The end of financial year is a good time for business owners to get things in order.
And this isn’t just related to tax or finances, it’s a great opportunity to do a stocktake across the business.
Here’s 3 things to think about as we approach the EOFY:
1. Update your business plan
At its core, your business plan provides a summary of:
- Where you are now
- Where you want to be
- How you are going to get there.
It helps you get clear on what you need to achieve by when, and should be guiding how you allocate your resources for the coming financial year. It should also contain an updated budget for the coming year.
This update should be completed by latest 31 May, so that you can have everything in order by EOFY. If it hasn’t been done, make it a goal to be done by June 30. As they say, better late than never!
And as we pointed out in our recent article, banks and lenders will be making life very difficult if you don’t have a well-considered and up-to-date business plan to take to them.
2. Undertake a review
This is a great time to undertake a review of how things are tracking against your goals or budget. Some simple things to review are:
- Revenue against targets: Did you make the income you thought you would?
- Profitability: Has this revenue translated into profitability? If not, why not? Higher than expected costs? Lower than anticipated sales? Were these a result of unforeseen circumstances – or do you need to go back and review your budget inputs?
- Sales, % of total sales and profitability per customer: Who was your most valuable customer?
- Marketing spend and resultant sales: How useful are your various marketing efforts?
- Staff adherence with KPIs: How well have your staff met their KPIs?
And, if you don’t have budgets / targets / KPIs in place for your business, now is a great time to start setting them for the next Financial Year.
3. Last minute business expenses
As always, if you have any legitimate business expenses you have been meaning to spend some money on, now is the time to do it.
And we don’t mean buy another Landcruiser… (if that’s your gig). This is a good time to be reviewing how you can spend money to make money!
Some examples:
- Your tax accountant may be a necessary expense at this time of year, but they should be doing far more than basic compliance. They should be working with you to set targets and budgets to meet your financial and wealth goals, and providing strategies on how you can achieve them. If they aren’t offering these things, it might be an opportune time to look elsewhere for a new accountant, or at least request a higher level of service from your current accountant.
- Investing in services such as marketing support, human resource management and business systems development will make your life a lot easier going forward, and give you greater scope to spend time doing the things that you are good at, therefore making the business far more money.
- Professional development is (in our opinion) one of the highest value activities you can spend your money on. Developing yourself as a business owner or manager, and enhancing your management or leadership skills, by being exposed to outside the square thinking, is a very powerful activity. Often it will have immediate effects – e.g. more effective team management – but it will generally always have longer term benefits that just keep on giving as you grow personally.
Over to you…
If investing in the future of your business is of interest to you, ABDI are running our 3 month Agri-Business by Design – fast track business management programs in several locations across NSW and QLD in 2018.
