Week two of the new financial year and it is high time that we talked Business Planning.
Following Paul’s Facebook message to clients, we need to stress the importance of proper business planning for the ongoing growth of your business and to ensure that you do not fall into any of the traps that may arise during the business year.
Business planning is done using figures from last financial year to plan for the busy times – ensure that you have enough stock and staff to cover the busy periods, and also to ensure that you have enough cash on hand or liquidity to cover debt during quieter times.
All businesses encounter quieter times during the year and you need to be sure that this does not result in a cash flow crisis.
It is also a great idea to share ideas with staff about growing the business, improving processes and discuss any stock items or services that no longer work for the business.
Firstly, it is a great idea to prepare a cash budget that includes expected revenue and fixed and variable costs for the coming year.
A list of expected costs and earnings will map out times when revenue is coming into the business and when funds are exiting the business.
A basic cash budget example is as follows:
You will see that all expenses are listed. While you cannot budget for the unforeseeable expenses, you can get a basic idea of business outgoings.
Once you have prepared a cash budget, based on figures from the last financial year and expected earnings, you can start to plan for the coming year.
The government website www.bus.gov.au provides a Business Plan Template and Guide that you can use to plan for the 19/20 Financial Year to ensure that your business survives the many ups and downs that will arise over the coming year.
It is immensely important to take the time to plan for your business’ upcoming year and to have contingency planning in place for whatever might occur.
The accountants at Think Accountants know you and your business and are more than happy to help you with planning for a happy and successful financial year ahead.
Call us anytime to book a session to discuss planning for your business so we can give you the much needed support into the new financial year that will see your business continue to grow and flourish.