Business owners – Make this financial year the best ever with just one change

Author: Tony Rule, Partner, TAG Financial Services

Wednesday 30 June 2021 put a full stop on what has been, for many, a long and testing financial year.

A turbulent year

The year closed out with almost every state and territory in some form of lock-down, border closure or pandemic related restriction. Many businesses particularly in Victoria have suffered multiple forced closures or radical changes in the way they do business with customers, suppliers and employees. For some businesses, the JobKeeper program and related assistance allowed them to survive through a business crisis, or help restore lost profitability in what was a turbulent year. For everyone, without doubt, 2021 was the year of adapting to change.

Business disruption has also been matched by personal disruption during the year. Cancelled holidays, long periods working from home, home schooling and restricted socialising has also had a significant impact on business owners, employees and the public at large.

Rise above (and focus on your desired outcomes)

We have now started the new financial year and we are far from out of the woods. Supply disruptions, new ways of doing business, recruitment and trying to maintain a functional culture will continue to be challenges for the foreseeable future. In this environment, there are often important business driving tools that are forgotten or are set aside in order to focus on dealing with the next crisis.

But just because things are difficult, business owners cannot go missing in action. We must rise above these distractions and focus on getting the desired outcomes.

The biggest weapon in business is your mindset. Henry Ford said it first (and best) when he noted that:

“Whether you think you can, or you think you can’t – you’re right”.

Business owners set the direction, motivation and results of the business through their thoughts, words and actions. Yes, goals will need to be re-considered (and potentially adjusted), but difficult times are no excuse not to have goals and objectives that you and your business should be striving for.

It is common for business owners to engage someone external to the business with appropriate levels of acumen to assist in setting and achieving goals. This process starts with having a budget for the business to aim towards. From this budget, targets can be selected to become key performance targets for the team.

The most common measure is sales, but other measures (such as gross profit or gross margin) can also be used. That key measure then needs to be broken down to identify the tasks that need to be performed to generate those sales (which might be prospect calls, quotes, referrals, website hits, foot- traffic or other measures relevant to your business). Targets around these tasks can then be set and shared with the team.

The key point here is that it is not enough to just nominate the dollar result you are after – you must be confident that you team are doing the right actions that will lead to the outcome you are after.

Board meetings provide results

Our clients who have initiated quarterly board meetings have seen great results.

These meetings give the business owner the opportunity to remove themselves from the daily grind of business to think deeply around developing the business away from threats or towards opportunities (or both!) and formalise their strategic thinking. Board meetings provide a forum where ideas can be developed, tested and measured to ensure the business is heading towards its goals and objectives.

The benefits of such meetings are usually easy to measure – in most cases the outcomes should be increased profitability, but there can be other outcomes. Succession planning and implementation, improving work/life balance for the business owner and re-positioning of the business to take advantage of future challenges can also be chosen outcomes.

Most importantly, you need to make sure that an outcome is being achieved and that the business is doing everything it can to maximise its opportunities.

Make this year the best one yet!

We have started a new financial year and this represents a chance for business owners to re-commit to their goals and to ensure that they are getting what they deserve from their business. Be clear about what you want and then put your plan in place to achieve those goals.

Make your new year’s resolution today

For more information, about quarterly board meetings please contact us on 03 9886 0800 or via email.

What should you do now?

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Disclaimer: The information contained is general in nature. Professional advice should be sought before acting on any aspect on this page. Financial planning services provided by TAG Financial Advisors Pty Ltd (ABN 77 154 205 017 AFSL 415632), a wholly owned subsidiary of TAG Financial Services Pty Ltd (ABN 67 075 374 686). Copyright 2021. Please do not reproduce without the expressed written consent of the author.