We’ve just come through the first quarter of the financial year, and every business owner should be looking at how their business has performed, what has worked and what hasn’t and how they can use that to their advantage as the year rolls on.
When taking stock, there are three key priority areas you should focus on:
1. Going for growth
Are you on track to meet your growth and sales targets? If not, you need to consider what you’re going to change to make up for lost ground.
What stopped you from achieving your targets for the quarter? Is a lack of visibility or awareness amongst your target market having an impact? Do you need to improve your fulfilment or delivery? Are your sales processes, payment terms or payment options letting you down? Whatever it is, make a concerted effort to address it in the coming weeks and remove the roadblocks to your success.
Gather your key team members and openly discuss the issues. It doesn’t have to be a major overhaul. Even small measures to refine, tweak and improve your processes can pay off in the next quarter and beyond.
While you’re at it, review your targets and agree a plan for boosting your sales in the coming months or revise your expectations.
If you plan to make up the ground, pursue sustainable action that can be repeated to build further growth next quarter.
You don’t want to burn your team, supplier capacity or other businesses resources, and then fall back into a worse state down the track, all because you bit off more than you could chew.
Making sure you’re on the same page, engaging your team and working together towards the same outcome is paramount.
The best way to do this is to break it down into specific measureable targets of the sort I referred to in last week’s blog.
2. Get a cashflow reality check
How did your cashflow budget compare with the reality of actual cash movements and the timing of them?
If you put a cashflow budget in place, now is the time to check and update your rolling three-month budget and look for patterns that have emerged, cost differences you didn’t anticipate and any possible shortages you can foresee in the near future.
If you don’t already have one, now is a good time to get started and use the information you have at hand, to plan for the cash requirements of the business.
Start with your current cash balance and expected cash inflows and outflows. Don’t forget to include any known compliance payments you’ll need to make.
The coming months will provide a boom period for some businesses and a quiet time with a drop in revenue for others. How will you make your way through December and January from a cashflow perspective?
Both bust and boom scenarios still require cash, so if you’re not sure you’ll have the cash you need, when you need it, now is the time to devise a plan.
There are numerous options available, as outlined in my piece “How to get cashed up”, but the key is to get in early, because, as you know, it’s harder to make a dollar than spend it.
3. Take a fresh perspective
When you’ve been in business for a little while, you can get stuck doing what’s worked in the past and just delivering as much of that as you can to the customers you already have, and grow organically.
While there’s truth in the saying if it ain’t broke don’t fix it, you owe it to yourself to consider the alternatives or potential to innovate and evaluate if there’s good upside for you in pursuing these options.
Many businesses don’t do this often enough despite a new financial year presenting the perfect opportunity to do so.
But there’s no time like the present, three months in, with the benefit of some existing data to analyse and interpret. Now is the perfect time to put your start-up entrepreneurial hat back on.
Look for new and exciting ways to expand your customer relationships or additional directions your business could take.
Use the information available to you to model what that might look like and speak to your customers, mentors and business advisors to gather their thoughts, feedback and to challenge your thinking or expand upon it.
Marc Peskett is a director of MPR Group a Melbourne-based firm that provides business advisory and finance lending services, as well as tax, outsourced accounting and grants strategies to fast growing small to medium enterprises. You can follow Marc on Twitter @mpeskett