EOFYS. I’m not really keen on the term myself, but it seems to be here to stay – End Of Financial Year Sale. The noise of advertising makes us very aware that the sales are happening, but amidst the distraction have you thought about that other EOFYS that all small business owners really need to have – an End Of Financial Year System?
For too many small business owners, the end of the financial year means ‘busy’. Busy means distracted, and distracted means we miss things, mess up tax matters and get our business balance out of whack. The end of the financial year is a time when we really should be looking back, analysing and planning. Instead, too many of us have our heads down and our bums up to the point where we wind up walking into walls.
It felt like progress – but does it measure up?
The end of the financial year is the time to be taking a good look at your progress over the past 12 months. It’s easy to barge through business ‘feeling busy’ and mistaking busy-ness for progress, but progress isn’t just a feeling; it must be measured and compared against targets. Take the time to really be sure. Have you achieved your financial goals and met the targets you’ve set in other areas as well – you know, customer numbers, website visits, that sort of thing? If you haven’t, now’s the time to work out why, instead of just charging into the new financial year simply hoping things will sort themselves out. Hope won’t fuel a business or pay your bills. And be sure to set meaningful budgets for next financial year. Without a clear, accurate budget, your business won’t have any real goals to work towards, and your whole team risks losing its way. So set budgets, and check them, too – not just at the end of the financial year, but at regular intervals so that you can tackle little problems before they become big ones, and also identify business opportunities.
No-one plans to fail.
The end of the financial year is also a great time to revisit your business plan, fine tune it and maybe even give it a proper renovation job if it proves to be outdated or out of touch with your changing business, and the market you’re dealing with. If you are currently staring at your screen and wrestling with pangs of guilt, I’m guessing you don’t have a business plan. Seriously? Well, I’ll spare you for the moment, but you can look forward to a proper old kicking when I publish my upcoming blog about the importance of
It’s this important; a budget looks ahead into the following year, but a business plan looks as much as five years ahead into areas such as your target market, your SWOT plan (Strengths, Weaknesses, Threats and Opportunities) and a lot more. Running a small business without a business plan is like driving with your eyes closed. If you don’t have one in place, feel free to email me at Jason.email@example.com or just give me a call and I’ll be happy to help you with a basic planning template.
No-one ever built a house out of plans.
While you can’t build without plans, you sure can’t build with just plans. Your banking and cashflow are the bricks and mortar you’ll need to build the goals set out in your business plan – so make sure they match up. If you plan to grow, make sure you have both the tools and strategies to do so. You can’t build a business on thin air…even though in my experience big banks expect you to live on it while they muddle around for months through their Draconian approvals processes. So if your cash flow isn’t what it needs to be because it’s taking ages to get paid, consider Debtor Finance. Yes, I’m plugging my own business (‘it’s my blog and I’ll plug if I want to!’) but Debtor Finance has helped many Australian small businesses achieve their goals without delays, and without having to borrow against property. By all means get all the facts (HERE).
Act early and avoid heart a-tax!
If June 30 rolls around and you find yourself thinking about tax for the very first time, you can be excused. Once. After all, once you’ve paid the price, as it were, you really shouldn’t make the same mistake twice. Acting well before the end of the financial year means you can take advantage of every possible opportunity to minimise your tax. Pre-pay some expenses. Defer some income. Talk to your accountant for advice on strategies you may be able to put to work, and to help stay on top of any deadlines you’ll need to meet at tax time, such as Superannuation and PAYG.
In summary - your end of financial year checklist;
- Measure the performance of your business over the past 12 months.
- Put performance goals in place for the new financial year.
- Prepare a budget for the new financial year
- Speak with your accountant or financial advisor and get all the tips you need to help minimise your tax…well before June 30.
- Compose a list of all the key dates you’ll need to meet in order to be tax compliant
- Update your business plan…or for goodness sake write one!
- Speak with CashFlow Advantage about putting a Debtor Finance facility in place.
And there you have it. I guess that the primary point to be made here is that small business owners should never simply let June 30 serve as some sort of alarm that wakes them up and reminds them to start getting their act together – you have to have your act together well before then in readiness! So much of this comes down to having a plan in place, regularly re-visiting that plan, and being sure that you speak with your accountant or planner at least once a quarter…not just at tax time.
Every year far too many Australian small businesses are so busy being busy, that by the time they start paying attention to the end of the financial year…it’s also the end of the line. With just a bit of forethought, EOFY can be a happy milestone instead of stomach ulcer season. Planning beats panic.
Wishing you all the best for your week in business.