The start of a new financial year often creeps up on us. Before you know it, April has been and gone, and there’s talk of forecasts, budgets, and tax returns. If you run a small business, now is the perfect time to grab a cuppa, breathe deeply, and give your finances a little TLC. Financial planning might not seem like the most thrilling way to kick off spring, but trust me, a bit of organisation now can save you a heap of faff later on.
First things first, reviewing the past year is a good idea. Look at what went well and what made you want to cry into your tea. Were there months that were quieter than others? Times when cash flow disapperared into the abyss? Understanding these patterns will help you plan better for the year ahead.
Next up, setting goals. Not just vague ones like ‘make more money’ but specific, measurable goals that feel achievable rather than laughable (everyone loves a SMART goal!). Maybe you want to increase your revenue by a certain percentage, or perhaps you dream of enough stability to take a proper two-week holiday without checking your emails every five minutes. (Imagine. Sun. Cocktails/Mocktails. Absolutely no messages marked ‘urgent’. Sheer bliss.). Goals give you something to work towards, helping to motivate you through the peaks and troughs of business life.
When it comes to working out your expected income, don’t forget to consider all of your expenses. Be realistic, and don’t forget those annoying little costs that love to catch you out, like software subscriptions that you always mean to cancel, but never do… (that’s another task that’s worth doing if you have a spare few hours this month!)
Financial planning is not just about what you spend; it is about what you save too. Think about setting up a separate savings account for tax or unexpected expenses if you haven’t already got one. Nothing is quite as satisfying as knowing you have your tax contributions all set aside, safe and sound, with a little bit of a financial buffer if a late invoice payment mucks up your cash flow.
When it comes to saving, it’s also worth considering saving your time, as well as saving your money. To do this, it might be worth considering outsourcing some of your work in the new financial year. It may seem counterintuitive to pay out for a service when you want to save money, but it can prove very cost-effective to outsource certain administrative or financial tasks that you don’t enjoy, or aren’t skilled enough at to complete quickly and efficiently.
Think about it – if a task takes you 4 hours (4 hours of time that you could use doing client work), and it takes a skilled, administrative professional 30 minutes to complete, it’s more cost-effective to outsource it so that you can dedicate time to servicing your clients and making money! Hiring full-time staff can be expensive, and sometimes a bit overkill for the tasks you need assistance with. Outsourcing to a virtual assistant can save you money, space, and hours of time that could be better spent growing your business or, dare I say it, taking a lunch break longer than four minutes.
My final tip? Be kind to yourself. You are running a business, not a race. Some months will be brilliant, and some will be more ‘learning experience’ than ‘raging success story’. Regular check-ins with your financial plan will help you stay on track without feeling like you need to conquer everything at once.
So, sharpen those pencils, dust off the calculator, and get planning. Future you will be ever so grateful!