Now is the time to do a financial health check of your business. Here is a guide to help you plan ahead:
- Review your financials and profitability and return on investment. Compare with previous year’s figures and those of your competitors. This will help you to identify your strengths and weaknesses.
- Review your future plans and take into consideration the market-place and any future developments, including your personal plans.
- Prepare a budget so you can allocate resources to achieve your plan’s objectives and borrow funds if required. The budget needs to be monitored on an ongoing basis.
- Produce a cash flow forecast. It is fundamental to understand what your cash flow is, how to calculate it and how to use the forecast to keep on top of it. This must be monitored very regularly.
- Produce a marketing plan which focuses on how you are gong to achieve your key objectives. This might include staff incentives or focusing on the product/service which brings in cash quickly and has a high margin. It should also include a digital and social media strategy.
- Analyse risk. Are you relying too much on one supplier or group of clients? How secure is your IT support provider? It is important to have appropriate risk management strategies in place.
To succeed in business it is imperative to plan and monitor continually. Businesses that are on top of their financial performance will adhere to the points above to maximise return and minimise risk.
Call in at your local TaxAssist Accountants office for help and guidance for your business.
By Terry Murphy CPA
Last updated July 2019