Start 2014 on the right path

Business owners need to have strategies in place to end this year and start the new one in the best shape possible, says Andrew Graham, national head of business solutions at accounting firm RSM Bird Cameron.

Bird Cameron offers 14 suggestions for business owners to think about before 2014 starts to improve profits, cash flow and reduce stress levels.

1. Review the products and services you sell. Tailor the mix to appeal to changing customer needs for the holiday and New Year season. Also, start considering and planning for other times in the year when customers’ needs change – for example, Easter.

2. Review pricing structures to ensure competitiveness and profitability. Put formal procedures in place to monitor and proactively respond to competitor pricing changes.

3. Review stock levels. Ensure you can satisfy customer demand for profitable product and service lines. Identify slow moving stock that can be liquidated as “bargain buys” or bundled with other products as a value-add.

4. Review sales, marketing and promotion plans. Make sure plans are optimised to help achieve the best results not only during the holiday season but well into the new year. Ensure staff are aware of the targets for each week and be proactive in monitoring and addressing shortfalls.

5. Review staffing plans and confirm acceptance of the rosters by all staff. For non-retail businesses, annual leave plans need to be balanced and finalised as early as possible to ensure the business continues to operate effectively. Consider a shutdown period if the Christmas and New Year period is traditionally not busy to use up staff annual leave balances.

6. Review fraud and theft protection systems. Ensure all staff are reminded of their responsibility to be vigilant as customer traffic increases and that the pressures of Christmas expectations can motivate increased customer and staff theft.

7. Review debtor lists and actively chase all overdue accounts. Any amount not collected by December 23 is unlikely to be collected until February or later. Collecting money owed to you is particularly critical over this period, when the cash cycle tends to tighten.

8. Review the use of finance products for effectiveness. Overdrafts, premium funding, lease facilities and cash flow funding products can all be excellent tools to help match a business’ cash supply with planned outlays, and may be especially useful in managing cash flow throughout the holiday season.

9. Complete a GST health check. Small businesses are in danger of losing time and money because of unreliable or outdated business systems causing them to incorrectly report GST.

10. Set effective goals. The beginning of the new year is an ideal time to review goals set at the beginning of the financial year. Ensure you are on track to achieve them and take action if you can see areas that are not working. Important things to consider include retirement planning, present and future investments, maximising your superannuation scheme and reviewing assets.

11. Update your business plan. Ensure your business plan is updated regularly to reflect changing market and economic conditions. Remember that a solid business plan is critical in meeting financing requirements, as many industries face increased scrutiny from government and financial institutions requiring a much higher quality of management reporting and strategic planning to support funding applications and reviews.

12. Strategically plan end of year gifts and entertainment to key customers, prospects, suppliers and business partners. This will strengthen relationships into the new year rather than simply being a cost of doing business.

13. Carefully plan end of year staff parties to reward and recognise efforts for the year. Remember your workplace obligations to provide a safe environment for the event in relation to alcohol and discrimination.

14. Remember that you deserve a break as well. Plan to take advantage of any public holidays or other time off to protect your own health and wellbeing and reduce the chance of illness disrupting your business activities.