Seven timely reminders before EOFY.
It’s that time of year again and the End of Financial Year is upon us. Before 30 June take a moment to review your business so you can start the new financial year off on the right track.
1. Review your business story
How has your business changed in the past year? As your business evolves to cope with your clients ever increasing expectations and technology advancements, consider any improvements you made and if this has now changed your goals.
Do a financial health check to consider your current cash flow, profitability and return on investment. If possible, see if there are benchmark figures for your industry available and compare your business performance to these.
Often, businesses forget to look at their systems and processes. Whilst it can be a tedious task to review and implement a new way of doing things, the long-term benefits of implementing something that will save you time, is a business win.
The aim of this exercise is to identify any weaknesses you find and to develop a plan to address them. You don’t need to do all the work yourself either, get your staff to help out and come up with ways to improve the business.
Actions out of this process should be documented, assigned to an owner and have clear timeframes agreed for resolution.
2. Have a clear strategy - Look at where you want to be in the future
Have a clear understanding of:
• How you are unique.
• Understand your industry, its unique qualities and opportunities.
• Understand your customer, who you are going to serve and how you are going to do it. You can’t be everything to everyone.
3. Prepare a budget
Ensure that you have, or have access to sufficient resources to achieve your objectives.
Regularly monitor your actual results and identify the reasons for variations.
4. Cash flow is still king
Many businesses discover that even though their business is profitable, cash flow problems can be its downfall by stopping expansion plans or not having money available at the right time to increase staff or product lines. Ensure you understand any seasonal fluctuations in your business and also ensure you have a good invoicing system. Most accounting packages can send out automated reminders to customers who are slow to pay or perhaps it may be necessary to allocate a little more energy to chase up older debtors.
5. Review your marketing plan
Is it achieving your objectives?
Measure the success of each campaign or activity to determine its effectiveness. Increase focus on
products with a high margin and reward your employees for achieving targets in your preferred areas.
The reward must be easy to understand and easily measured, monitored and communicated during the financial year.
6. Review your risk management plan
Some key issues to address might be:
• Major damage at your own, a key supplier or key customers premises. This could have a disastrous effect on your business.
• Loss of a key supplier.
• Failure of a key customer.
• Loss or illness of key staff members.
• Damage to your reputation through a social media attack.
Take some time to think about your options, if any of these, or similar events occurred.
7. Don’t be afraid to bring in the professionals
A lot of businesses make the mistake of not reaching out to the specialists when they need help. There are a wide range of specialists, from business coaches, accountants, marketers, investments advisors etc. out there ready to help you achieve your objectives and keep you on track.
Finally, although it may appear hard, it will put you in a good position to explore new
opportunities, minimise risk, maximise profits and help you sleep better at night.Close