In order for a business to achieve its goals over the course of a financial year, it is important that it has a number of resolutions in place. The equipment finance and insurance specialists at Moody Kiddell & Partners have drawn up a list of 8 resolutions no business should do without.
1. Do A Financial Health-Check Of Your Business
Review your financials and key ratios for liquidity, profitability and return on investment. Including:
i. staff productivity / processes
ii. utilisation of business assets
It is important to compare these results to prior years to help identify strengths, areas of potential growth and possible threats to your business.
2. Revisit Your Strategic Plan
Analyse your market and consider future industry developments in your plan. Make sure you have clear business objectives. Address any weaknesses identified in your financial health-check and include a work plan that designates responsibilities and sets due dates for implementation.
3. Draw Up A Budget For The New Financial Year
It is important to align your budget with capital expenditures and finance requirements to achieve your strategic plan. When setting your budget, list all your assumptions for the coming financial year. Then give this budget a stress test: what would happen if there was a 10% reduction in sales or a 20% increase in the cost of fuel?
4. Prepare A Cash Flow Forecast
Forecasting and regularly monitoring your cash flow will allow you to take advantage of opportunities as they arise in your business.
5. Ensure You Have A Finance Option To Compliment Existing Facilities
All businesses need finance to fund ongoing operations and growth. Finance can be provided from debt, equity or be internally generated through a business’s cash flow. It is good business practice to have some surplus finance available to cover business contingencies including taking advantage of new opportunities.
6. Revisit Your Marketing Plan
Focus on sales that have high margins and good counterparties that pay regularly. Measure the success of each promotional activity to gauge its effectiveness.
7. Review Your Risk Management Strategies
Managing risk is important for your business planning. If you locate an area of risk in your business but don’t think you can mitigate it, then make sure you are protected with the right insurance policy.
8. Risk Awareness As Part Of Key Management Strategies
Some ways to manage potential risks to your business:
- Don’t rely too heavily on a small number of major customers. This can be achieved through increasing customer numbers and helping smaller customers grow.
- Don’t rely too heavily on one supplier.
- If you are selling on credit, make sure you do credit checks and limit the amount of credit suitable to each customer. A credit insurance policy can also mitigate the risk of customer non-payment.
To find out how Moody Kiddell can help your business call 1300 000 657 or click here to use our contact form.
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