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Fire up your small business in 2017

It’s holiday time and with a bit of luck you’re taking time out to recharge your batteries, celebrating 2017 and chalking up your usual list of personal New Year’s resolutions. But what about the batteries fuelling your small business?

Even if you’re working ‘in’ the business over the holiday season, it’s worth carving out some time to work ‘on’ your business. So why not make some New Year’s resolutions for your business too?

Take a business snapshot

Before you start setting goals for the year ahead, you need to clear picture of where your business is right now. What have you achieved in the last 12 months? Were there areas of concern? Are there areas of potential to be tapped? To do this, it may be helpful to examine the key elements of your business. This could include such areas as:

  • Staff
  • Financials
  • Clients
  • Premises
  • Innovation
  • Marketing

A critical element is to make sure your cash flow is working well. Small businesses are often at the mercy of larger business who may make them wait up to 90 days for payment. Indeed, most small business failures are the result of cash flow issues.

Statistics released by the Small Business and Family Enterprise Ombudsman’s office reveal that cash flow is responsible for the failure of 90 per cent of Australian small businesses, with the average small business owed $13,200 at any one time. The total owed to small businesses in Australia was estimated to be around $26 millionⁱ.

So you need to make sure all your debtors pay promptly. You might even consider offering incentives for early payment to improve your cash flow. The start of the new calendar year offers a good opportunity to chase up all your outstanding invoices so that when it comes to the end of the financial year you’re not having to write off a host of bad debts.

Set SMART goals

Once you know where you are right now, then you are on the way to working out where you want to be in the next 12 months.

Goals are central to your business success, but the goals need to be SMART. In management circles this stands for Specific, Measurable, Achievable, Relevant and Timely. There’s no point in creating some fanciful goal that your business has no chance of achieving.

This kind of strategy – small steps, rather than grandiose plans – is far more likely to succeed.

Update your business plan

The goals you set should become part of your business plan. Most businesses would have made a business plan at some stage, as it is the cornerstone to getting a bank loan.

But if you don’t have a current business plan then check out the government’s business portal which has a template to help you formulate one.

Get a jump on tax planning

While you’re reviewing your financials, it’s a good idea to go over your accounts to make sure they are all up to date. Then ask us to check them now rather than at the end of the financial year, when everybody else is busy trying to get their books in order.

Doing this will give you an idea of what your tax bill might be for the year and uncover any problems that may arise. As the saying goes, forewarned is forearmed.

Harness technology

Small businesses are often slow to take up technology due to the time pressures of running a business. The irony is that technology has the potential to save time and reduce stressⁱⁱ.

New technology can be particularly helpful in setting and tracking your goals, monitoring your cash flow and even motivating your staffⁱⁱⁱ.

Running your own business can be hectic, with little time to step back and do some forward planning. So why not come and chat with us to check that you are on track to a successful future.

 

i ‘Aus gov gets serious about late payments’, IT Brief, 21 November 2016

ii ‘These shocking statistics on cash flow show how incredibly stressful life can be for Australian small business’, Guy McKenna, Business Insider, 19 September 2016.

iii http://appadvice.com/appguides/show/habit-building-apps

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Megan Moran

About the author

Senior Accountant, Megan Moran joined BMO in July 2016, attracted to they holistic way BMO’s offers of a full range of financial and business services to clients (not just taxation).  Megan’s 17 years tax experience is backed up with a Bachelor of Business (Accounting) and CPA status. Having worked locally as a Client Manager and Senior Accountant, Megan’s focus has always been on READ MORE


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