Small businesses have been urged to review their strategies for the new financial year, with new research suggesting that many firms are concerned about succession planning.
Matthew Schlyder, managing partner of business accountancy firm Elliotts, says now is the time for businesses to revise their financial strategies in preparation for the year ahead.
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“Businesses should first decide what their targets are in three main areas – financially, culturally and operationally… They can then work on their action plans to reach those goals,” he says.
According to Schlyder, a revenue strategy can make or break a small business. Another key factor is cashflow, and the availability or lack thereof.
“I would advise businesses to focus on strategies that drive down the time between when they buy stock or complete a service, and when they receive their cash,” he says.
Another challenge for business owners is striking a balance between running their business, and tracking the business’ financial position and reviewing the business plan.
“My advice would be to block out at least a half to one day per month to review the position and performance of the business, the effectiveness of action plans, and to develop new actions for the following months,” Schlyder says.
Finally, Schlyder says business owners need to engage with their team, including communicating the goals of the business. He says employers should not underestimate the ability of their staff to help the business achieve its goals.
“Your team have great insights into what you need to do in your business to improve and grow. They are the ones on the frontline after all,” he says.
“Involve them in your business planning and this, in turn, will give them accountability toward the overall success of the business.”
Engaging staff is particularly important among family businesses, with a new report revealing more than 60% of family business owners are concerned about the ability of their successor.
The report, compiled by KMPG and Family Business Australia, is based on a survey of almost 700 family businesses.
The survey reveals 57% of respondents are concerned about the motives of their potential successor, while 63% are concerned about the ability of their successor.
Meanwhile, 60% of respondents believe maintaining control of the family business is a key priority.
According to Philippa Taylor, chief executive of Family Business Australia, control in a family business is often aligned with a sustained competitive advantage.
“The typical family business is more likely to accept a prolonged period of low or negative returns in order to execute their strategies,” she says.
“This survey provides a bigger picture on the challenges facing a family business and how we can better help them to professionalise.”