The flurry of activity that is EOFY should have died down by now, making it the ideal time for small-business owners to take a retrospective look at how their business performed over the past 12 months and how they can take their business to the next level in 2016-17. Just as we set resolutions when the clock strikes midnight on 31 December, it’s a good idea to look at our goals for the new financial year to help grow profits and strengthen the business.
Set business targets and stick to them
Targets are an incredibly important and sometimes overlooked aspect of running a small business. It is a great way of getting a reality check on the business, staying focused and taking control of your business’ direction for the year and beyond.
Be strategic in creating your targets. A vague goal like ‘increase my turnover’ will get you nowhere. Set smart, measurable and attainable goals – so you can hold yourself accountable – such as ‘grow my customer base by 20% in the next six months’.
Monitor monthly how you’re tracking against these targets and make the required adjustments to help you meet them – consider engaging your accountant or bookkeeper to do this for an independent view on your progress.
Start preparing for 2017 tax time early
Don’t wait until EOFY comes around before you start scrambling to get your business’s finances in order. If you haven’t already, put processes in place to make sure your books are kept up-to-date and tidy. Moving to the cloud is a great way to keep on top of what can be a complex process.
Ask a trusted adviser – an accountant or bookkeeper – to advise what changes you need to make to help ready your business for the following tax time. Preparation is key.
Engage with your customers
Take the time to talk to your customers and reacquaint yourself with what they like about your business and product, but also what areas they think can be improved on. Arguably, no one knows this better than the regular customers who consistently interact with your product or service.
A simple customer satisfaction survey can provide great insight that will help you improve your business, target new customers and keep existing ones happy and returning. Cloud software can help you track which customer segments are spending most, influencing where your marketing focus should be as you expand in the new financial year.
Cut costs creatively
It sounds simple, but some creative cost cutting is quick and easy way to improve profitability – save the cents and the dollars look after themselves. Look out for rising costs and opportunities to make savings by comparing this year’s expenses with previous years’.
Consider all your operational expenditure – do you still need that company car, or that subscription to a trade rag? Are there cheaper and more efficient alternatives? Chances are the answer is yes. Make sure you are getting a competitive rate from your suppliers by shopping around for at least three quotes and negotiate.
Streamline your processes
Review your processes and how you work. How could you be spending your time more efficiently and productively? Are any administrative tasks preventing you from focusing on more important tasks at hand?
Consider delegating, either some of your work or how you can automate simple data-entry tasks to improve efficiency.
If you’re still keeping your invoices and receipts in a shoebox and doing your accounting tasks by hand, you’re wasting precious time. Accounting software automates and simplifies most tasks from invoicing, payroll, paying bills, and even updates your financial records by linking with data from your bank account.
James Solomons, Head of Accounting, Xero Australia
