Setting up your business for success this FY
With the stresses and strains of the end of the financial year passed, July is a great time for small business owners to reset and refocus for the year ahead.
Here we provide a roadmap of key considerations for small business owners to gear up for the new financial year.
Reflect, review, reset and refresh your goals and objectives.
While it’s a bit of a cliché, business planning and accountability to the plan are key to both ongoing business success and consistent decision making. And the start of a new financial year is a great time to sit down and re-visit your short-term goals and your longer-term business goals and strategy.
- Reflect: Look back on both the financial and operational goals and objectives you set last year and review how you tracked against these – did you exceed expectations or come in below your targets? And most importantly look at the reasons why – and use this to assist in future planning.
- Review: Ask yourself some key questions. Based on last year’s results and this year’s planning, are there any changes or improvements that need to be made to your strategy going forward? Are the current products and services meeting your customer’s needs?
- Reset: Reset your goals and objectives for next 12 months as well as your longer-term strategy – and importantly set up a plan to be accountable to and monitor this throughout the year. For example, establish monthly or quarterly management meetings.
- Refresh: Take time to ensure you are clear on the business you are running and building, including your future plans and role and the services you provide. Be clear on your target market and how you find and engage with them, and ensure your systems and processes are built to engage and deliver to your market.
By investing in some planning, you can ensure your decision making, operations and structures are all aligned and consistent with your vision and plan.
Take control of your business cash flow
One of the most critical elements of running a small business is managing your cash flow, so with your goals and objectives in place re-visit your cash flow planning, including;
- Short-term operational cash flow: Maintain a healthy business cash flow in the new financial year by ensuring invoices are raised in a timely and efficient manner, and statements and reminders are issued and followed up.
- Terms of trade: The new financial year is a great time to review and potentially reset your terms of trade with your suppliers and to ensure all terms of trade are clearly communicated.
- Future funding: Spend some time to revise your funding requirements based on your business planning. This not only includes ensuring your current financing arrangements are suitable, but also looking at any other short-term operational funding requirements and that any future growth and expansion funding requirements are being planned for.
Pay attention to your staff
For any small business the team are a critical ingredient in the business’ ongoing success – both financially, operationally and culturally. And a happy and productive workplace is key to this. So, it is important to spend some time with your staff at the beginning of a new financial year.
The new financial year can be a good time to conduct an annual review. This will not only ensure your business plans and objectives are communicated to the team but also so that their annual plan is aligned with the business plans.
Other considerations include, are there any significant skills gaps within your workforce that is holding your business back? Are you staffing levels aligned with your goals and needs in the new year? What internal and external training courses can you plan through the year to boost the skills of your existing staff.
Close out the prior year’s financials
There may be benefit in putting aside time to finalise and close out the previous year’s financials and prepare your tax return early in the new year to get a more accurate picture of your cash flow heading into the financial year. This will help you to concentrate on growing your business.
Managing your stock
For those business managing stock levels, take the time to review these. This includes reviewing last financial year’s sales figures to determine upcoming seasonal peaks and troughs, as well as this year’s growth projections. This will help manage stock levels and ensure you don’t have money tied up in goods that you may not necessarily be able to sell. For overstocked items you could consider offering discounts to your customers to bring the cash back into the business.
Anthony Landahl, managing director, Equilibria Finance
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