Financial Year Planning.
During the time as a business owner we do our Planning, for the following 12 months, maybe 24 months.
Businesses choose to do planning either by the Calendar Year or the financial year, there is no right or wrong way, however the majority of the bigger companies, choose the financial year, as this helps with setting budgets according to each of the tax years.
I prefer and recommend to my mentoring clients, to consider doing their planning during the financial year time, July 1st to June 30 , which matches the financial year to work with the Tax system currently in Australia, and helps to keep everyone on the same page, including your accountants.
Depending on the size of your business, and who needs to be involved in the approval of budgets stage, will depend on when you need to start your planning.
Larger companies, or businesses who have a higher approval requirements, e.g. might be department heads, it might be the CFO or the Accountant, will often start earlier, e.g. around the October in the previous year. They often spend October/ November to write down their plans and work out what they want to do in the following year. Then there is a month or two to gain all the quotes and costings and to work out who they are going to use. Then comes a month or so to start discussing with the CEO or a Board if one is in place, to gain the final approval of the budget, sometimes there can be a month or two of discussions on what should be approved and what is not.
So no matter what size your business is, now is the time to start planning for the following year, consider what you want to do, what is your budget on the items you want to do, prioritize which items are important and in what order, just in case you cannot stretch the budget to where you want it go.
Consider making an appointment with your Accountant, Business Coach, Mentor, or just a friend who can assist you in helping you to decide where you want to take your business in the future, remember you don’t need to do everything yourself.
Once you know which months you are spending your money, you then know how much you need to make in those months, and then start looking at how you are going to achieve this, how much do you need to earn each month, how many clients/ products do you need to do, in order to achieving this, and is this truly possible at your stage of business, be honest with yourself.
Best way to plan.
Work out who is going to work with you to help you plan for the next year, e.g. is it family, your accountant, service provider, friend, do you have an advisory board, ensure they understand your business to be in a better position to help you, prior to the planning meeting.
With a couple of people, or on your own if you wish, set up a white board, a butchers paper, computer document and write down/ list on what you want to achieve for the next 12 months, then you can start to look at the key components which can help you achieve those items.
Set time aside away from phone and emails, so you can spend some quality time on this, remember if you are using friends, mentors, accountants etc to allow time for meals, coffee/ water etc, keeping everyone fed and watered can help with being more productive.
It is not too late now to start your planning, it will depend on your approval process on how long it will take, if you have a long approval time frame, then you will need to work a little faster to allow for the approval process to take place. Remember we have only just started April, so you have April, May and June to complete the whole process.
Happy Planning and good luck for the next financial year.