You may have faith in your business and you’re probably doing well but it is still important for you as an SME to plan ahead. We’re well into the new quarter now and if you haven’t already done it, it’s time to put a plan into action for this new financial year.
Why Make a Plan?
There is that age old saying that if you fail to prepare, then prepare to fail. And although a silly saying, there is a business lesson there. It is always best to plan your finances in order to assure cash flow and the success of your business. Knowing your projected expenses and projected income can provide your SME with a number of benefits, including:
• The ability to anticipate problems.
• The trust that you can safely improve and grow your business.
• Financial figures to influence and confidence in decisions.
• Improved clarity and focus. Our Top Tips
If you are an established SME then you have probably written a financial plan before so we won’t go into too much detail. Instead here are a few top tips to help you out:
If your business deals with stock then you will be used to dealing with vendors and suppliers. With the new financial year it is likely that your contracts with these companies are coming to an end, making this the perfect time to review them. Can you get the same service somewhere else for less money?
#Top tip – They’ll be completing their budget and financial planning around this time too and looking to cement business for the coming year. This provides the perfect opportunity to cut a deal which benefits both sides.
Review Equipment and Machinery
Okay, so you are a busy professional, you don’t have time to check if there is a stockpile of printer ink or if the kettle keeps overheating. It may benefit you however to stop and take a look at your machinery, supplies and equipment in an annual equipment check to make sure you have what you need to move forward. If you do find that you need more equipment then find out what kind of finance is available to help you along the way. Be sure totalk to a commercial finance broker to get the best deal though.
#Top tip – Make these checks early on in the year and replace any faulty items. You can then reduce the risk later on and reduce that part of your budget.
The new financial year is the perfect time to review your employee outgoings. Should you give them a pay rise or perhaps you can’t afford them all and sadly have to let someone go? #Top tip – With the end of the financial year and possible bonuses, staff may start to consider their position in the company and what they want out of a career. Be prepared for the possibility that some staff may decide to leave.
Insurance is essential if you wantto protect everything you have worked towards with your business. The new financial year is often a time when new rates are released and by switching you may get a better deal. Go quote shopping in April or ask your commercial finance advisor for advice on the best deals.
#Top tip – Speak to your current insurer and let them know that you are looking for a better deal elsewhere. They may drop their renewal price in order to keep you as a customer.
Plan for Emergencies
It’s easy to think “Oh that will never happen to our business” and it may not, but it is always best to plan for emergencies just in case. Set aside some money for any major unexpected expenses such as an economic downturn or a natural disaster. You never know what will happen.
#Top tip – If possible set aside enough money to cover 6 months’ of expenses.
So will you be taking our top tips on board and planning ahead for this new financial year? If you have any questions about financial planning or budgets for your SME, give us a call.