Most people simply associate the end of the financial year with the lodgement of tax returns and hopefully a bit of a refund at the end. And while the 30th June date does differentiate financial years there is so much more that business owners should be doing to ensure ongoing success.
As a certified advisor I talk to people from all different backgrounds to understand not just their aspirations but the challenges that they face. While each business is unique, taking the time to complete these three tasks will help keep your business on a path towards continued success.
Evaluate your performance
Now you should be monitoring your business performance on a regular basis, but if you haven't done so then now is the perfect time to evaluate things. I get it... there can be comfort in the unknown as it means that you don't need to acknowledge any shortfalls or accept responsibility for how things have gone. But isn't the definition of insanity doing the same things while expecting different results?
Historical data is often only reviewed well after the event by your tax accountant, and while it does serve a purpose of meeting your compliance obligations it is far too late for you as a business owner to gain any relevant insight from it. But when the same historical data is reviewed in a timely manner it can open up Pandora's Box, helping you understand what is working well and where your focus should be.
This often poses an issue however when I hear statements such as "but my financial data is not up to date" or even worse "my bookkeeper takes care of that kind of stuff". Just raise your hand and declare that you are just guessing with your business, and let me tell you there are plenty doing just that. So what advice can I give if this is you? Make it a priority right now to get things in order and understand how you are positioned. The future of your business may depend on it.
Through the evaluation process you may find that your business has absolutely crushed it. Great news right? While you are relishing in the success what you may fail to realise is that this success could be accompanied with a surprise - a larger than expected tax bill! People put off speaking to their tax accountant out of fear of what may come from it (just like that dentist appointment people never make). But in all honesty, the outcome isn't going to change and all you are doing is making matters worse while allowing it to play on your mind. Schedule an appointment with your tax accountant now to understand what options you have. Leaving it until after 30 June is expecting a miracle.... and I don't like your chances of that happening.
What is measured gets managed. Set a budget!
It amazes me at the number of businesses that do not have a budget set. Or they have one but it is in the original business plan that no one can locate and was from five years ago.
If you have taken the time to evaluate your business performance you will now have some valuable insight that you can use in establishing your budget for the year ahead. This will include both revenue and expenditure targets as well as expected debt reductions and the all important cashflow forecasts. Don't be scared of getting dirty in the detail throughout the process as it will ultimately help you evaluate your performance next year. For example, $10,000 in revenue each month sounds great but how are you going to achieve this? What products or services need to be sold? How many new customers will you need to achieve this? There are so many more questions that you need to answer which is why getting to this level of detail is essential.
Unlike your last business plan this budget isn't ready for filing once completed. Make sure that it is reviewed at least on a monthly basis and that you compare it to your actuals to highlight any problem areas.
Assess that business spark
You remember that spark you had when you first went into business? All that enthusiasm, the excitement of the limitless possibilities and the adventure of the unknown.... how would you rate that spark now? The spark in your business is what gives you the drive to achieve your goals and without it your business may find itself in a downward spiral.
The impact that your business is having on your personal life and relationships is also important to assess. The business was meant to make everything so much better for your family yet is that what has actually happened? Things such as personal enjoyment and work life balance are so very important. While the health of your business is essential to success it goes hand in hand with your own personal state - you must take care of both.
For those of you that realise the importance of acting now but may be unsure of where to turn to next, please do not hesitate to get in contact as Synergise My Business are here to help you. I hope that you all enjoy the Easter break and spend valuable time with your loved ones. If you find yourself too busy to be able to enjoy it then maybe you should check out my earlier insight "Will a break from business break your business".