New Year business resolutions

With the advent of a new year and decade, now is the time to be planning ahead in your business. Here are our top tips:

• Reflect on the last 12 months

You need to ask yourself these questions:

• What worked well?
• What didn’t work?

Think about any activities that went well – it could be anything from improving efficiently to winning a new customer. You can then build upon these successes over the coming year. After looking at the wins, it’s worth looking at the things that were just OK, as these could be turned into wins in the coming year and there may only be a few adjustments needed to do this.

Although it may be a little disheartening to look at what didn’t work well, you must understand why they didn’t work. This will help you avoid these mistakes in the future.

• Map out your future goals

Make sure your business resolutions are simple and achievable. The trick is to set your targets and put in sensible ways of measuring your progress. This applies to any goal – whether it’s people, product, service, overheads, expansion or profits. 

It is worth remembering the following acronym as a criteria for when you are setting your goals as they will need to be:

SMART - Specific, Measurable, Achievable, Relevant and Timed.

• Produce a business plan and cash flow forecast

Drawing up a business plan doesn’t need to be complicated and doesn’t even have to be lots of facts or figures, it just needs to be clear about what your goals are both short term and looking further ahead.

You may already have produced a business plan, in which case, all you need to do is check that it is still accurate and relevant to your business. You may need to tweak a few things, but you will have a solid starting point, so it shouldn’t take too long. The plan will ensure your business stays on track and will help you and your accountant spot any future tax planning opportunities that in turn could lead to tax savings.

In addition to a business plan, you also need to ensure you have a cash flow forecast. This should be updated every 12 months and must be realistic. This will provide details of actual cash required by your business on a daily, monthly and yearly basis. Managing cashflow is critically important in the running of a successful business. It is worth remembering that many successful, profitable businesses fail due to cash not being available when it is most needed.

• Draft a marketing plan

Alongside your business plan you should look at drafting a marketing plan which will be invaluable in helping you to reach your sales goals. Whether it’s new customers you’re after or cross selling other services/products to existing ones, a marketing plan will focus your mind on ways to reach your customers – such as using social media or getting Google reviews. There will be many marketing professionals you can reach out to who can help you with this if it's not something you've put in place before. 

• Review staffing

It might just be you in the business right now, but this year could be the year that you need to hire someone to help. Remember to think ahead to give yourself plenty of time to find and recruit the right staff member. You will need to evaluate exactly what you want from your new staff member and carefully calculate what you are prepared to pay. This is likely to be a combination of the value of the employee to you and market forces. At the end of the day the salary is an investment in your business and you need to ensure you get a good return.

• Review costs

While it is important to increase profitability by increasing sales and raising your prices, it is also incredibly important not to overlook the opportunity to save money within your business by reviewing your costs. You may want to consider changing to lower-cost suppliers or switching your utilities provider to save money. You could also evaluate if you need to take on extra staff, or whether actually, you could operate more efficiently. You could also look to buy your photocopier or car when the lease expires for example.

Also look at when you are incurring costs because a bit of forward planning could mean great tax efficiencies could be achieved if costs are incurred at a certain time of year.

• Review technology

Are you fully utilising technology to help make your business as efficient and future proof as possible? It might be time to use an online bookkeeping software to manage your business’ finances. This would ensure you have the correct financial data at your fingertips to make important business decisions.

It might be as simple as investing in a couple of tablets so that your salespeople can make professional presentations to clients. The right technology not only helps with the smooth running of your business but can also give you an edge over your rivals.

If you need any help or advice with the financial aspects of running your business, please call into your local TaxAssist office.  

Date published 7 Jan 2020

This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.