Given the craziness of the past couple of years, you probably haven’t had a proper chance to take stock of how your business is going.
With so much change, it’s crucial you do so. There’s no better time (for most businesses at least) than the quiet time that comes after the Christmas rush.
Review costs
With soaring inflation, tracking expenses is likely more difficult this year. Investigate where the increases have hit hardest and what can be done to limit their impacts, including:
- Interest rates – If you haven’t already, review your loans to see if refinancing and/or switching lenders could drive down ballooning repayments.
- Labour – explore ways of attracting/retaining skilled workers without blowing out your wages bill e.g. staff discounts, additional leave, training, or informational resources.
- Business premises – right-size your premises to the company’s current needs. If most staff are still working remotely since COVID, consider downsizing and pocket the savings. Alternatively, sub-let unused office/warehouse/parking spaces to offset costs.
- Marketing – social media, advertising etc. are money pits if their costs and returns aren’t properly tracked. Review these objectively to see if you’re actually reaching your intended audience and generating cut-through.
Get forecasting
Armed with your numbers from 2022, you can have a good go at forecasting for the year ahead. Pay particular attention to:
- Taxes and government benefits – the new federal government’s first Budget was delivered on 25 October, so things may have changed or soon change for your business.
- Pricing – charge what you’re worth, reflecting both the value you deliver and your actual cost base.
- Exchange rates – avoid wild FX fluctuations by implementing stop loss orders and other control mechanisms in advance.
Revisit contingency plans
Renewed east coast flooding, the Ukraine war, and COVID are examples of why contingency plans are needed. Be sure to revisit:
- Insurances – if you’ve had to claim for fire or flood damage in recent years, your premiums may now be higher and/or your coverage restricted. Determine whether you’re paying more but getting less, and what alternatives are available. Also, if your business has grown and/or acquired new stock, update your coverage or risk being underinsured.
- Cashflow safeguards – planning in advance for lulls in cashflow will enable you to act faster and in a less knee-jerk way.
- Emergency fund – have an emergency cash stash set aside. If you’ve had to dip into it, plot out how to replenish the money.
- Crisis procedures – plan for natural disasters, power failures, cyber-attacks, unexpected staff absences (including your own) etc.
Streamline expenses
A major cashflow drain comes year’s end is employee expenses. Reduce this burden by streamlining the process and encouraging staff to lodge claims more regularly:
- Digitise systems – expenses apps make it as easy as photographing a receipt at the point of purchase and submitting the claim instantly.
- Weekly reminders – a simple prompt can nudge people into action.
- Company credit cards for key staff – (provided you can repay them on time.) Track spending in real time and earn rewards points for offsetting travel/other expenses.
Embrace the spirit of the season
Christmas is a time of thanksgiving. Consider how you plan to acknowledge those who have helped your business survive (and hopefully thrive) over the past year.
- Customers/clients – They are the reason you have a business, so a simple thank you goes a long way. It could be a freebie gift or a substantial discount voucher encouraging them to shop with you again.
- Employees – Christmas parties double as team bonding events. Discounted gifts could be sourced in bulk from a supplier/partner. Alternatively, consider a charitable donation in their name – you’ll even enjoy a tax deduction on donations $2-plus.
- Yourself – Don’t forget to reward your own hard work! At bare minimum, catch up on paying yourself wages and super – you could even be eligible for a gift from the government in the form of a co-contribution on additional payments you make!
