- 2018 is supposed to be a very promising year for all businesses. But in order for success to come your way, there are a few things you, as a business owner, should consider changing up.
- If you want your business to succeed in the new 2018, you need to re-organise and re-plan a few aspects of your business, such as finances, cashflow management, your staff, working process, etc.
- Here are top 10 pieces of advice you should definitely pay attention to if you want 2018 to be successful for your business.
As we enter a new year, small business owners are likely to be considering a number of resolutions to get their company into tip-top financial shape, so they can start the year off with a bang. Resolutions can get a bad rap (particularly if you’re talking about losing weight, or stopping a bad habit) - but when it comes to business, taking the time to set clear and strategic goals for the new year can only set you up for success.
For a lot of small businesses, approaching the third year can be a real wake up call. According to the Australian Bureau of Statistics, 60 per cent of businesses don’t make it past the first three years.
Whether you’re in your third year or your tenth year, think about what you want to achieve - and if there are signs of trouble or financial stress, take action early.
Here are 10 new year resolutions to set you on track.
1. Get organised
The biggest issue, which largely affects start-ups, is lack of organisation. Use 2018 as a fresh start, think about where you’ve been, what you’ve learnt along the way, and where you want to go.
A large part of being organised is simply planning. Don’t lose sight of the big picture and what you want to achieve in your business. Revisit and update your business plan. Have the objectives changed. Have you set yourself new targets for the year? What are your key priorities?
And remember, you can’t achieve everything (that’s when resolutions fail) so make sure you are realistic.
2. Be budget savvy
Too many small business owners just look at their bank accounts, see they have money in there and assume they’re doing well. But a formal financial model, which outlines the business's expected cashflow, is essential for all SMEs.
Often business owners haven’t taken into consideration their accrued liabilities. Commonly missed are the business's statutory commitments to the ATO as well as the accrued employment costs, such as superannuation and accumulated leave entitlements. However, trade credit providers, cyclical or recurring liabilities such as utilities and insurances as well as unforeseen expenses such as repairs and maintenance should also be considered when building a financial forecast model.
It’s critical to spend the time to understand the financial requirements of the business, translate that into a budget, and stick to it.
3. Plan for growth
Without planning for growth and success, a business can end up running out of money and missing opportunities. It’s important to plan for long-term growth early in your business lifecycle to give yourself the best chance to take advantage of your business success. However, growth should be considered and appropriate to the market conditions. Growing too quickly can be just as dangerous as not growing at all.
Where do you want your business to be long term? And if you get there, how are you going to manage it all? Think about the resources, funds and people you would need if everything goes according to the plan.
4. Put a decision-making process in place
Because SMEs often operate a small team, there may be no formal method of decision-making. This may result in too many decisions being made on the run without referring them back to the original plan to see if they’re consistent with the business's goals and strategy.
Business owners need to make time each week to discuss the issues affecting the business and ensure any decision is shared with the rest of the team and related back to the business plan.
5. Re-think your cashflow strategy
Struggling with a day-to-day cashflow deficit puts a strain on your entire business and limits growth. Since cashflow is the lifeblood of any business, implementing a solid billing and debt collecting system will inject much needed circulation of funds. With ‘credit clients,’ ensure you have well drafted trading terms in place to allow early and effective intervention when those terms are not adhered to.
6. Do less, but do it better
People typically approach their new year resolutions by looking to do more, not less. But the key is to not stretch yourself thin, and focus on the things that are working the hardest for you. Otherwise, the ‘non-important’ items will just be a distraction.
There is a big difference between being productive and being busy. Think about how you can spend the least amount of energy to reap the most rewards.
7. Tighten the purse strings
There’s been plenty of recent research showing that consumers are watching their pennies this year. The annual Christmas Spending Survey revealed that nearly a quarter of respondents want to reduce their debt in 2018. If your goal is to reduce your business debt, then start by checking interest rates and renegotiating the terms on older debt.
8. Recharge the batteries
Burning out isn’t going to do you any favours, nor your employees, who are running on empty. Scheduling a bit of downtime for yourself throughout the year can do wonders. Also encourage your staff to take holidays in the quieter periods. Flexible working is often achievable, thanks to technology - so why not take advantage? Do you need to be at your desk nine to five? Can you head home early to spend time with the family, and log back on early AM? Use this time to clear your head, be creative and/or think strategically.
9. Invest in a good team
You might be the expert, but that doesn’t mean you should be doing every single role within your business. By finding people who can take on some of the load (even the mundane tasks), it can allow you to focus on more important areas - like building relationships with your customers, setting strategy or growing your business – and it will also help improve your productivity, not to mention stop you from burning out.
Also, not everyone is good at everything. And admitting that there are some jobs that aren’t your forte, like accounting or marketing - is often the first step. Think about what your strengths and weaknesses are, and the sort of people you need to help fill those gaps.
10. Be honest with yourself
If you only seek help once the piggy bank has been cracked open and the lounge cushions flipped, you limit the options available to make effective adjustments to preserve the business. If you suspect your business is in financial difficulty, don’t put your head in the sand.
It’s easy for business owners to get bogged down in operations, often missing key warning signs of failing health. Just like you should with personal resolutions, put in place regular ‘health checks’ at three months, six months, 12 months - and if you start going off track, you can seek expert advice before it’s too late, whether from your accountant, business adviser or insolvency/turnaround specialist.