As another financial year comes hurtling to an end it’s a great time to pause and reflect on what you can do to ensure FY 2018 is all you want it to be. Here are my top 5 tips in preparation for a new year. Tackle one a week and you will be on track to start the year with confidence and a recipe for success.
1. Set a budget for the year
Assessing financial performance is subjective. To know whether you have succeeded you need to be able to measure your results against an agreed plan (or budget). Having a budget also allows you to make financial decisions around setting revenue budgets and sales strategies, making decisions to invest in capital expenditure and team development. Importantly, it enables you to allocate personal remuneration and drawings without fear of unexpected bills or a cashflow crisis you didn’t see coming.
Most SME owners start with a good idea, an identified market niche and a tremendous amount of enthusiasm to drive their vision to succeed. But to what end? Having a clear financial goal in mind assists in shaping your broader business strategy for the year and also provides a sense of purpose to your company.
2. Set your top 5 priorities
Setting clear and concise goals gives you focus and direction. By identifying the 5 most important things to get done for you to be able to meet or exceed your financial budget you will ensure that your hard work pays rewards as your activity and efforts are directly linked to factors which contribute to your goals.
Of your 5 priorities it is also great practice to identify the number 1 priority – the one goal which is the most important thing for the business to achieve. You may also find that your top 5 priorities contain longer term projects, if so, identifying shorter term milestones or actions related to each one can keep it achievable and ensure you are making progress with steps in the right direction.
What you focus on gets done.
3. Use an advisory board
Being in business can be lonely, and being busy can mean time passes by without stopping to check on your progress. Implementing an Advisory Board provides owners a sounding board, guidance, and an outside perspective to hold you personally accountable. It is a great way to break the dynamic from working IN the business, to working ON the business.
I recommend at least a quarterly cycle of meetings, including a meeting agenda and financial reports (compared to your budget).
The Advisory Board team may be limited to one or two individuals (depending on the size and complexity of the business and the internal skills in the business) and meetings should be kept to 2 or 3 hours maximum. In my experience, businesses with an Advisory Board more often meet their financial targets and stay on track with their strategic priorities than those without one.
4. Streamline a process
Like decluttering your house during a spring clean, finding an inefficient process in your business and streamlining it can reap great rewards. For business efficiency as well as staff satisfaction.
We live in an age where technology can provide solutions for all sorts of problems and you might be surprised to find an “off the shelf” solution to your process inefficiency.
Tackle one a week and you will be on track to start the year with confidence and a recipe for success.
Are you spending too much time entering receipts and filing them? Try Receipt Bank to snap a photo of your receipts and bills and watch it load itself into your accounting system – and no more need to file the paper. Perhaps you are sick of entering and remembering too many passwords for the multiple applications you use each day? Try LastPass and save yourself time (and frustration) every day.
Creating a culture of continuous improvement has immense benefits. Start now with one change and see where it leads.
5. What to stop doing!
Time is a limited commodity. To do new things and create new habits, you need to find some stop doing activities and bench old habits. To identify some things you can stop doing, consider the following questions:
- Do you say ‘yes’ too often?
- Next time, pause and consider “does it need to be done?”, “can someone else do it”, “if I need to do it, how urgent is it?”.
- Do you do things that others could do?
- Focus on delegation. Leverage the time of others to get tasks progressed and only get involved when they are advanced to a stage where they need your input.
- Stop being a perfectionist.
- Ensure the time spent is commensurate with the value of the task.
- Cease & desist from doing repetitive tasks.
- Take advantage of technology and start automating repetitive processes.
Help is close by. Your accountant should be a sounding board for your ideas or feel free to contact Prosperity Advisers if you want a fresh approach.