The siren has sounded on the first quarter of financial year 2011/12 and it’s time to pick up the game leading up to the half time break.
The second quarter brings added distractions and activity in the lead up to Christmas, a period that brings peak sales for some small businesses.
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For others, it signals the start of their quietest period when business winds down or grinds to a halt in December and January.
Wherever your business sits on the scale of sales activity, now is a good time to briefly assess how your year has fared so far and in what manner it will continue.
Here are my top five tips to get you to the half time break:
1. Check the scoreboard
How did the first quarter results compare with your game plan? Did you meet your sales targets, revenue and profit expectations?
If you’ve implemented KPIs and some simple financial reporting for your business, then this will be quick and easy to assess.
If not, don’t worry, even basic accounting packages will be able to provide some useful data to provide an actual picture of your results during this period.
You should also reflect back on the strategies and action plans you formulated to drive the business forward this financial year.
Did you implement what you intended to? How far have you progressed against your plan and what improvements have you brought about so far? What do you need to do to capitalise on that further?
If you aren’t where you expected to be, there’s no time like the present to rectify that. The great news is, you’re only three months into the year and have plenty of time to make up the difference.
2. Perform some “What if” analysis
“What if” analysis involves taking your current activities and varying them to forecast the impact minor adjustments can have.
This allows you to estimate results before taking new initiatives to market or incurring costs for doing so.
Product lines, sales transaction frequency, price changes, customer segments, distribution channels, debtor collection days, and many other variables can be analysed and modified to show the resulting impact on revenue, profit and value built in the business.
Use your first quarter results to model difference scenarios with your accountant and understand the impact to your bottom line.
Use this analysis to decide where to direct your energies over the coming months. Identify some quick wins that can be achieved before Christmas or capitalise on opportunities that this period could provide.
3. Plan your cash requirements now
How did your cash flow budget compare with actual cash movements? Revise your budget and forecasts for the next few months to see you through the December and January period.
Does your business have surplus cash available to meet its own needs? If not, the “What if” analysis will show where the business can find and free up additional cash.
When you’ll get the cash is just as important as knowing where you’ll find it.
Will the business have the cash in hand at the time it’s needed? If there’s a shortfall or a timing issue, you need a plan to address it in advance.