Time to reflect and reset your business goals
It’s time to be bold, it’s time to be brave and it’s time to be savvy when it comes to your new financial year business goals.
One of the key things you can do to succeed in the new financial year is to be organised from the outset, and make plans on how you want your year to run.
You are in control of your destiny for the next 365 days!
Just take some time to reflect on how your year has gone. Grab a piece of paper and start jotting down the following:
- What’s gone well?
- What’s hasn’t gone well?
- What are you grateful for?
- What have your learnt?
- What fabulous things in your business and your regular life are you going to take into the new financial year?
- What lousy things in your business and your regular life are you going to leave behind
- What are your goals and budgets?
- How are you going to track your goals and budgets monthly?
Set your goals
Goals are very personal and should be SMART!
- Specific, significant, stretching
- Measurable, meaningful, motivational
- Agreed upon, attainable, achievable, acceptable, action-oriented
- Realistic, relevant, reasonable, rewarding, results-oriented
- Time-based, time-bound, timely, tangible, trackable
Some of these goals may involve money, but others may not, and ideally your list will cover goals for both your business and for yourself.
Some examples of the types of things on your list may be:
- I want to turnover $xxxx in my business for the 2017/2018 financial year
- I want a wage of $xxxx from my business in the 2017/2018 financial year
- I want to achieve a business/life balance, and I will take every Wednesday afternoon off to play golf
- I want to work on my business and not in it, and will block the first Friday of every month to review the month’s results and reset my goals for the month
- I want to run a 10km and will register myself for a fun run
That’s your goals covered.
Define your budget
Now what about your budget? And I mean both a business and a personal budget.
Prepare your personal budget first, as this will determine exactly what you need to be taking from your business to meet your personal living expenses.
Quite often business owners don’t know exactly what it costs them to live, so they just take a wage or drawing that they guesstimate is enough to live off.
However, this can lead to them dipping into the business’s cash reserves far too many times. This can cause cashflow problems to the business and may also end up with some pretty nasty tax bills – yuck!
It’s better to determine what you need to live off and this – together with your business’s expenses – can then be factored into your business’s budget.
From there, you’ll be able to determine what your sales need to be to break even (cover your business and personal expenses only), or to make whatever level of profit you so desire!
There is very little use you setting your goals and budgets in June and then not looking at them again until June next year.
You need to look at how things are going at the end of each month.
Up until recently, it was only big businesses that could afford to either have their accountant prepare monthly financial statements or to employ an in-house accountant.
This made it very hard for small to medium sized businesses to really see how they were going until the end of the year when the annual financials and tax return were prepared by their accountant.
Fortunately, these days no matter what size your business is or how old your business is, there is an accounting software solution suitable for your needs.
These solutions are cost effective and will also allow you to be able to prepare basic management reports.
These management reports will help you understand your business’ finances better and will allow you to really focus on your monthly results.
You’ll be able to make more informed financial decisions during the year, and will be able to change your strategy if things aren’t working.
Sure, you may think that you have your finger on the pulse by relying on how much money you have in your bank or by your sales figures, however by focusing on just these two areas, you may be overlooking critical information.
For example, your debtors or creditors may get out of hand, you may fall behind in your ATO obligations, you could incur stock loss, theft by employees or expenses may blow out.
By looking at your monthly profit and loss monthly, you will be alerted so much quicker to matters requiring your attention.