As the new year begins, you may have enjoyed good rest over the festive period. And just as it’s important to start fresh personally, it’s also important to refresh your business. This could give your business the best possible start for the new year, and help you better manage everything from cash flow to debt obligations.
Get to know some of the strategies – both minor and major – you can put in action today to start the new year with a clean financial slate for your business.
Why start the new year with a clean slate?
With the holiday celebrations and the parties often thrown at the end of the year, it’s all too easy for businesses – like individuals – to fall short or fall behind on invoices, bills, and debt obligations, not to mention other processes like operations and customer service.
Research suggests the December holiday period is one of the busiest times for around half of Australian SMEs, and come January, some of us might still feel like we’re in holiday mode although it’s a vital time to get on track quickly and start off the new year right.
So the start of the year could be a great time to declutter, reset your strategy, and create a clean slate before commencing with this year’s strategies. By taking advantage of this time, you could get ahead of competitors and ensure your business doesn’t fall behind on things like debt obligations and cash flow.
What you need to do to start with a clean slate
From planning and budgeting to cash flow and major steps like insolvency processes, you can set the right foundation for a more successful year for your business.
1. Get started early
While many businesses are on holiday during the December/January period, you can take the opportunity to get a headstart on competitors. Before your clients and customers begin catching up with you in February, use January as the time to get rid of your 2017 backlog, set new goals, and work out specific action steps such as monthly actions to get your business on track. This could include updating operations processes and other processes in your business.
2. Refresh your budget
Take the opportunity to refresh your budget for the coming year once you’ve balanced your books and ensure your records are up to date. Also take this quiet time as an opportunity to explore technology tools like apps and software that could help streamline budgeting and record keeping in your business.
3. Address cash flow and chase up debt
Research suggests businesses are owed more than $13,000 at any one time, and this is a lot of cash to be short on. Cash flow is the lifeblood of your business, so this is an opportunity to chase up unpaid debts and get your cash flow strategy in order. Address these unpaid debts by reminding customers to pay and escalating debt collection if necessary.
You could also consider arranging working capital if it could help your business start off the new year on a solid foundation. Take time to review how your financial outcomes were last year and identify any courses of action you could pursue to boost cash flow in the coming year. These action steps could include anything from upgrading invoicing processes to obtaining debtor financing.
4. Sort out taxes
January means you’re halfway through the financial year, and this milestone is an excellent point to check you’re organised as far as your taxes go and keeping up to date with reporting and any relevant payments to the ATO.
Decluttering can be a powerful way to prepare for the new year by clearing away old processes, paperwork, and other clutter no longer serving your business’s needs. By clearing away the old, you’ll make way for the new – which could be a profitable, busy new year.
Declutter your workplace, goals, emails, work habits, and work rituals. Declutter and refresh your business website. Decluttering might even involve reviewing your obligations in the past year and considering whether you should be saying no more often in the coming year. Take advantage of every opportunity to clear away the old and refresh your business.
6. Voluntary administration
If your business is experiencing serious insolvency, cash flow, or debt issues, voluntary administration could be a course of action to help you reset for the new year. This involves bringing in an independent administrator to review your business and recommend the best financial resolution for your company. Whether the outcome is liquidation, a deed of company arrangement, or return to trading, the time-out can give your troubled business much needed breathing space from most creditors and help you create a clean slate.
7. Business restructuring/turnaround
Alternatively, you could consider business restructuring or turnaround services if you’re experiencing significant challenges in your business. Revenue drops, low competitiveness, stagnating growth, and cash-flow problems are some of the indicators restructuring or turnaround could help. With this type of expert advice, you could start the new year with a clean slate.
Don’t let another year pass before taking action
Get started on giving your business a clean slate for the new year by reviewing your goals, defining action steps, and getting everything from budgets to cash flow in order. Make sure you sort out your taxes and take measures to declutter everything. If you have more serious issues, it could be a good idea to look into voluntary administration or restructuring/turnaround advice for your business.
Sometimes a fresh financial start requires more extreme action than simply changing up a daily habit – such as entering into voluntary administration, or restructuring your organisation. That’s where Mackay Goodwin can help. We’re the experts, so contact us on 1300 750 599 to discuss your business circumstances.