And another New Financial Year has rolled around. Mine started with a New Year present from my husband of an iMac computer. For the past two years, I’ve been working solely on a Macbook Air laptop and whilst I love it, the small screen is a strain on my eyes. So the big 27” screen of my new computer is massive by comparison.
Not only do I have the new computer, but I’ve tidied up my office, sorted out paperwork (yes, although most of what I do these days is online, it seems almost impossible to be completely paperless), and re-arranged the office to fit in the computer and also a new printer I’d bought the week before. So now I’m ready for the next year, or am I?
Not really, you see for me, the start of a new financial year means setting new goals for my business, establishing a budget and updating my cash flow projections. In order to do this, I follow a few simple steps.
In the lead up to 30 June, I reviewed all my costs and identified those I could eliminate, those I could reduce and those which have to continue. Thus, the first part of my budgeting is already done.
Identify Available Capacity
It’s all fine and good to want to grow my business, but if I don’t have the capacity to take on more work, then there’s no point in thinking I can. I take a good hard look at how much time I’ve spent working last year, identify whether there is any capacity for taking on more. I then do the same with my team members. I look at what work can be delegated to others whether to existing team members or to people yet to be employed and how much capacity does that give.
Based on the available capacity and reviewing the service offerings I currently have, I am then able to set goals for the upcoming year. Goals like how many new clients I can take on, how many products can I sell, what other work can I offer my existing clients and so on. Armed with this information, I can then set my revenue goals that will be included in the budget.
Creating the Budget
I’ve now identified my revenue goals, I have my ongoing expenses that continue from the prior year and where I’ve determined I need additional team members, I know when they will be needed and can estimate how much that will cost. Then and only then do I put together the monthly budget of revenue and expenses.
Updating the Cash Flow Projection
I also maintain a monthly cash flow projection for the upcoming four to six months where I identify in detail when I expect the revenue to hit my bank account and when I need to pay the expenses. By entering my bank balance at the beginning of the period I can see whether I have surplus funds at the end of each month or not.
Once this is all done, then I’m truly ready for the New Financial Year.
If you’ve not set your goals, prepared your budget and cash flow projections for the new year, take the time to do so now, or contact me to help you do so.