DOUG’S DESK – MVP Small Business Specialist
9 Business Tips to Kick-Start Second Half of the Financial Year 2018
As you return from what was hopefully an enjoyable and restful holiday period, it’s now time to ‘blow off the cobwebs’ and refocus, particularly if you and your team still need to cover ground toward your 2018 business resolutions and goals.
A quick introduction to me, Doug Verley. I’m the Small Business Specialist at MVP Financial, with over 30 years’ experience helping small-to-medium businesses in Perth and across Australia reach their financial, managerial and strategic goals. I do this work because my expertise, passion and purpose in my work-life are to help the small-to-medium business owners overcome the various challenges and obstacles faced in the day-to-day running of a business. In essence, I help business owners get from where they are today, to where they want to in the future.
To kick-off this year I thought I’d share with you the top eight business tips I usually advise clients to undertake as they enter the second half of the financial year 2018.
1. Pause and Take Stock –
Review your financial performance for the first half of 2018. How have you performed against your budget? What’s working, and what’s not working? If you haven’t already, you need to put in place a 12-month Profit and Loss budget for FY18. For those who have one, you should be closely monitoring monthly actuals against budget;
2. Revise and Change –
Revise your budget for the second half of FY18, making any expected or anticipated changes to the figures in each of the last six months of this financial year. Whether it’s an improvement or worsening in the figures, by revising you give yourself clarity on the business’ financial position moving forwards;
3. Review your Business Plan –
Review your ‘Business Plan’ for FY18. In referring back to your ‘Business Plan’, determine if you are on track. Do your plans still apply in your current business environment? Do your plans still apply given any changes, or developments, that have taken place within your business? This is a good time to ‘go dark’, close your office door and think carefully about the next six months, and what needs to be done and achieved;
Note: A Strategic Plan is not a Business Plan, it is a longer-term tool, detailing goals for 3, 5 and 10 years down the line. Your Business Plan is a 12-month planning tool.
4. Review your Action Plan –
The ‘Business Plan’ should manifest itself into an ‘Action Plan’, or a 12-month priority list of things to do in order to deliver on this plan. I like to suggest that you don’t try to ‘boil-the-ocean’ in this exercise, but rather that you come up with a list of 10-20 key actions, assign who is going to be responsible for their delivery, and by what agreed on date;
5. Reconcile your Business and Action Plans back to your Revised Budget –
Make sure that your revised ‘Business Plan’ and ‘Action Plan’ reconcile back to your revised FY18 budget. For example, make sure that all of your planned initiatives and related expenses for the second half of FY18 reflect accurately in your revised FY18 budget, and that you have the timing of the planned initiatives or expenses reflected in the correct month. Knowing and accurately documenting the timing of initiatives and expenses in a small-to-medium business is crucial for cash flow, and survival purposes;
6. Review your Current Business Risks –
Small-to-medium business owners are by nature very positive and optimistic people, however, sometimes this can be to a fault. Regardless of how great business has been, it is vital to review what key risks you are currently facing in your business and construct a ‘Risk Matrix’ capturing your top 10 to 20 risks in order of priority. It is important that you and your team know what may go wrong, and what the resulting implications for the business might be;
7. Cash flow vs Profit
All businesses from time to time experience financial pressures and the longevity of a business is usually down to how well a small-to-medium business owner deals with these difficult times. One important thing I tell all my clients is that Profit is very different to Cash flow. Having access to cash to fund operations is imperative, and if you ever find yourself moving towards a financially difficult time, it is essential to take control of the situation before it spirals. Draft and maintain a rolling 3, 6 and 12-month forward cash flow statement to give you an idea of your expected cash flow position in the short term;
8. Initiate MANCO & WIP Meetings –
To successfully drive the implementation of your ‘Business Strategy’ and ‘Business Plan’, I recommend that you initiate what I refer to as MANCO (Management Committee) group meetings, and one-on-one WIP (Work-in-progress) meetings. This, if done correctly, will ensure regular structured communication, team and individual focus, and delivery against short-term objectives;
9. Communicate Well and Appropriately –
And finally, once you’ve completed the above, then you can get your leadership team together. Your objective will be to give them an update on the business performance today and to set the scene for the next six months. Of course, the performance of the business to date, the circumstances and environment that the business finds itself in, and the immediate outlook for the business will determine the mood and tone of your message. I always advise clients that if the business is in a difficult spot, or is really struggling, be prepared to discuss the ‘brutal realities’ of the business situation with the leadership team. I can assure you that if done correctly, your team will appreciate this approach, and only then will you be able to truly address the challenges the business is facing. Conversely, if the business is doing phenomenally, make sure to share that information and reward, reward, reward for a job well done!
Best of luck, here’s to a killer 2018!
This article was written by Doug Verley, MVP Financial Small Business Specialist
“As always, I urge you to ‘Live with Passion’, hope and plan for the future, but be fully invested and focused in the NOW – That is where all the magic happens.”
– Doug Verley
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I invite you to call me on (08) 9217 2400, or contact me here should you need to chat about your business. We frequently work with clients not only across Western Australia but remotely across Australia and overseas. First time ‘getting-to-know-you’ meetings and communications are at No Cost and 100% Obligation Free.