“We change our tools and then our tools change us.” (Jeff Bezos)
Every January, individuals and businesses have an opportunity to take advantage of what is called the “Fresh Start Effect” – referring to research evidence that shows people are more likely to make positive changes at times that mark the start of a new time period and represent a new beginning, most notably the start of a new year.
With the right tools, businesses can maximise this Fresh Start Effect to begin the new year on a strong footing. Three business tools, in particular, are indispensable to achieve this: a business review; goals and a plan for the year – including a budget; and ways to measure progress in achieving goals and executing the plan in the months ahead. Fortunately, these tools are not expensive or difficult to use, and your accountant will be able to assist you to set your business up for great results in 2023.
- A business review
A comprehensive review of business operations is a simple but powerful business tool.It enables business owners and managers to analyse performance in achieving goals and meeting key performance indicators (KPIs), and to identify problems and spot trends timeously. Most importantly, an effective review will reveal what is working and what is not, so the team can celebrate successes and build on what is working, and also change what is not working to get better results.Some of the business areas that need to be reviewed may include:
- Business plan, sales, marketing and branding strategies.Total income to total expenses, cash flow statement and debtors’ reports, actual vs budget spend, and the balance sheet.Internal resources including the company’s people and processes.Client base, client processes and customer satisfaction.Statutory and regulatory compliance.Fees, contracts and costs.
The best way to do a business review is to involve your entire team and to call in professional assistance for a clearer understanding, particularly of the financial aspects of the review.
- Goals and a plan for 2023, including a budget
The business review will provide invaluable information and insights, creating a baseline from which goals can be set for the next 12 months. This enables planning for the year ahead, incorporating the necessary changes to get better results, as well as enhancing or duplicating the processes already generating good results.Goalsetting, as well as planning and budgeting to achieve these goals, are great tools for establishing the direction of the business for the next year, focussing the team’s attention and efforts, and improving the chances of success.SMART goals are always the most effective – these are goals that are Specific, Measurable, Achievable, Relevant, and Time-Bound. That is because SMART goals are clear and quantifiable and can be broken down into a plan that details the specific steps or milestones to be completed – and the budgets within which to do so.
- Measuring progress during the year ahead
Measuring progress ensures both better management and greater motivation. What is measured can be managed, and progress on all business goals can be measured through, among others, regular and up-to-date financial reports, (KPIs) and project management tools.
KPIs, for example, are like scorecards that track performance against business goals and can be an effective tool for keeping team members motivated during the year. Experts suggest that smaller businesses should start by measuring only a few KPIs in the crucial business areas of income; customers; employees; and processes; but your accountant will be able to provide invaluable advice for your specific business.
Similarly, there are different project management tools for various types of projects or management approaches. Benjamin Franklin’s advice may be helpful here: “The best investment is in the tools of one’s own trade.”
This January, take advantage of the “Fresh Start Effect,” by reaching out to your accountant for advice and assistance in using each of these business tools to set your business up for a great 2023.
Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.