A new financial year often brings renewed hope and opportunities for small business owners. It’s a time to reflect on past performances, recalibrate strategies, and lay down plans that drive your business towards greater success. We’ll explore effective strategies to enhance your business’s financial health and achieve your goals, specifically tailored to small businesses navigating FY24. Discover insights from financial experts, and practical, actionable tips in safeguarding your business in FY24.
Prioritise Profits
Plan Ahead: Strategy Evaluation
One of the foremost priorities in the new fiscal year is to reassess and plan. Reflect on the strategies you’ve employed in recent times and their suitability in the current economic landscape. Are your efforts resulting in the desired financial returns? Are you measuring and managing the right variables?
Andrew Ash, Business Advisory Director at HLB Mann Judd, emphasises the importance of quantifiable metrics, “If you can’t measure it, you can’t manage it. Ensure you’re quantifying what’s significant.” For instance, evaluate whether the prices of your products and services align with rising operational costs. If not, it might be time to review your pricing strategy to maintain profitability.
Practical Steps:
- Review Pricing Strategy: Ensure your product or service prices cover costs and deliver profit, even amidst inflation.
- Expense Analysis: Regularly analyse expenses and cut unnecessary costs.
- Employee Performance Metrics: Track and incentivise employee performance aligned with profitability goals.
Budgeting and Forecasting
The Importance of a Budget
Budgeting can seem daunting, particularly in unstable times, but it’s an essential practice for a well-managed business. Andrew Ash suggests, “Take the time to go through your fixed costs and question them. Ensure you’re getting the best deals available.”
Once your budget is set, it’s crucial for you and your team to take ownership of it. Regular reviews are necessary to adapt to fluctuating costs and revenue changes. Continual budgeting keeps you nimble and ready for adjustments, setting a solid groundwork for financial stability.
Practical Steps:
- Fixed Cost Review: Regularly review fixed costs such as rent, utilities, and salaries for potential savings.
- Vendor Negotiations: Negotiate with suppliers for better rates or bulk purchase discounts.
- Scenario Planning: Draft multiple budgetary scenarios (best, moderate, and worst-case) to prepare for various financial outcomes.
Exploring New Business Opportunities
Setting Ambitious Sales Targets
The beginning of a new financial year is an excellent time to set new sales goals, attract new customers, and strategise to capture more market share. “Business development is all about progress, and the best way to make progress is to consistently take action,” advises Ash.
Define clear business goals, including revenue, customer acquisition targets, and expansion plans. These objectives will act as a roadmap, guiding your actions and maintaining focus throughout the year.
Practical Steps:
- Sales Funnel Optimisation: Improve lead generation and conversion tactics.
- Market Research: Identify gaps in the market and innovate to fill these needs.
- Customer Engagement: Utilise social media and email marketing to engage with existing and potential customers.
Embrace Innovation
Stay ahead of your competitors by adopting new technologies and innovations. Whether it’s automating back-office tasks or utilising AI for customer insights, innovation can propel your business forward.
Practical Steps:
- Automation Tools: Invest in automation software for repetitive tasks (e.g., accounting, customer service).
- Data Analytics: Use data analytics to gain insights into consumer behaviour and tailor your marketing efforts.
- E-commerce Expansion: If applicable, expand your online presence to reach a broader audience.
Identifying and Managing Risks
Risk Management Strategies
Successful businesses understand their trading conditions and monitor key drivers closely. They also prepare for various scenarios and consult with professionals to manage and mitigate risks. “Take the time to consider the risks to your business, acknowledge the reality of your circumstances, and prepare for a number of different outcomes,” says Ash.
One crucial risk management strategy is ensuring your insurance policies provide adequate coverage. Engaging with professional insurance brokers in Toowoomba can help formulate and refine your insurance strategy to cover potential risks efficiently.
Practical Steps:
- Risk Assessment: Regularly conduct risk assessments to identify potential threats.
- Insurance Review: Ensure your insurance policies match your current business needs.
- Consult Professionals: Work with financial and insurance advisors to develop comprehensive risk management strategies.
Business Continuity Planning
Having a business continuity plan ensures that your business can still operate under adverse conditions. It involves creating strategies to recover from disruptive incidents, safeguard critical functions, and maintain operations.
Practical Steps:
- Emergency Response Plan: Develop detailed emergency response plans for different scenarios.
- Employee Training: Train employees on their roles and responsibilities during disruptions.
- Data Backup: Ensure regular backups of critical data and maintain offsite copies.
Implementing Actionable Strategies
Collaboration and Team Involvement
Involve your team in the process of goal setting, budgeting, and risk management. This inclusion not only fosters a sense of ownership but also ensures commitment towards achieving business objectives.
Practical Steps:
- Team Workshops: Conduct workshops to align team strategies with business goals.
- Regular Updates: Maintain open communication and provide regular updates on business performance.
- Employee Feedback: Encourage feedback and incorporate valuable insights from your team.
Leveraging External Resources
External resources can be pivotal in your business’s growth. Utilise government grants, external funding options, or seek advice from mentors and business networks.
Practical Steps:
- Local Business Networks: Join local business groups for networking and support.
- Seek Funding: Apply for relevant grants and funding opportunities that support small businesses.
- Mentorship Programs: Engage with mentors for guidance and advice.
A new financial year is not just a date on the calendar; it’s an opportunity to reorganise, strategise, and stride confidently towards your business goals. By prioritising profits, effectively budgeting, exploring new opportunities, and managing risks well, your small business can thrive in FY24.
Engage with our expert insurance brokers or enquire about our comprehensive business insurance package to ensure your insurance policies safeguard your business comprehensively. With meticulous planning and execution, your small business can navigate the challenges of the new financial year and seize the opportunities it brings.
Important notice
All information in this article is of a general nature only. This information does not take into account your specific objectives, financial situation or needs. It is also not financial advice, nor complete. Information is subject to change.
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