Planning for Success | John Zerella
This is the time of the year that businesses are madly going through the End of Financial Year ’thing’. But what does the EOFY really mean to you? As business owners we are often inundated with tax minimisation strategies or we are considering making capital purchases for our business. Whilst these are worthwhile tasks, albeit a bit late in the financial year to really make a meaningful difference, they deal with the past and history. The EOFY should be about planning for the year ahead, so I’ve identified the 5 things you should be doing on, or before, the End Of Financial Year:-
1. Review your performance for 2017 FY and identify if there are in fact any last minute meaningful expenditures that can minimise tax. Your accountant should be able to provide some sound options, least of which is to review your superannuation requirements. Significant changes to be enacted as of 1 July 2017, mean there are some opportunities that exist in this area.
2. Review your business plan. If you have previously prepared a business plan now is the time to review your performance compared to what you set out to do. Identify, quantify and qualify discrepancies in your performance to either substantiate these discrepancies or make those accountable if they cannot be substantiated, this also includes yourself! If you have not prepared a business plan I suggest you start right now!
3. Compare your financial performance with your budget set last year. Once again identify, quantify and qualify your budget variances to either substantiate these variances or make those accountable if they cannot be substantiated, this also includes yourself! The answers to what went wrong or what went right, influences any future planning and allows us to continually improve. This is an important, but not limited to, function of preparing budgets and comparing budgets to actual performance.
4. Prepare and set your 2018 budget which must be a well thought out process with meaningful and substantiated assumptions. Many business owners think that setting a budget is simply applying an increase or decrease percentage to last year’s budget, or even worse, just guessing the numbers. If this is the way you prepare your budgets, then it’s a waste of time, but not quite as bad as not preparing budgets at all. Your budget setting process forces you to future ‘think’ your business and is a ‘must’ for planning for success.
5. ‘Soul search’ your future. This is an opportune time to do some ‘soul searching’ about your business and about you and your family. Take a very long view of your business and your life. Ask yourself where do I (my business and my family) want to be in 20 years’ time, even 30 years’ time? When you sent your horizon so far ahead your take on a very different perspective and allow yourself to view life through a very different lens. It’s an invigorating and moving experience and I urge you to try this at least once a year.
So let’s not make the EOFY about the past or dealing with history, it’s not the END of anything but should be your opportunity to start something great, new and plan for success!