There are just a few weeks left of the year. Many businesses are hard at work, meeting deadlines and preparing for the year-end rush.
However, according to Craig Dangar, principal of Vault Business Advisors, it’s also a good time to do some business planning for the year ahead.
“Look at what has worked and what could be better and then re-focus your business, make changes, and test those changes”, he says.
“Business decisions need lead time, implementation time, and testing time. If you are a business that has a quiet period over Christmas, testing when it is quiet is better than testing when it is busy,” he adds.
Setting and tracking goals
Sarah Eifermann from Helix Planning says that the first step is to have a long-term goal – about five years out.
“I always say – you wouldn’t travel from Sydney to Melbourne via Adelaide unless it was by design, because it’s far out of your way. The same goes for having a business without goals.”
“The five-year goal might be a combination of smaller goals. It’s a roadmap,” she adds.
For example, if your overall goal is to work three days a week whilst earning $150,000 a year as a wage, you can break it down into smaller goals. For example, step 1: Replace yourself on the tools within 12 months. Step 2: Hire two part-timers. Step 3: Step back and work on the business. Step 4: Build the business to a point where you can work three days a week.
Dangar adds that if you’re planning a break over Christmas/New Year, it can give you a crucial fresh perspective on your goals and how to achieve them.
“Remember goals without a plan are simply dreams. Whatever you do, don’t stay stagnant as businesses constantly need to improve,” he says.
Get on top of your tax and cash flow
Eifermann also says that one of the most important things businesses can do this time of year is to get their taxes up-to-date.
“Even though you have until March to do your taxes, I’d recommend getting them done now, because without that information, it’s hard to plan for the year ahead. If you wait until next year, then you’ll be in retroactive management rather than proactive.”
She says it’s a good idea to ask your accountant if they can do tax planning for you, as it will help you understand your turnover, profitability, wages, and how much tax you are likely to pay. Also, it can help you decide when to make tax-deductible purchases for your business, such as equipment or vehicles.
There’s also cash flow planning. Some businesses such as retailers may experience their busiest period over year-end, while others, like services businesses, might experience a slump which it’s important to be prepared for.
“If your business closes down for three weeks, then that’s likely to dent your cash flow. And it doesn’t always happen straight away, but sometimes four-to-six weeks later. You might not feel the pinch until late February. So with a bit of proactive planning, you can put a little money aside now for that tighter period,” Eifermann explains.
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