Update or create your business plan
A business plan is a key document for running a small business. If you already have one, the major disruptions in the first part of the year could have changed many facets of your business, and these need to be reflected in your business plan. For example, a retail shop that has switched focus to online sales will have new goals and need to adopt different marketing strategies. In addition, things like expenses, stock levels and finance requirements could also have changed during the first half of 2020.
If you don’t have a business plan, the new financial year is a good time to create one. It doesn’t have to be a massive document. For a small business, it could be under 10 pages. To get started, download our free Business Plan Template.
Conduct a SWOT analysis
This is an effective way to update your business strategy in the new financial year. If you aren’t familiar with the term, SWOT stands for strengths, weaknesses, opportunities and threats. Typically, strengths and weaknesses are internal factors and opportunities and threats are external. Strengths are things you do well, assets you hold and intangibles, such as a strong brand or unique intellectual property. Weaknesses are things you don’t do well and other things that can hold you back. For example, a lack of cash flow is a common weakness for small businesses.
Opportunities are factors that can boost your business. This could include introducing new products or services or entering new markets. Threats are the factors that could harm your business results, such as new competitors entering the market or customers changing their buying habits away from what your provide. Check out How to Conduct a SWOT Analysis for details.
Reconnect with your customers in the new financial year
Some businesses have kept a low profile profile during the lockdown. If this applies to you, the new financial year is the perfect time to reconnect. This could be getting active on social media, sending out an email newsletter or making a call to say ‘Hi’. If you’re not in front of customers, they could soon forget you. Let existing and potential customers that you’re open for business. You can share helpful ideas that highlight your expertise or highlight new products and services.
Adopt new technology
The new financial year is the perfect time to introduce technology that saves time and money and reduces staff requirements. Research conducted by Xero found that businesses that boost technology spending the most grow their revenue three times faster than those that spend the least. In addition, 60 per cent of businesses that expand their technology are likelier to be growing businesses. New hardware, software and cloud solutions cover many aspects of business.
For instance, if you’re not using cloud accounting, you can start the year on the right foot by switching over to cloud accounting and the benefits including easy access anywhere from any device, simpler back-ups, and easy and secure sharing. Another option is a CRM (customer relationship management) system to enhance your communication with customers and prospects. With cloud-based solutions, you don’t have to invest in expensive software and install updates regularly. Check out HubSpot’s free CRM as one option to get started.
Review your financial statements to get ready for the new financial year
Going over the previous year’s financial statements will help you understand how you did over the past twelve months and get ready for the new financial year. Although past experience doesn’t always determine future performance – especially when there is an unusual event such as a pandemic – your financial statements can help you set your goals for the coming year. The most important financial statements are the balance sheet, profit and loss statement (also called an income statement), and cash flow statement. The balance sheet gives you a snapshot of your business at a point in time, including assets, liabilities and owner’s equity. The profit and loss statement summarises the income and expenses of a business during a stipulated period. The cash flow statement provides a summary of how cash and cash equivalents are entering or leaving a business. These statements will give you a clear picture of your recent performance and current position, and provide a benchmark to plan improvements.
Access your business finance needs
A lack of cash flow is one of the main causes of business stagnation and failure. This is backed by Moula’s survey of 500 SME owners across Australia. The research revealed that 49 per cent of these businesses would spend more on business purchases if they had additional funds and 47 per cent of SMEs refrain from investing in their business when they lack cash.
Small business loans are one way for businesses to boost their cash flow. Another option is Moula Pay. It’s a smarter way to pay for your business purchases. With Moula Pay, you get up to three months free from interest and repayments, or can take a longer-term repayment plan if needed.