Only one week to the new financial year, and despite the past few years of difficulties, businesses still face challenges, including high interest rates, soaring energy costs, increasing operating costs, supply difficulties, and a government that does not seem to be at all concerned about such difficulties, even about causing a recession.

In this uncertain landscape, businesses need to evaluate their past performance, plan ahead, and take proactive measures to drive growth.

More Than A Twelve Month Plan

Many plans focus on the next 12 months, which breaks down into the tactics for each quarter to achieve the whole year goals. Combine this though with your personal goals, which can be ambitious, large scale aspirations that hopefully spark inspiration. Consider goals like selling the business at a premium price, expand into new markets or products, even a fundamental change in the way the business operates.

These insights into your personal long-term vision are above ordinary operating strategies, and require the investigation of possibilities, putting the infrastructure in place, and fully assessing the feasibility of the plan.

Learn From The Past

Planning and improving financial practices requires an understanding of past mistakes, the things that didn’t work for you. Analyse past financial data, decide what you need to know (like KPI’s or Benchmarks) to achieve your next year goals. Knowing what went wrong gives us valuable information that drives a better outcome in the future. Realise though that the new system may need to be tested and adapted before it works for you.

Effective Record Keeping

The least popular task for most people! Don’t keep records just to do paperwork for the tax office. Set up your records so that you have the information you need to know every day, (perhaps daily sales, average sale per customer, cash at bank, accounts receivable and due to be paid to you, sales per staff member or per sq. metre, number of new customer enquiries, etc.)

By diligently maintaining records you can ensure greater clarity and efficiency, and will make informed decisions much easier.

Forecasting

It’s difficult to forecast, ‘especially when it’s about the future’ (Yogi Berra). Costs are easy enough (rent, wages, marketing, vehicles, overheads). If we want to make more profit, we have to sell more than last year and at a better margin too. So, we can increase prices, sell more product/services to existing customers, find new customers, convert more prospects into customers, etc. (Each tactic requires its own strategy).

The first forecast is for profits, we also need one for cash flow; when will customers pay, allow for loan repayments and various tax liabilities. This forecast tells us about possible cash crises, which can then be managed because of the advanced knowledge.

Stay Informed

It is necessary to be well informed about economic trends, government policy, and trading conditions. This allows for better informed decisions and whether strategies need to be adapted to effectively deal with challenges.

Finally …

There are both challenges and opportunities in planning. It is about seeking to thrive in the face of uncertainty, by strengthening client relationships, diversifying revenue streams, seeking useful advice, and being informed about economic trends and conditions.

It is not just reacting to events or immediate financial needs but the proactive shaping of the future of your business. Allow time to plan and develop strategies, and prepare a strong foundation for the next year.