30 Mar 4 Ways to Kick Start your New Financial Year
If you have not read our 6 Ways to End the year right article. Do this now.
Once you have reviewed your past performance and got your records ready for your end of year accounting it is time to look to your future.
If your business is meeting or exceeding your goals and expectations. That’s fantastic. Anything you do from now is maintenance, management or more. More freedom, more peace of mind, or more success. It’s your choice.
If you are not quite there yet. Take action and make your goals happen and claim your More.
What do you want to achieve?
Goals are personal, if things haven’t been going how you would like. The first step is to identify what you would like to fix. Have you been working too hard? Is profit or cashflow struggling? Find out what your pain point is, and identify the strategies to eliminate the struggle. Set goals for the coming financial year and future that inspire and excite you. It is time to Achieve
1 Update your Business plan
Have you completed a business plan recently? A business plan is where you set realistic and measurable goals and clear strategies to achieve your goals. Successful businesses update their business plan every year, and regularly review throughout the year.
Completing a business plan helps increase the level of growth, profitability and cashflow in your business, and provides a clear outline of what you need to do to unlock your potential. If you have not completed a business plan recently, this is a great time to do so. There are plenty of templates available online or you could talk to us about our Business Planning Workshop. All of our workshops are available either online or in person.
2 Set a Financial Forecast for the year.
As part of a business plan, a financial forecast is completed every year by successful businesses. Performance throughout the year is compared against the target.
- Revenue – Look at last year’s income on a monthly basis, then set a target for the coming year
- Direct Costs – These are costs directly related to selling your product and service. These will typically alter in relation to your sales. Set your budget for the coming year
- Overhead costs – These are the administration and general expenses of running your business. Review last year’s expenses, line by line from your profit and loss then set a budget for the coming year
- What’s left is profit? How does this compare with your expectations?
If your profit is not where you would like it to be, crunch those numbers again and produce strategies to move the dial.
- What could you do to increase sales?
- Can you improve your gross profit by negotiating better pricing on your direct costs and key materials for your business?
- Are you getting bang for your buck on how you spend your money and is it adding value to your business? Look at your expenditure and see if you can identify low value costs or wastage. General expenses, subscriptions, entertainment, interest and penalties are common culprits.
- Managing expenditure is not always about spending less, but spending intentionally. Investing in the following can help you move your dial
- Marketing – Good marketing can grow your business and increase sales
- Technology – time saving and quality enhancing technology can help you achieve more with less effort and increase profits, increase freedom and remove stress
- Education – Developing your skills and expertise with formal education, books, online training
- Quality – Are you paying too little for some of your products or services? If you are paying well below “the market” you may not be getting the bargain you think. Quality and value can be a better benchmark. Older vehicles or equipment can be cheaper in outlay, but if they do not work well or cost extra in maintenance is it really a bargain. Like equipment, paying cheaper rates for services may indicate the person is poorly qualified or taking short cuts. Ask you self, what do you think of the quality of the work your low-priced competitors do?
To really excel financially, you could take your budgeting to the next level. We have free templates for creating a personal budget. Ask us if you would like to receive this.
3 What cash is available
Once you have completed a Financial Forecast the next step is to translate that into cash. Cash is king. It’s what we pay the bills and our taxes with, and how we enjoy some of life’s pleasures. Treat your cash with the respect it deserves.
- Look at your current bank balance, then identify your monthly cash inflows (income) and outgoings (expenses, loan repayments and drawings)
- Prepare your cashflow forecast on a monthly basis, and then compare this with actual
Preparing your cashflow forecast will help you answer the following questions.
- Are there any months where outgoings are more than incomings? Make a plan to deal with these by either deferring expenditure, creating a cash buffer or saving for the dip or organising finance well in advance
- Is the business generating enough cash to invest in business growth or necessary plant and equipment?
- Is the business generating enough cash to service debt?
- Is the business generating enough cash to meet your income expectations?
4 Take Action
Action gets results. Once you have identified an opportunity for growth, or the need to implement change do not hold back. Set the goal and chase the dream. Remember when you first started your business, the excitement, enthusiasm, and everything you had to learn and do to get the idea off the ground. Claim that back.
- Set your goals
- Identify your strategy
- Get the help you need to make your goals a reality
- Learn more, update and increase your knowledge on building and running a successful business.
- Act, create good business habits and do the work
Sometimes taking action can be hard, do don’t need to go it alone. Phone us now to book your FREE Proactive Accounting Meeting.
If you’re not quite there yet. Take action and make your goals happen and claim your More. You can start this process by reading our Kick start your New Financial Year article and contacting us to book a FREE Proactive Accounting Meeting.