While the end of the financial year can sometimes be a rushed haze of numbers, money, stock and papers, I think it’s important to take some time to reflect on the year that has just passed.
I know, you might be thinking—argh, more work! But it doesn’t have to be a mammoth task. And a review of the year is important to help set your business up for success in the coming year. It also gives you an opportunity to recognise and celebrate achievements.
We always hear that hindsight is a wonderful thing, and the end of the financial year presents the perfect opportunity for some reflection. It’s not about dwelling on what you didn’t get right, it’s about acknowledging what worked and what didn’t, what you’ve learned from that and how it will change things and help you plan ahead for the next financial year.
You might even find it useful to go through this process with your accountant, who can share some insights that you might not have thought of.
If you set business goals for the past year, how did you go? Did you achieve what you were aiming to? Maybe you ended up heading in a different direction along the way—establish where and why this might have happened and how you can stay on track next year—or did the goals need to be a little more realistic?
Did you meet your targets? Have financial issues surfaced that you need to address? Did your marketing activities work? Is there anything that needs to change? Is there anything that needs improving? Were you staffed correctly for the workload you had? Is your business financially on track leading into the next financial year?
Even if you’ve had a fantastic year, I encourage you to still have a look at why you achieved the results you did, instead of just accepting how the year went and not giving it another thought.
And if the past year hasn’t gone according to plan—that’s okay. However it’s even more important to review what didn’t work and establish what needs improving for the year ahead. Self-evaluation is an eye opener. Knowledge is power!
I’ve said it a few times and it’s because I think it’s so important—cash flow is king, it’s your business’ fuel gauge. The April 2011 MYOB Business Monitor indicates that cash flow will put pressure on 69% of Aussie SMEs over the next 12 months, with 30% expecting ‘quite a lot’ or ‘extreme’ pressure.
Reviewing your cash flow over the past year and understanding what you did and didn’t get right, and when your peaks and troughs were, will help you plan and budget more accurately for the coming year and help reduce that pressure. And if you aren’t using them in your business yet, get the right tools and advice you need for successful cash flow management.
Perhaps you have some insights from your own experiences to share. Do you review the past year? What areas do you focus on?