EOFY is a great time to break bad business habits and start afresh. In the lead up to 30 June, here are some new financial year resolutions that can help you shape better financial habits for the year ahead.
Resolution 1: I’ll stop trying to do it all
While it’s natural as a small business owner to want to do it all, sometimes outsourcing tasks such as bookkeeping, HR or marketing, can be a smart move. You’re freeing up time to work on other important things, and relying on someone with the expertise and time to do the job to a better outcome.
Resolution 2: I won’t neglect the little things
Do you record small transactions? Do you review statements and bills? Petty cash might seem like small fry but little things add up to big things. Likewise, reviewing statements and bills may seem like a time-waster, but detecting errors and unsubscribing from redundant services can save you significant dollars in the long run.
Set yourself up for next financial year and maximise your deductions by having clearly documented procedures for keeping track of petty cash, and reviewing statements and bills.
Resolution 3: I’ll review my payment terms
To reduce unpaid invoices, you need payment terms that are clear and communicated to your customers from the outset. Take a closer look at your payment terms and think about whether your customers will understand their obligations. Also think about whether the terms themselves still suit the circumstances. Do you really need to give your customers 28 days to pay? Should you be asking for an upfront deposit?
Resolution 4: I’ll develop a consistent pricing strategy
Pricing can be a complex issue. Some business owners even put off raising their prices for fear of losing customers, which can have a negative effect on business finances. Choose a pricing strategy carefully and ensure you stick to it throughout the year. Pricing strategies include:
- Cost-plus (simply adding a mark-up).
- Competitive (based on your competitors’ pricing).
- Value-based (how valuable is the product/service to your customers)?
- Penetration (setting a low price then slowly raising it).
Resolution 5: I’ll set SMART financial goals
Setting financial goals is one of the most important habits for your business. Having goals can help you plan, prioritise and innovate throughout the year. When setting goals, make them SMART goals – make them specific, measurable, attainable, relevant and timely – for more chance of success.
If your financial goals mean you need to invest in your business, consider a small business loan to get you on track. Our small business lending specialists are here to help. Find out more about Prospa’s different financing options or contact us on 1300 882 867.
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