is available for your review. In this edition, there is a link to the LAEDC 2017-2018 Economic Forecast and Industry Outlook for Southern California and major metro areas. If you are interested and/or have a need for regional economic projections, this is a good reference. Also, in our IMHO section we provide our spin on the healthcare changes being contemplated in Washington D.C.
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LAEDC 2017-2018 Economic Forecast and Industry Outlook
Los Angeles Economic Outlook Data
Hope you had a productive 1st quarter 2017, despite the commotion in Washington, D.C. The Los Angeles Economic Development Corporation (LAEDC) recently released their 2017-2018 Economic Forecast and Industry Outlook, including projections at the national, California and Southern California-county levels for 2017 and 2018.
The projections for Los Angeles county could be classified as steady as she goes. There is very little change projected in in their forecasts, including the following: a) unemployment is projected to move from 5.1% in 2016 to 4.9% in 2018; b) county-wide population is projected to grow from 10.2M in 2016 to 10.4M in 2018; c) county-wide real GDP growth is projected to be about the same for the next couple of years, at about 2.5% (a slight uptick from 2016 GDP growth of 2.2%). It appears that after many years of steady improvement in county-wide economic indicators, trends have flattened out.
Though many of our clients completed their 2017 financial plans rather late this year, from our micro-economic perspective, nearly all of them are projecting 10% or higher 2017 top-line growth, which is more encouraging than the LAEDC’s projections. Through the first quarter, nearly all of our clients are exceeding their projections, creating opportunities to more aggressively pay down debt, purchase new capital equipment, and pursue adding new sales/marketing resources. Business financial plans are the basis for sound decision making, providing our clients with the confidence needed to make strategic investments that will produce results for years to come.
To learn more about the importance of business financial planning, please see our post titled “Why Business Financial Planning Matters“. If you need help getting your business to the next level, contact Profitwyse today.
About the Author
Chase Morrison provides CFO services, utilizing Profitwyse’s 3D Growth Platform™, enabling his business owner clients to more readily achieve their goals for wealth creation and family legacy. Contact him today to learn how your business can hit the accelerator using Profitwyse’s proven platform.
An excellent article from Inc. Magazine, titled “Here’s When, Why and How to Hire a CFO (And Yes, You Can Afford It)” authored by Marla Tabaka. As a CFO consulting services firm, we completely concur with M. Tabaka’s points. One of the big takeaways is that engaging a CFO services advisor will pay big dividends well beyond the cost. Relative to the cost, there are numerous alternatives to hiring a full-time CFO, that make accessing experienced talent very affordable. More on that in a minute.
In our day-to-day interaction with our clients, all of whom are actual business owners, we can tell you that none of them started their businesses to spend time improving their accounting skills. Most all of them excel at sales and marketing. But that sales and marketing focus produces a large blind spot in those organizations, unless business owners proactively engage business advisors, such as CFO service providers, who can shine a bright light on those weaknesses.
Why You Need a CFO #1: Financial Reporting Basics
Regardless of accounting system, your accounting information can be broken down into two components: 1) list data; and 2) transactional data. List data includes the chart of accounts, customer list, vendor list, projects, parts, etc. Transactional data are the actual accounting entries that are processed when posting invoices, writing checks, scrapping inventory, paying a vendor, and the like. Depending on the transaction, one or more list items will be referenced. For example, an invoice will reference an account, a customer, possibly a project, possibly a part number, and other information. A well thought out accounting configuration adds significant benefit to understanding how your business is performing. The goal of financial analysis and reporting is to leverage all this information to produce actionable intelligence for business owners and other stakeholders.
Why You Need a CFO #2: Financial Reporting Process
Financial reporting starts with an efficient accounting close process. Does your business have a close calendar that includes dates when your financial records will be closed for the month as well as what close processes need to be performed and by whom? There are a number of positive effects when you diligently close your books on a monthly basis and everyone understands their roles in the process.
The next step is having an established set of financial reports that are consistently reviewed. At a minimum this would include a trended profit and loss statement as well as a balance sheet. If your business has a plan, as nearly all of our clients have, then reports comparing current-month and year-to-date performance vs. plan are a necessity. There are other reports required at quarter ends. You should review both your accounts payable and accounts receivable aging reports for potential adjustments and errors on a quarterly basis. Additionally, analyzing your other balance sheet accounts for accuracy, on a quarterly basis, is an imperative.
Why You Need a CFO #3: Financial Analysis
The reward for all this work is the ability to perform financial analysis and convert your findings into actionable intelligence. By actionable intelligence, we mean you are able to identify trends, potential opportunities and take timely action to help you grow your business. Additionally, distributing financial performance data to senior managers and other stakeholders keeps everyone’s focus on company goals and objectives.
