It’s the start of a new year, and with it the usual onslaught of New Year’s Resolutions; lose weight, save money, improve this-and-that, etc.
For small business owners, the start of a new year can be the perfect time to assess and plan for the year ahead. Here are some ideas to kick start a New Year’s *revolution* for your business!
Yes, we’re starting with the “F” word. Cash flow is a non-negotiable consideration for business sustainability, and January is the perfect time to craft a plan for success! For most people finance is completely overwhelming, so here are a few easy tasks to get the ball rolling.
The word “budget” is tough for most business owners. My challenge to you is to simply take a one-page year calendar, and plot out major revenues and expenses. Things like:
- Tax Payments
- Staff Hires/Training for Busy Season
- Seasonal spikes in revenue (summer? Christmas?)
- Equipment maintenance & replacement
Here’s a sample blank calendar that I use in my own business. This type of long-range planning can be an asset when you’re making the day-to-day financial decisions.
January is the perfect time to build habits that will carry you through the year!
√ Start a filing system. Even if it’s only a box or a dedicated desk drawer, having a single drop spot for all financial paperwork makes bill paying and tax time easier.
√ Find a bookkeeper/accountant. April sneaks up on us business owners and before we know it tax season is upon us! Start asking colleagues and friends for recommendations on working with a finance pro to make tax-time easier. Resources like IPBC (Institute of Professional Bookkeepers of Canada) can be a good starting point if you’re new to your business.
√ Get caught up on your overdue taxes! This is the #1 thing people whipser to me when they hear I work in taxation. 🙂 It’s important to stay current so A- you keep a good relationship with the government, B- you avoid ongoing penalties and fees, and C- you have a CLEAR financial picture so you can make the BEST decisions for your biz. I recommend TurboTax for small businesses owners; it’s easy to use, has the EXACT forms you need as an entrepreneur, and has good guidance & advice on how to optimize your tax situation. Check it out HERE.
√ Open a savings account; many banks will offer this for free if you already have a business chequing. Get into the habit of using it for money that doesn’t belong directly to your business, i.e. HST/GST collected on sales, commissions owed to staff, etc. This helps prevent the “see it, spend it” syndrome.
Make More Money
Who doesn’t want their business to be profitable, and then some?! When it comes to making money, there are two key foundations:
- Increase revenue
- Reduce expenses
Honestly, it’s that simple! Now, how do you tackle one (or both) of these? Time to start brainstorming. Pick one of the categories from above and just start writing; set a timer and see how many options you can come up with in 3 minutes!
Then, pick one thing from each category that you will commit to for this year and take ACTION on now. Some ideas:
- Revenue- are you able to offer additional products/services? Value add-ons? Reach a new target market of customers? Would your customers tolerate moderate price increases? Are you holding old inventory that can be sold at discount/wholesale?
- Expenses- Take a look at where you spent dollars this past year; are there areas you can trim? Sign up for a merchant account to get your office supplies at a discount? Negotiate lower interest rates for a set period on existing debts like credit cards or line of credit? Get a better insurance package?
As the year progresses, make sure to check in on the commitments you’ve made to your business. Give yourself 2 minutes every day to remind yourself of why the changes you’re implementing are important, and remember that even the smallest tasks can bring you closer to being a profitable and sustainable business!