Your new financial year resolutions

The start of a new financial year normally brings around a sense of trepidation among many.

Was our stocktake done properly? Were the employee PAYGW certificates issued? What about the travel allowances? Can my dividends be franked this year? When do I have to schedule the auditors in? Do I have to schedule auditors? What will the bank think about my performance?

A starting point for a new year is to stop. Take a moment and reflect on what the year has looked like and how you feel. Dust off you new years resolutions and see how they are going – not to bring about a sense of guilt but simply to take stock of how you have progressed.

The great thing about June is that you are halfway through the calendar year. So you have a lot of time left until the next set of new year’s resolutions come along. And you can actively change your behaviour now so that you start to become the person that you wanted to be 6 months ago and to run a business that you wanted to run 6 months ago.

Goal Setting & Business Planning

If you have never done goal setting have a think about doing it now. How many “date nights” do you want with your spouse? Do you want to be the type of parent who picks their kids up from school? How much will the mortgage reduce in 12 months? What type of return is the family business going to generate? What type of PR activities do you want to do in January? How much will the family business reinvest back for future growth? What about your fitness goals? How much do we want to spend on leadership development?

This is the essence of business planning (and lifestyle planning as well). Identify what a great year will look like in 12 months time and then consider what is needed on a quarterly, monthly and weekly level to make sure you get that great year. However the real value is not in the preparation of your goals. The value is in the constant monitoring of your activities and changing what you do so you will meet your goals.

The best of plans and forecasts will fail. Life will get in the way, major clients will leave, people will get sick, a family crisis will emerge that throws you off your game. So the benefit of a robust forecast and a structured review process is to ask – am I on track? Do I need to change my behaviour? Will I still get want I want?

It’s not all bad news. Sometimes a forecast beats the wildest expectations by a stroke of good fortune (or opportunistic management). But does that great outcome make you strive to achieve more? Or does the lead we get become squandered away with a lack of direction?

Sadly, to date, we have found that very few businesses do structured goal setting. Most families in business leave their fortunes to the winds of change and try to see what happens after they are pushed in a certain way.

A future vision of the business typically ends up looking like an excel spreadsheet with formula errors. They only focus on the profit and loss while ignoring the balance sheet (let alone the cash flow). And even if that does happen we find that the heavy lifting of preparing a forecast becomes a forgotten obsolete relic. The process of dusting it off the forecast and looking at what you have done to what you wanted to do is clunky and time consuming. With busy owners and stretched staff the not urgent but important work is forgotten. If somebody gets a spare hour they look at the forecast only to find it somehow does not “make sense” or they have to spend that time retyping data from one program into the next.

Any higher level thinking about how to change your behaviour to make sure you get what you want is forgotten. We are all just too busy. Too busy trying to understand formula errors and retyping obsolete data into excel.

And if you give the problem to accountants it just gets worst. You engage highly skilled people to do the same boring, low value, data entry work that you were doing. And again, scarce financial resources become wasted on services that do not generate any real value. No change is created in the family business by using those scarce resources.

Thankfully technology is changing all that.

Software that was previously the domain of large international companies is now increasingly becoming available for all businesses. So the need to spend hours developing complex excel formulas with macros, what-if statements and accounting jargon into excel simply does not exist. And by using cloud accounting programs you can get real time reports that you compare how you are going to how you want to go on a daily basis.

And your forecasts can include both financial and non financial data. So think further about a forecast and aim for cultural issues like an increase in your net promoter score or reducing the number of lost time injuries.

So what does this fancy software cost? Nothing. We provide you with the software and the tools to do all of this stuff for free. Other firms that charge around $1,000 a year for this type of software. But we pay for it, and not charge, simply because we want our families who own businesses succeed. Of course the flip-side is that if our families are all successful then we will naturally become more successful as well.

Yes – some people get us to help with the higher level strategic issues with goal setting. We challenge those families who own businesses to think in a way that they might not have done. We drill down into the reporting so that KPI’s for key decision makers (not just owners) and structure it so that these KPIs are shown real time to selected staff. And we do all that with upfront pricing so you are not stuck in a bottomless pit of fees.

So have a think about goal setting. Set targets to what you want to achieve personally, physically, in your family and in your family business. Have some hard conversations with the family about what the business would generate if it was run by a great leader – and then start to take the steps to make yourself that leader.

Drill down into the numbers for your business and look at what it will do moving forward. Play with a few options. Get clear real time numbers clicking through the business so you can identify future outcomes in advance and change behaviour to stop, or improve, what is happening.

If you are not sure where to start have a chat. And if that is a bit scary come along to one of our seminars. We have one on 2 August in our boardroom. It is a complimentary low key run-through. You are welcome hang around for a chat afterwards or leave immediately if you have pressing commitments.

Regardless of what you do – design a life you want to live and design a business you want to run. Set goals. Actively plan, and monitor how you are going. Life will give you curveballs that pushes you off your chosen path and will hand you wins that make bring you forward. Monitor what is happening and then change your actions to deal with those curveballs or take advantage of those opportunities.

Let our business consultants help you plan for the curveballs the new year could bring your business, get in touch with our experts today.  

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