It’s a new financial year – the perfect opportunity to review your business and plan for the coming year! We’ve put together a list of ‘resolutions’ that you might like to consider.
1. Most new year’s resolutions involve a ‘health check’ – have you done one on your business?
It’s a great opportunity to consider things like:
- Do you know how you performed last year?
- How does that compare to previous years?
- What’s happening in your industry/region?
2. Do you have a strategic plan?
If not, now would be a great time to write one!
If you already have one, when was the last time you reviewed it?
- Is it still relevant?
- Are you on track to meet your goals?
- Are your objectives still the same?
- Does anything need to be updated? Removed? Added?
- Have you celebrated your wins??
3. Repeat after me….Budget is not a dirty word!
As in your personal life, if you spend more than you earn, you eventually end up in a world of pain. Spending time on developing a budget now will help you determine whether the objectives you identified in your strategic plan are affordable – and what impact they will have on your bottom line.
You could even have a series of ‘budget options’ that would show you the outcomes if certain variables changed – think of it like a stress test to determine how your performance will be affected by:
- An increase in sales (stretch targets)
- A decrease in sales
- An increase in price on a major expenditure item eg. Electricity, fuel, software etc
- An increase in the cost of goods
- Employing an additional staff member
4. Can you afford to pay your bills when they are due? What about paying yourself a wage?
It’s important to map out your cashflow forecast for the year. This will assist with your budgeting and ensure that you are meeting your obligations when they are due. Many expenses can be planned for – and while income is sometimes more difficult to predict, most businesses have some basic sales trends they follow so you should be able to give yourself a ballpark indication of when income is to be received.
5. Your strategic plan and budget will help you determine your profit – but how much more profit could you be making?
Reviewing each of these may assist you in becoming more profitable:
- How efficient is your team? Are there areas where you might improve efficiencies or invest in technology to assist in this?
- Can you improve your production processes?
- Are you using your business assets effectively?
- When was the last time you reviewed your costs or shopped around for a better deal on some of your services?
6. Finance options and needs change over time – now is a fantastic time to review your funding requirements and whether they are best suited to your current needs.
7. This may form part of your strategic plan, but you can never underestimate the value of a great marketing plan. Now’s the time to either review your existing one – or create a new one.
Marketing doesn't just involve advertising, it can include other things that improve your cash flow and bottom line such as:
- Sales based incentive programs for your team
- Identifying ways to get your clients to pay as quickly as possible
- Visual displays which promote high margin, large volume turnover items
- Tracking sales to see how different initiatives can have an impact
8. Risk management isn’t just having an alarm on the building. It’s a vital part of the success of any business and your ‘risks’ should be reviewed regularly.
Some things to consider are:
- What is your client mix? Does the majority of your income come from a relatively small group of clients or customers? What would happen to your business if they stopped buying from you?
- Do you have 1 key supplier that provides the majority of your product? What would happen if they weren’t able to supply you?
- We all rely on computer systems – what happened if you lost your computers for a day? A week? Longer? Could you operate without a computer? And if so, for how long?
- What about your electronic records? Do you have a daily backup procedure and a backup that is stored in a safe place? How often do you check that it works?
- Do you provide credit to your clients? Do you do a credit check on them before authorising this? And how do you manage collecting overdue payments?
This can all sound quite daunting – but the good news is that we can assist you with this. If you’d like us to help, give us a call to discuss your needs.