5 July 2023
With the new financial year upon us, now is the perfect time to review your business finances and goals to ensure you are setting your business up for success this financial year and beyond.
A new financial year is a juncture in the life of a business.
Not only is it an administrative punctuation point, it’s also a moment at which business owners and individuals look back at the year just gone and reflect on its triumphant instances and, well, not such triumphant moments.
Rather than just looking back, you can do something far more useful and turn your gaze to the road ahead.
What can you do to ensure that the upcoming financial year’s a real banger? Let’s take a look.
Be trend savvy
Firstly, stay on top of both national and international trends.
For example, while economists have been warning of recession for ages now, consumer spending figures have actually been quite buoyant and have increased by 13.59% since 2020. This has to be encouraging.
Further good tidings can be seen if you look abroad.
The unstoppable rise of India can only be good news for Australian and New Zealand businesses.
A country with nearly 1.5 billion people, rapidly climbing the economic ladder, looking to buy consumer goods from the more developed world spells happy days for Antipodean exports.
Finally, those who bemoan Chinese stagnation can take comfort in the signs that the country is undergoing an economic recovery, so demand for New Zealand and Australia’s exports will grow once again.
By being aware of such developments and trying to identify resultant demands, you can give yourself the best chance of profiting as the financial year goes on.
Wherever that means focusing your company on local growth or investing in an Australian virtual phone number to better reach new international clients.
Back to basics
It’s not hugely exciting, but there are certain aspects of business running that simply won’t go away.
They might not be the most exciting but this is not sufficient grounds for ignoring them, regrettably.
So, you need to look at elements such as taxation.
Changes are ever-present.
OK, those enormous stage 3 income tax cuts are still a year off, but are you sure you’re on top of things right now?
Are you taking advantage of all the breaks that your business is able to? Both big and small?
For instance, did you know the ATO will allow you to claim your lunch as a business expense, providing it takes place on the premises?
But don’t worry if tax is really not your bag. That’s why there are clever accounting tools out there you can use to soothe that headache.
Cashflow is another basic that can be neglected. Focus on improving your money-in speeds. You might consider offering incentives to early invoice settlers, for instance.
Combine this with a more parsimonious money-out policy. Try to use credit facilities where they’re economical.
Also, look at any loans you have outstanding and see if you can get a better deal elsewhere.
Yes, interest rates are high right now but that doesn’t mean there isn’t the odd online bargain out there.
And while rates are so high, try not to take on any more debt.
Re-organise spending plans so you stay as frugal as you can until we’re in slightly more clement times.
Risky business
Part of running a business — heck, part of life — is being willing to take risks.
Your long hard look at your business should include an appraisal of what level of risk you’re willing to entertain in order to pursue profit.
This stance needs to be recalibrated as economic conditions change, so now’s as good a time as any to give it some thought.
And, in all your thinking in this area, never forget to include provision for contingencies.
A rainy day fund is an absolute must if you’re going to be able to weather any unpredictables.
Think about new financial year goals
Now’s a good time to appraise your business goals.
Do they still reflect where you want to be? It’s hugely useful to spend some time considering the direction you want your business to go in.
Too often, goals are automatically inherited and adhered to despite unsuitable conditions coming forth.
The best business owners are unafraid to change tack when necessary.
Yes, it’s often laudable to stick to your guns, but sometimes you need to consider changing up to grenades.
Investment is key
Whatever the nature of your business, it’s likely that your employees and your equipment are crucial. So, you need to take care of them.
Your team needs support with regular training and guidance.
Also, it’s a good idea to think about extra efforts to keep employees happy and fulfilled.
Team days can go a long way to improving staff morale, which will improve customer service, which will in turn give you a better bottom line.
So, think about how you can give employees a better time. It’s for everyone’s good.
Taking care of your employees and equipment goes beyond training and team-building activities.
Having the proper insurance coverage is essential for safeguarding your business and its assets, as well as mitigating potential risks.
Make sure you prioritize having the proper insurance to protect against unforeseen circumstances and maintain the stability of your operations.
Moreover, one of the biggest drains on morale is having to put up with gear that’s not up to the task.
For instance, if you’ve got a busy contact centre that’s still hobbling along with a system made in Alexander Graham Bell’s garage, your staff will be far from happy with it. You should really consider one of the hosted PBX solutions that will change your whole game.
New financial year, new you?
When it comes to the new financial year, there is a bit to think about.
But, while there are certainly many areas to address, be careful not to jettison everything in your zeal to improve.
There may be certain aspects of your business that are well worth retaining, while you cull and replace the outmoded facets.
Sometimes, financial success depends on knowing the difference.
Source: MYOB May 2023
Reproduced with the permission of MYOB. This article by MYOB Team was originally published at https://www.myob.com/au/blog/setting-up-for-success-to-start-the-new-financial-year/
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