Give your company an annual check-up

You’re flat out all year, running your business each day, managing staff and customers and suppliers, and planning for the future.

main

You’re flat out all year, running your business each day, managing staff and customers and suppliers, and planning for the future. But to make sure your growth plan is on track, and you’re not overpaying on things like tax, you need to sit down once a year and review your strategy.

You’re flat out all year, running your business each day, managing staff and customers and suppliers, and planning for the future.

But to make sure your growth plan is on track, and you’re not overpaying on things like tax, you need to sit down once a year and review your strategy.

Many business owners use the deadline of the end of the financial year to do this: others do it in the post-Christmas-New Year quiet period – if they have one. The financial-year deadline at least has the business owner thinking in terms of getting the accounts in order, sifting through receipts and sorting out late payers, but the problem can be that there is a sense of scrambling toward the cut-off point.

It makes sense to many businesses, however, to use the fact that a new financial year is about to start to make the kind of resolutions that people make in their private lives, coming into a new calendar year – but with, hopefully, a better chance of sticking to these resolutions.

Small business owners are conditioned to take the time to ensure that their accounts, business activity statements, pay-as-you-go (PAYG) tax reconciliations and superannuation contributions for employees are up to date in the lead-up to financial-year-end – or at least know they should – but are not as conscious of the need to examine all aspects of their business.

No matter when you make the time to do it, it’s important to take a little time to consider the broader health of your business and what you can improve.

There may be new systems, tools and apps that you could implement to bring greater efficiencies to your business. Take some time to assess where your business has grown and where new opportunities lie, and which areas of the business are struggling.

Think of it as giving your business an annual service – as you would your car.

“Business owners can often get bogged down in the trenches, working day to day. Even though they work hard, they don’t necessarily go in the right direction, or work on projects that help to grow and develop the business,” says small business adviser Dr Warren Harmer, founder of The Business Plan Company. “It’s also easy for the business to be going off track, but they don’t see that, because they are too busy and only have the view from their own position.”

Putting together a business plan, says Harmer, involves taking everything apart: marketing, financials, management, sales, staff. The annual review should follow the same procedure. “It’s very easy to find the parts of the business that aren’t working and set a clear plan of action for the next 12 months,” he says.

“A plumbing company I worked with recently were struggling financially, even though their revenue was growing. When we analysed the business, we found they were spending too much time on low-value contracts, and their staff non-billable time was too high. They were barely doing any marketing and certainly not to capture the clients they wanted. Also, they were about to be blindsided by staff departures.”

Harmer created a 12-month plan to work through their challenges and get back on track. “For the business to keep growing, it is crucial to be always working on extra projects that help to develop the business: better systems, improved communications, new products, constant marketing. I find it works best to give owners small projects to work on, one at a time.”

The business’ insurance cover should be an integral part of the annual review: it’s important to ensure that your current coverage package still reflects what you need, and that you’re paying for the right policies. As your business grows, so does your need for different insurance plans. And it’s not only coverage that should be reviewed – so should your level of premiums. In fact, your annual review should not be considered complete without a fresh set of quotes for the coverage the business needs for the next stage of its journey.

Originally published as Give your company an annual check-up