It seems like Q4 flew by! Isn’t it like that every year, though? Now the glitter on the floor from New Year’s has been cleaned up, and the fancy champagne glasses are away. Those items you swore you’d get to before the year was out are still left unchecked on your to-do list, and your business budget is no exception.
You thought you had plenty of time to build, examine, and implement a solid plan of business resolutions to kick-off the new year, but the celebrations came and went, and the work didn’t get done.
You now have two choices. Say “oh well” and hope Q4 this year is more efficient. Or, kick it into high gear, inspire your team, focus them, and roll up your sleeves to get to work. (If you’re wondering, we are urging scenario two in this case.)
Creating a plan to organize your business objectives is essential to the growth of your company. While it may take a few days or even weeks to tackle, you shouldn’t wait to put those goals into action.
Below are seven goals to get you started just in time for February:
1. First Set Your Budget, Then Lower It
Take a look at the budget you created in the last year with your team. Now is the time to review it and see if the budget in place was realistic and in align with your business objectives. Building and setting a budget requires determining revenue earned from all streams, fixed costs, variable costs, and any one-time payments that may be coming up.
Once a budget is set, look for ways to cut costs or expenses. This process can include paying invoices early (many vendors will offer discounts to reliable clients/customers) or negotiating lower prices with vendors. Lowering payroll will also cut expenses. Try hiring interns or outsourcing in areas where you may not currently need seasoned or full-time professionals. Find a budgeting technique that best fits your business.
2. Better Manage Your Cash Flow And Financial Records
“Making more money will not solve your problems if cash flow management is your problem.” -Robert Kiyosaki
The last thought that should ever cross your mind is: “what happened to my money?” Does your business have a cash flow forecast created? Are you tracking your performance against the forecast?
Since cash flow is the lifeblood of the company, monitoring it is critical. Whether for future endeavors and purchases or if you know you will need to start looking for financing options soon, you want to be able to see what cash available. If you aren’t considering different scenarios for the forecast, it’s time to start before it’s too late.
3. Plan And Prepare For The Future
Can you predict the future? Unless you have psychic powers, you will likely need to rely on other means to understand how to plan for the future. While predictive analytics can be a relatively inaccurate source of information, financial metrics tracking past performance (and are relative to your business) can be used to prepare for future expenses. Past expenses can also be used to create a forecast/budget. A budget could also include any new costs the business is expecting to take on or account for increases at any expense.
Read more: Planning For What If’s
4. Make A Plan To Reduce Debt
While some debt is suitable for a business, more often than not, it can cripple, and even bankrupt, a company. Businesses accrue debt in countless ways. It could be due to expanding too quickly, financing new projects too early, or even something as simple as being unaware of company spending habits.
Creating a plan is an excellent way to reduce, and ultimately, eliminate debt. A debt-reduction plan could include actions such as cutting expenses, speeding up collections, or contacting creditors to consolidate or renegotiate the debt. A business should also pay off high-interest debt first.
No matter what’s on the plan, the end goal is universal- creating strategies that can be implemented long term and eradicate bad debt.
5. Do Your Taxes Throughout The Year
Making quarterly tax payments isn’t for every business, but could be beneficial, especially if you’re focused on your statement of cash flows. Making quarterly tax payments spreads out cash payments instead of taking what feels like a big hit all at once. Contact your tax CPA to find out whether paying quarterly fees will be beneficial to your business. Don’t have a good CPA, contact us for a referral.
6. Save For A Rainy Day
“All days are not the same. Save for a rainy day. When you don’t work, savings will work for you.” -M.K. Soni
The American market has historically turned volatile on a dime, every company, regardless of size or revenue, should have access to a cash supply in the event of an emergency. Cash flow forecasting and management can also help prepare your business for a rainy day. Planning and monitoring cash inflow and outflow will help you see your expenses and what you can cut, yet still operate, while slowing down cash burn.
Read more: Importance Of Cash Flow Management
7. Stick To The Plan
With a defined roadmap in place, the final step is consistency. Without consistency, there is more room for ambiguity, which can create a chain reaction of inefficiencies throughout the business. These inefficiencies may affect operations and employees or spread to clients and customers.
Establishing and maintaining consistent policies can improve organization with the company, employee turnover, and customer retention. Strategies like this can also help to reduce churn and aid in the growth and expansion of your business.
It is easy to go down a rabbit hole, and before you know it, the end of the year is here, and the work we wanted to get done got put on the backburner. We encourage you to take control of your finances as quickly as you can so you can be more organized and effective in the new year.
Signature Analytics can work with your team to create a budget for your business and monitor that budget throughout the year. If you need assistance building or improving, a plan to organize your finances and grow your business, contact us today for a free consultation.