As a new financial year rolls in, it’s a good time to give your small business finances a tidy up!
The daily grind and stresses of running a small business can often distract and exhaust many business owners, leaving them rushing and unprepared as they approach a new financial year.
It’s that time when we draw a line under our small business finances for one year, take a deep breath, and dive straight into the next.
This year, before leaping straight into it, stop and take a moment to take stock of your finances and begin the year with a fresh outlook.
These are our five ideas to get you started.
The Australian Government’s business website can help you understand your compulsory insurance requirements. It can also advise other types of cover you should consider, like personal insurances in the event you’re injured or become too ill to work.
Additionally, there are policies to protect your premises, your stock and machinery.
If you’ve had insurance for a while, consider shopping around to see if there are better options that may provide a better deal for you and/or your business.
2. Tax planning
The start of a new financial year is perfect for developing a forward strategy for your small business finances. To get organised and stay organised throughout the coming year, start by understanding your industry’s regulatory obligations and entitlements. Look at government concessions, asset write-offs and deductions.
- regularly review your profit and loss: monthly, quarterly, annually.
- track revenue to ensure your billing and collection procedures provides adequate cash flow.
- calculate and understand the cost of doing business; devote more time to activities that are the most profitable and help grow your business. You’ll be surprised how many business owners have little idea on the margins and profit on the various services and activities they provide
- A good business adviser can help you put a system in place that will keep your tax records organised and up-to-date throughout the year. It may even make your tax accountant smile. Why not call them to arrange a time to talk it through?
If you’re doing things a certain way because that’s how they’ve always been done, it may be time to cast a critical eye over your business procedures.
- better, faster or more efficient ways of doing things?
- technologies to simplify processes, e.g. point-of-sale (POS) systems?
- process bottlenecks or duplicated steps that can be safely bypassed?
- ways to automate manual processes like running reports, making appointments or paying regular accounts?
If you answered yes to any of the above questions, it’s time to reassess your systems to ensure your business is achieving the highest ROI possible.
4. Business tracking
Staying on top of business performance, trends and cash flow can eliminate surprises by spotting potential problems and identifying supply and demand patterns.
- analysing data and trends from previous years or seasons.
- looking for peaks and troughs in sales, job completion times and inefficient uses of labour.
- identifying what worked well and what didn’t work so well.
All of these steps will assist in keeping track of all your small business finances and help you identify areas of weakness and improvement.
5. Plan to grow
Once you know where you are, you should always be looking for ways to move forward.
Whatever your business’s growth strategy is, be sure you have the resources to support it.
Consider whether you’ll need to invest in machinery, supplies or specialist staff. How will you manage your finances if you’re going to grow?
Running your own business is hard work, but it’s also one of the most satisfying and rewardingthings you can do.
Richard Branson once said, “A business is simply an idea to make other people’s lives better”. So, this new financial year, start refreshed and set yourself up to make your life, your family’s life and your customers’ lives even better.
If you want to stay on top of your small business finances and kick-start your business’ growth, speak to a member of our team.