Business owner, mentor, accountant and author, Sophie Andrews (CEO of The Accounts Studio) is all about building profits for creative thinkers. So take notes as she shares why – and how – to make new financial year resolutions this July.
There is always talk of New Year’s resolutions come the beginning of January. Some may relate to your personal goals while others are geared more specifically to your business. However, end of financial year resolutions are different altogether. They allow you to focus purely on your organisational goals and how your company will perform over the next twelve months.
Coming up with a financial plan for your business is the best resolution you can make, especially while all the figures are still clear in your head from tax time. Armed with a solid twelve months of financials from the prior year, you can analyse your business performance and determine its financial health.
Now before you go any further, it is important that you have a budget to guide your future movements. Are you planning any big purchases that your current level of cash flow may not cover? If you are, do you have finance options in place? Are you looking to grow a particular area of your business? If you have a budget from last year, how closely did you stick to it? Were there aspects which were unrealistic? Were there any large variations which you did not account for? Use the previous budget (if there was one) as a basis for your next one. Failing that, create one as best as you can based on the facts in front of you.
Cash flow can make or break a business. If it is limited in particular times of the year, then it is important that you familiarise yourself with the leaner months and be prepared for making less cash purchases around that time. Designing a cash flow forecast, along with your budget, is deemed a healthy business practice. First, use your budget and previous cash flow forecast to flesh it out and double check it each month to see how you went. Then, adjust to take into account any unexpected variations.
Ideally you want your business to be profitable. When you look over your cash flow forecast and budget, you can strategise and come up with a plan to increase productivity and ultimately, profit. Are there ways you can lower costs or curb your spending in order for your profits to grow?
Marketing is one element where you can really play around with. Let your imagination run wild and brainstorm some marketing ideas which would be beneficial for your business. Try to have fun with it! Think about what your objectives are? How can your marketing help achieve your goals? Consider online and offline options that will assist your cause.
Running a business is not for the faint of heart. It is stressful and there are a lot of risks involved. Putting all your eggs in one basket may not be the smartest route so consider diversifying to extend your customer reach and increase your product range. And always try to take up clearly aligned opportunities when they present themselves. Limiting your growth by missing out on opportunities because you were not prepared is one of those things that you may regret at year end.
Once you have analysed the last financial year and have your budget, cash flow forecast and marketing plan ready, then you can progress with gusto. Remember, keep your eyes firmly fixed on long-term growth and increased profits and take it step by step.
Here’s to another great year!
Download the ‘Cash Flow’ chapter of Sophie’s book The Creative Collection here.
And, because we’re feeling extra generous, we’ve added a special bundle to our online store. If you’ve been wanting to buy our ebook, or a copy of Baskk, they are now bundled and discounted. Offer valid until July 1st.
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