Planning for the New Financial Year

23 June 2021

The new financial year brings a fresh opportunity to look at your business. What profits do you want to achieve this year? Are you building up your business for sale? Do you want to cut back your working hours? There are many reasons why planning for the new year is beneficial.

Planning for the new financial year - M Group

Firstly, it is important that you take some time to think about what your business will look like in 12 months’ time. Imagine that you are reporting to your shareholders one year from now. What will you tell them? Some things you may report are:

  • What goals did you set?
  • What profit/turnover/KPI’s did you make?
  • What staffing decisions did you make?
  • What strategies did you implement and what was the result?

Once you know what you want your business to look like, the next step is to put this into a plan and document it. The aim of this is that your business objectives will be clear, and you will be able to keep your team on track. Once you know what your goals are:

  • Create strategies to achieve your goals
  • Identify what you need to achieve goals – marketing, training, performance management, cost cutting etc
  • Set timeframes for achieving goals
  • Divide your goals into short-term and long-term – quick wins vs key projects

Budget

Once you know what you are aiming for and your strategies for achieving this, it is beneficial to create a budget to see what the outcome will be. 

Effective budgeting identifies current available capital, anticipates incoming revenue, and provides a forecast of upcoming expenditure. By having a formulated budget and referring to it, businesses can measure their performance against expenditure and make sure that resources are available towards business growth and development.

M Group Financial Services - Planning for a new financial year

Just remember no budget will ever be 100% accurate (it is always a work in progress) however it is an essential tool for keeping track of sales and costs and knowing what the business needs to focus on (e.g., whether to trim costs that are too high, whether an increase in marketing is needing to boost sales etc). A well thought out budget works as a framework for any business where it acts as a control mechanism for the finances and cash flows of the operation. 

Now that you have your plan and budget, we recommend that you communicate this with your team, so everyone is clear on what the goal is.  Regular check ins to keep this a focus is also important.

  • Develop a template to review actual performance against targets
  • Provide a platform to develop financial forecasts
  • Use your plan as a basis for you to set team members’ individual goals/targets
  • Eliminate procrastination and inaction 



At Mulcahy & Co Sunshine Coast, we can assist you with your business planning and budgeting as well as provide a regular accountability session to ensure you achieve your goals this coming financial year. Please contact us to discuss how we can be of assistance to you.

 

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