In the lead up to end of the financial year, many small business owners made the mistake of making tax reduction their number one goal, and as a result now face a challenging new year.In this artice I will alert you to ways you can help minimize the negative impact these problems will have on your business and how you can commence the new financial year with a positive outlook.
The end of financial year has seen many small business owners adopting inefficient tax practices, and purchasing large expensive items to take advantage of tax deductions.Other common practices undertaken, often after consulting with their financial advisors, is to buy stocks for the following year, pay some overhead expenses early and try and delay debt collections until the next year all with the aim to reduce profit and tax liabilities.
Any business owner that has utilized these strategies will be faced with many challenges at the start of this new year. These strategies will impact on their business by :
A:Reduced cash flow, restricted by the increased expenditure
B:A reduction in funds able to be put into marketing and product development and therefore inability to attract new leads and customers
C:A decreased value of the business, as a result of reduced profit
D:A skewing of financial analysis records due to altering debt collection and expense payments and therefore inability to effectively measure and record performance
If this is you, then don't fear. It is not the end of the road and you can change the direction of your business if you start now. In my experience with small businesses, I've found that there are five top strategies for businesses to start fresh in the new financial year. They are as follows:
1.Develop a definitive and comprehensive financial growth plan for the next 12-15 months. Businesses need to be setting 2009-2010's KPIs and performance drivers now.It is essential that you have a structured plan in place to work with and measure against. This will aid the performance and ensure your business is successful.
2.Increase marketing and initiative-based expenses.Without a good solid marketing system no business will succeed. It is the major factor in establishing further revenue intake and cash flow.
3.Reduce non-marketing, non-advertising and non-production expenditure.Search for impoved deals from suppliers and look for items that won't be missed by the business if they aren't purchased.
4.Collect from debtors straight away.Stop performing services on account. Get paid straight away. You are entitled to ask for payment on completion, or even in advance.
5.Get rid of your obsolete and surplus stock as quickly as possible. Converting your stock to cash will again free up money available to you in your business.
The new financial year presents the best time for business owners to seek more than just tax advice, and develop a strong working relationship with their accountant.A financial professional such as an accountant can certainly help you set your business up in the best position.But because you are the business owner, you also need to have sound financial education and be aware of all aspects relating to the financial side of your business. Staying up to date with financial education and continuous learning are extremely important.
For more information about some fabulous software and education packages please visit me at http://www.wmitoday/karlieval
