Can you believe we are nearly at the end of another year? For some, 2016 was a tough year and it’s a good time to take a step back and look at what’s working in the business and what needs working on. One thing we all understand is, if you keep doing things the same way, at best you’ll get the same results. This time of year can be pressured and frantic but if you want to take your business to the next level you need to make some time to do a review.
Below are our top tips for a prosperous New Year:
1. Plot and Plan
To prosper you need to have a plan that includes reading future trends in the market. You can then formulate strategies to minimise the bumps in the road and capitalise on emerging opportunities. Unfortunately most business owners fail to plan, sometimes because they don’t know where to start. We recommend you think about where the business is NOW, where you want the business to be in the FUTURE, and develop an action plan to identify the steps of how you’re going to get there.
2. Know Your Numbers
Knowledge is power and while a lot of entrepreneurs prefer the product development aspect of the business, you can’t afford to ignore the numbers. In business, without a financial road map or budget, all roads lead to nowhere. A budget lets you forecast your future position and you can measure and monitor actual performance against your projections. It keeps things ‘real’ and makes you accountable. It forces you to think about your business, your financial assumptions and then gives you a reality check when you compare actual figures against your expectations.
Here are some key financial questions that you need to know the answers to:
a) Do you know your seasonal revenue lumps and bumps? When do sales peak, when do expenses peak? What strategies do you use to balance out the troughs?
b) What is your cash flow (or available cash) right now? Are you going to need an injection of funds to get you through the quieter months ahead? There’s no point running to the bank for finance at the eleventh hour. They are typically slow to respond and an impatient business owner is a sure sign of a business under stress.
c) What are your working capital requirements? This is particularly important during a growth stage of your business and you can’t grow your business if you don’t know how much money you’re going to need to fund that growth.
Is Your Business Structure Relevant?
If you haven’t reviewed your business structure for a few years, it could be time. Circumstances change and key events like marriage or a major asset acquisition can mean your old structure is redundant. Structures that worked years ago may no longer be relevant and changes to tax laws, your asset position and personal circumstances can trigger a review.
If you need help putting your plan together for 2017, please contact us today.