5 End of Financial Year Resolutions for your Small Business
Getting your personal finances in order at the start of the new financial year is nothing new – we even looked at that in a recent article! But what about those of us in business? Whether your 2018/19 financial year was one of your best or one of your toughest, there’s always room for improvement. Keeping up with our resolutions in life often comes down to setting reasonable, actionable and measurable goals – and here are 5 that you can set (and keep) in this new financial year.
1- Create or update your strategic plan
As important as goals themselves are the frameworks that surround them – you need to know not only what you want to achieve, but also why you want to achieve it, and how it all fits into the bigger picture. So, before jumping in and setting goals, it pays to have an overall strategic plan in place for your business. You may already have a strategic plan in place, in which case this is a perfect time to revisit it and make and changes where necessary. Have your business objectives shifted? Has the industry brought about some new opportunities or hurdles? Are you looking to grow? These are some questions that can feed into an updated plan, or guide the creation of an initial plan. Once you have the structure established, set your subsequent goals with these in mind, and ensure they are trackable and achievable.
2- Draw up your budget
Down to the nitty gritty! Your business’ budget needs to line up with your strategic plan, take into account your resources (and allocate them appropriately), include assumptions about what might happen in the upcoming financial year, expenditure vs expected income, and even some stress testing. Stress testing is a great way to ensure that you have considered unexpected hiccups through the year, which could come in the form of, for example, a loss of revenue; repairs to your workshop; an increase in the cost of your materials; or anything else that may adversely, and suddenly, affect your bottom line. Importantly, you should ensure that if your new financial year resolutions include drawing up a budget, you shouldn’t set it and forget it. Revisit it periodically throughout the year on a regular basis, and compare it to your actual results.
3- Create a cash flow forecast
Many small businesses struggle with cash flow. Having the cash available to make purchases, repair equipment, pay wages or even just to put aside for a rainy day is a significant factor in the success of your business. A comprehensive cash flow forecast should take into account your average debtor days, how much you expect to make from sales, your regular expenses, and some leeway on all of these to account for the unexpected. Once you have a handle on those points, you should be able to see clearly any peaks and troughs in your business’ cash flow, and plan spending accordingly. It may also highlight some unnecessary spending, or perhaps even show some potential for greater investment in your business. Either way, it’s smart to be prepared.
4- Develop a marketing strategy/plan
Once you’ve got the numbers out of the way, take a look at the face of your business. Your presence in the market can determine whether you sink or swim, and your potential customer base won’t find you if you don’t put yourself out there. This is where a marketing strategy comes in. Take stock of the various touch points the market has with your business at the moment – this might be a basic website, a Facebook page, and some sporadic advertising in the local newspaper. Next, ask yourself how these channels and their various levels of success contribute to your overall strategic plan. Your broader marketing strategy should align with your business plan, and seek to bring in new business, retain previous customers, and improve sales. Some practical things to include in your marketing strategy could include: measure the success of each marketing campaign to determine its effectiveness; segment your audience and target each segment with an appropriate product; or set a goal to increase your web traffic by 50% over the previous financial year by investing in Google Ads. Again, no matter what your goals are, be sure to make them measurable and time-bound.
5- Explore growth options
In the increasingly competitive marketplace, it’s crucial to not only survive, but thrive. Growing your business may be a daunting process, but with the right support and resources, you can turn a one-man-show into a high-value and profitable enterprise. If you’re passively keeping an eye out for opportunities to come along, now is the time to start actively taking advantage of these. There might be a local business in the same industry that’s looking to sell up and move on – acquisitions, when undertaken diligently and thoroughly, can be a great way to supplement organic growth with a whole new collection of existing customers. Does your business need new premises to expand your reach and improve your service? Maybe it’s time to look into your finance options in order to take that next step. Whatever it might be, it will be different for every business, so consider what you want to achieve, and then engage with the professionals in that space to make it happen.
Are you ready to take your business to the next level in the 2020 financial year? McKinley Plowman’s diverse and experienced team have developed a reputation over time for transforming small businesses and helping them achieve great things. From accounting and tax to business improvement and finance, marketing and branding, and everything in between, you’ll find everything you need under the one roof. We’d love to chat more about how we can help your business grow – give us a call on 08 9301 2200 or visit www.mckinleyplowman.com.au to book your FREE initial consultation.
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