It’s time for new financial goals as you celebrate the old year and plan the new year.
Congratulations, you’ve survived another financial year and today is the first day of a new one. Is this year going to be different from last year, or will it be the same again… It’s time to review the past and reset your financial goals for the new year.
A new year is a great time for a reset of your business. However, I recommend a reset at least every quarter with a major reset at the beginning of a new year.
For me, it encompasses a few parts. Firstly, it’s time to reflect on what I’ve achieved. I review the last month, quarter, year and usually take a few minutes to go back a few years to consider just how far I’ve come. I take a look at what I’ve achieved, what I haven’t achieved, what I’ve done differently, and what new skills I’ve learned. Then I also take a look at what is still on my...
Do you look at your financial reports with bewilderment, frustrated that you’re not getting information that is useful for you to manage your business?
The answer may just be that your accounting system has been set up to make it easy for your accountant to produce financial statements, not for the easy production of management reports.
Management financial reports are fundamental to success in business.
If financial reports are set up to provide you with the information you want and need to be looking at, they are a fountain of information and insights into what’s happening in your business: the good, the bad and the downright ugly.
Does your profit and loss statement show just a couple of lines for income and then the expenses listed alphabetically from A to Z? If the answer is yes, it’s time to shake up your reporting.
Think about the different income streams you have in your business,...
In the next couple of weeks, let’s make sure you end the financial year strong.
Another financial year is almost over, where did it go? How was the year for you, good, bad or downright ugly? With just two weeks to the end of the year, it may be too late to have a chat with your accountant to do some tax planning unless you already have, but there’s still time to take action on a few things.
First of all, you need to know whether you’ve made a profit for the year or not, and how much that profit is. It’s worth having a good look at each line in the profit and loss, making sure it makes sense, and nothing looks out of place.
One way to do this is to compare this years’ figures against last years and look for the anomalies.
Unfortunately, though, the profit showing in your profit and loss statement may not be the figure that you will pay tax...
What’s your plan to achieve your goals, does it include routines rituals and rewards?
Are you a planner or a go with the flow type of person? There’s no right or wrong here, it’s just a question of what works well for you and whether there’s an in-between where you get the benefit of both styles of living.
I’ve always been a planner but in recent years, I’ve taken on a bit of the go with the flow style. When travelling, I’m the one who plans what we’ll do each day on the trip, and whilst sometimes the plan would change due to weather conditions, we pretty much did exactly what I’d planned.
More recently, I’ve not done the day by day plan but rather got a list of places to go and see and put them in priority order and if we don’t do everything that’s ok, or we might find something more interesting to do instead.
So, it should be no surprise that I also plan my...
In business, we need both capacity and flexibility, but there are times when they just don’t mix.
Strategically in a serviced based business, we want to be highly productive and utilise the capacity we have available in the most efficient way possible to make the most revenue.
Whilst productivity at 75% or 80% sounds like there’s flexibility, the reality is that the other 20% to 25% is spent in admin tasks, internal meetings and a plethora of small tasks. And these aren’t considered specifically client delivery tasks.
Recently, I was asked to do some work which I knew would take me close to a day and a half. The challenge was that I already had work planned for the next day and then two full days of meetings. For me, there was no question about what to do.
The decision was simply to put off the work I’d planned for the next day and prioritise this new work. It needed to be done urgently and I would keep working until it was done, which on that particular...
There’s money to be found in the unnecessary costs of your business.
Checking and reviewing your numbers is key to making decisions, but there are also benefits to looking at the numbers from the viewpoint of seeking out the differences.
Differences can be found in several ways:
What numbers look the same, and what numbers look different? For those that are different, do you know why they’re different? If you can provide an explanation, that’s great, but if not, delve deeper into the numbers to see what caused the difference.
I was talking to the co-owner of several tourist accommodation properties, and she told me the story about when they’d bought a new property and got the first energy bill.
The energy bill was ten times the amount they were paying for another existing larger property they owned. Something was definitely...
Look to the future with planning to ensure you are running your business successfully.
When you think of taking a holiday, you make decisions about where you want to go, what you want to see and what you’ll do during the trip. Even if you decide to go where the whim takes you, you’ll still see the signposts along the road and make decisions about which way you’re going to go.
Business is no different to planning a holiday, you need to have a plan on where you want to go and how you’re going to get there.
Firstly, you need to set financial goals, this may be a revenue target, or a profit target or capping expenses at a particular figure, it’s your choice what is important to you.
Using those goals put them into a budget projection and fill in the rest of the details with the cost of sales, expenses and other payments. You may do this initially using annual figures and then break them down into monthly figures taking into account any seasonal...
Taking the time to reset your business goals throughout the year can provide great value.
The old saying is that time flies when you’re having fun, but I think that needs to be upgraded to time flies when you’re running a business. Weeks fly by, then it’s months, and before you know it, we’re almost at the end of the financial year and halfway through the calendar year. Yikes.
While a new financial year is a great time to set goals and budgets for the next financial year, the key is not to set them and forget them. Goals and budgets need to reviewed and re-assessed throughout the year.
There’s nothing more discouraging than setting a lofty revenue goal at the beginning of the year, falling short of it on a monthly basis for the first few months and then feeling like a failure for the rest of the year.
Don’t Waste Your Money on Tax Planning Opportunities If You Don’t Need To.
The end of the financial year isn’t far away, and whether you’ve made a profit or suffered a loss, it’s time to focus on tax planning. Tax planning is all fine and good, but you have to have the cash flow or funding to reap the benefits of most of the opportunities available.
Hopefully, you’re aware that as a small business, the ATO allows you to claim a full deduction for the cost of equipment, fittings, computers and so on up to a cost of $ 30,000 per item.
Superannuation contribution limits are $ 25,000 for employees of all ages.
If you have a family business where both you and your partner work in the business, you have the opportunity to contribute $ 50,000 which includes superannuation guarantee on your wages.
1. Assuming that both family members take a salary of $ 90,000, that means...
I regularly get asked the question “What do I do with xyz company to make sure I get paid, they owe me $$$, and it’s way overdue?”.
I also have situations where clients don’t pay me on time, and I understand the time and emotional costs in chasing up the payment not to mention the potentially disastrous impact it has on your cash flow and ability to pay the bills. While the Australian Small Business and Family Enterprise Ombudsman has been working hard to get Small Businesses paid faster by large corporations, it’s still up to you when you’re selling to Small Businesses.
These three key areas will make a big difference to your outstanding invoices.
When we apply for credit with our suppliers, the chances are we’ve had to fill in an application form with details of our financial viability, references and possibly provide a directors personal guarantee.
We need to apply this same...