The start of a new year is the perfect opportunity to evaluate your business’s performance, set fresh goals, and streamline operations for success. Just as we focus on our personal health and well-being during this time, it’s equally important to check how your business is doing. The experts share essential tips to help you assess your company’s health and prepare for the year ahead.
1. Prioritize Your Business Health Check
To kickstart the process, set aside dedicated time to focus on your business’s health without distractions. Jess Irvine, CommBank’s personal finance expert, suggests blocking off an hour or scheduling a full offsite day. Whether you prefer a quick session or a more immersive experience, it’s important to carve out time for reflection and planning.
Start by thinking about the purpose of your business. Ask yourself:
Who are your customers, and do your products or services meet their needs?
What are your business aspirations in the short and long term (3 months, 12 months, 5 years)? Use tools like notebooks, whiteboards, or even an external coach to help visualize and strategize your goals.
2. Assess Your Debt
Take a hard look at your business debt and analyze whether it’s helping your growth. Irvine advises considering whether you can meet your repayments with your cash inflows. If debt is becoming a burden, reach out to the Small Business Debt Helpline (1800 413 828) for independent advice. Ensuring your debt supports business growth is vital for long-term success.
3. Do Some Housekeeping
Take time to review your subscriptions and service fees. Michael Shafran, owner of Brooklyn Bagel Boys, emphasizes the importance of cutting unnecessary costs. Regularly evaluating software fees or subscriptions can save your business money. Simplifying your expenses can help streamline operations and free up cash for essential investments.
4. Inspect Your Cash Flow
Cash flow is the lifeblood of any business. Research by Xero highlights that 87% of small-business owners experience cash flow issues. Irvine suggests understanding your cash conversion cycle, which is the time it takes for your investment in stock or services to turn into revenue. Shortening this cycle can improve your cash flow. Tools like the Business Cash Flow View in the CommBank app can help you track inflows and outflows monthly.
May Pike, founder of Cloud Theory, used CommBank’s Trade Advance program to shorten her cycle, accessing short-term loans to cover upfront costs until payments from retailers came in. Optimizing cash flow through strategic financial management can significantly impact your business’s ability to grow.
5. Hone Your Money Management Skills
If cash flow management is an ongoing challenge, consider investing in your financial education. CommBank partners with UNSW to offer a complimentary cash flow course for customers, and their Daily IQ tool provides insights on optimizing cash flow and enhancing business performance. By mastering money management, you can ensure a healthier bottom line.
6. Set a Variety of Goals
Once you have a clear view of your business’s financial and operational status, it’s time to set ambitious goals. Irvine recommends setting goals across different areas of your business, from revenue targets and employee growth to marketing strategies and customer acquisition plans. Make sure to give each goal a specific timeframe and measurable target. This approach will help you stay focused and motivated throughout the year.
By following these expert tips, you can conduct a thorough business health check and set your business up for success in 2025. Regularly reviewing your company’s performance and making necessary adjustments will help you stay on track and meet your long-term goals.
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