The new financial year is now here and with so many new changes on the horizon for small and medium sized businesses, it’s important to make sure that your financial goals and business resolutions are in line so that you (and your business) can have the most successful 2015 financial year. This week we provide some helpful tips to get business owners started on the right track.
Re-evaluate your business
Most small to medium-sized businesses start out perhaps as a partnership or with a small team. If your business has had a successful year, it may be time to start thinking about how you can expand to better serve your needs and the needs of your clients. Consider the possibility of incorporating or forming a proprietary company which will help to cover you from some of the financial and legal risks.
This is also a great time to reconsider the goals and mission statement of your business. Have you found that in your day to day workings you have shifted your focus, or are you still on track to do what you started?
The start of the financial year is the perfect time to consider your business goals for the 2015 financial year. When considering goals, think about planning to expand or consolidate your business, or maintain the current direction of your business. For example, if you plan to expand your business this normally requires cash flow or capital to fund the expansion.
Consider altering your goals to match your new direction. If it is not working for you, you may want to think about ways you can get your business back on track.
Strategies involve more documentation in relation to how you plan to achieve your goals. If, for example, you want to expand your business by, say, 20% you ideally need to increase sales by 20%, from existing or new clients, or a combination of both. It’s important to determine the best method as to how you will generate the new business. Document these strategies in your marketing plan, eg will you undertake a direct marketing strategy or an online marketing strategy? Will you engage a marketing consultant to assist you with your marketing or attempt to manage it inhouse? These types of strategies need to be factored in before any money is spent.
You may, for example, also choose to conduct a client seminar to promote your latest product(s) or update your website in readiness for an online marketing campaign later in the year. Prior to implementing anything, you firstly need to determine what number of new business clients you expect to generate from your seminar or promotion, what revenue that would result in, and what type of revenue you will derive from your marketing campaign.
There is no point implementing the strategy if the anticipated costs to implement are greater than the anticipated revenue. This is where many businesses fail and ultimately become insolvent – business owners have great ideas but they often do not have the cash flow to implement the strategy. Furthermore, if the strategy is changed based on what they can afford, rather than the original planned strategy, this may not lead to the increase in planned revenue.
Implement your policies to achieve your goals
Order your policies in a timetable allocating responsibilities and deadlines. For example, what needs to be done to implement a successful seminar? Think about the planning involved: Do you have sufficient space to hold the seminar inhouse or will you need to book an external venue? Do you need a graphic artist to design professional invitations that will create a call to action, or will you produce the invitations inhouse? Will you cater for guests conservatively or extravagantly? Do you need to hire equipment? What will be the total costs to co-ordinate the seminar? What is the timeline to complete each task in time for the seminar kick off?
Cash flow – is there enough?
The final stage of planning involves meeting with your accountant or financial adviser to finalise your business cash flow – not just the costs involved in implementing the marketing strategies. The outcome should also determine whether the strategy will work, and whether you will have more cash flow at the end of the year than you had at the start. If not, you need to reconsider you goals, strategies and policies again to ensure that your financial position is not made worse.
Talk to a professional
When dealing with your business, especially your finances, consult firstly with your Financial Planner or Chartered Accountant. Look at how much you have already paid in taxes so that you have a solid estimate as to what you will be paying in the new year. A good Chartered Accountant will also be able to help you create a financial plan that will help you save money for the year. Your conversation shouldn’t just centre around short term fixes or ideas, but also on long term strategies that will help you build your business for the future.
Involve others in goal setting and planning
It’s your business and your financial stake, and you are the one taking the risk. But your team members are invested in the business too – they spend their time, effort, and energy. Would you like them to be more personally invested in the success of the business and think more like owners? If so, involve them in the goals and planning for the business – ie drive employee engagement. As the business owner, set the overall direction, but let your staff be involved in the creation of the outcomes. Involving them in this important work is a big key to greater involvement, commitment and success.
Employee motivation is key
Keep goals in front of yourself and everyone one else with regular reminding. Help staff keep their goals in mind and remind them of what success looks like – from using bulletin boards to regular conversations in team meetings. Find several that work for you and your team and implement them.
Quinn Financial Planning has the tools to help you with your 2015 financial year business resolutions. For more advice on your business’ financial goals for this financial year contact the Financial Planners here at Quinns by submitting an online enquiry or calling us on +612 9580 9166 to book an appointment.
Disclaimer: The information in this document does not take into account your personal objectives, financial situation or needs and so you should consider its appropriateness having regard to these factors before acting on it. It is important that your personal circumstances are taken into account before making any financial decision and it is recommended that you seek assistance from your financial adviser.