The start of the New Year brings with it another round of New Year’s Resolutions that, for many, become watered down or broken by the time February arrives.
However, the end of year break can be the best time to make new financial resolutions to ensure the New Year starts on the right note and 2018 is one to remember.
We’ve come up with four simple financial resolutions that all business owners can apply.
1. Prepare a cash flow budget
One of the biggest issues affecting all businesses is a lack of free cash flow. All businesses should have detailed budgets that can be easily updated and compared to actual data in order to identify cost blowouts and income anomalies. Financial modelling and analysis allows your businesses performance to be properly evaluated and helps develop further improvement strategies. Our three-way cash flow model analyses budget versus actual data in an easy to understand format, while also forecasting cash flow difficulties in upcoming periods. This allows management to implement the appropriate strategies to avoid business being stifled. Along with our visual dashboard reporting tool, our financial model can be securely accessed on your laptop, tablet or mobile device.
2. Review your operations
Identifying cost blowouts and low income periods creates opportunities to streamline your business operations and develop strategies to improve profitability. There may be a number of reasons for variances between your actual results and your budget:
o Are costs of sales too high? Why?;
o Are staff reaching efficiency and productivity targets or are we paying too much overtime?; o What costs can we cut back on?;
o Are there opportunities to generate greater revenue?
There may not be a single item that will drastically increase profitability, however the combination of several small improvements could just be the difference needed in your business.
3. Review your investments and insurances
Your financial investments and personal insurances are vital in providing financial security. Taking the time to conduct an investment review will allow you to know exactly how your investments are traveling and where improvements can be made.
An insurance review provides you with certainty that you and your loved ones are covered in case of an unfortunate event. Personal circumstances change regularly and your insurances should reflect this. Some events that should trigger an insurance review include:
o Getting married;
o Having children;
o Buying or selling real estate; o Changes in your income; and o Health issues
Our financial advisory team, led by Toby Winten, can ensure all your investment and insurance needs are adequate, allowing you to enter 2018 with confidence and security.
4. Shop around for a better deal
Changing bank can be a difficult process and it will often take time for your new provider to fully understand your situation and circumstances. However, the upside of change is that it often results in a better outcome. Loyalty is not always rewarded with reduced interest rates or fees, so simply asking the question of your current bank may be all that is needed to unlock substantial savings. Lowering your current interest rate by even 0.05% on a $3 million facility equates to an interest saving of $15,000 each and every year! Do some research and talk to your bank about any current facilities you have and whether you are getting the best deal. Having a third party enquire on your behalf can also strengthen your position when negotiating with banks. Our specialist finance team, Grow Capital Finance, led by former Williams Hall Chadwick manager Geoff Birchnell, can assist with facility reviews, refinancing and new finance applications. Geoff can be contacted on (07) 3212 2650 or firstname.lastname@example.org.
If you would like us to assist with your financial New Year’s Resolutions please contact our office.