It’s once again close to the end of the financial year. But it really is not an end, just another page turning over. The turnaround into the new financial year comes as soon as the current one closes.
If business has been good, congratulations. If things could be better, plan ahead. If this year has been awful, then it’s time to roll up the sleeves and plan your next year.
Regardless of how the past year unfolded, you should look at the upcoming financial year with excitement and belief that YOU can MAKE THINGS BETTER. For this to happen, you have to have a target - a goal, and a subsequent plan to get there.
Oftentimes, we have found businesses have vague resolutions about their targets. How vague?
“I’ll cut costs and overheads”
“I’ll be more engaged”
“I’ll do more to bring in more customers”
“I’ll improve business performance for the upcoming year”
The point in setting goals is to have a clear target that you want to hit. If your goals are not clear, it will only frustrate you as you will be working and exerting effort towards the unknown. So unless you know what you’re trying to hit, you’ll end up missing every time.
A target is also measuring stick
Before a financial year starts, it’s necessary to have done projected budgets to track the performance of the business.
Knowing what type of profits you want or you can obtain by EOFY 2016 allows you the opportunity to have better ongoing analysis throughout the year. In addition, as you see how the year unfolds, you can make better decisions earlier if need be. Not when it’s too late!
Hitting targets requires accuracy. In business, accuracy can simply be clarity. Having clear targets allows you to focus on the things that need to be done.
For example, after analysing your financial statements, you and your advisor determined that you should target $2M in the upcoming financial year. That means, on average, you should be hitting $ 167K per month.
However, like many businesses there are peaks and troughs in trade where some months business is just not picking up.
You may be thinking “I can load up during profitable months, double the work to offset the lean months.”
This can work well, but also consider how you can market during the leaner months to push the envelope – package deals, or putting items on sale, or look at increasing the average transaction value, if you have fewer transactions you want to ensure they count.
But you can only do that if you know your stock levels. Better yet, have you planned your stock levels so that you have more when you need to have more, and less when you don’t need much stock? If you’re unsure of your inventory, read our review on inventory on hotels, liquor stores and pubs.
To stay ahead of the curve and the competition, a strategy has to be in place for a more profitable financial year. The end of the current financial year is coming to a close, a new one is starting. Contact us here or book a no-cost consultation with one of our hotels specialist advisors here to start setting your new financial year goals and budgets.