Many of us choose to improve our habits in the new year, but resolutions don’t need to be limited to ourselves. A fresh page in a blank calendar is also a good time for small businesses to reflect on their financial strategies and set goals for the months ahead.
The number of small and medium enterprises across the UK has risen by almost 25% in the last decade, despite an especially unpredictable economic climate. With so much uncertainty, taking proactive steps to improve and uplift your business can pave the way for a more financially resilient and successful future. Here are five achievable financial resolutions to consider in 2024.
The first step in steering your business toward financial success is to revisit and refine your goals. Reflect on the objectives set in the previous year and assess their attainability and relevance in the current market landscape. In other words - what worked, and why? What didn’t work - and how come?
Consider both short-term and long-term objectives, including revenue targets, expansion plans, or cost-saving measures. Use this opportunity to realign your business strategy with the market and customer needs as both evolve in tandem.
Even if sales are healthy and business is on the up, it pays to take a closer look at your cash flow management practices. Are there areas where cash tends to get tied up unnecessarily? Silos can easily build up and are easy to dismiss as ‘business as usual’ - but anything that holds up your staff, income or resources should be investigated.
Consider negotiating better payment terms with suppliers, incentivising early payments from customers (for example, a 5% discount for payments received within 30 days), or exploring financing options to bridge cash flow gaps. Your invoicing and payment systems can also significantly improve cash flow, so it is well worth taking a look at your current provider and contrasting it against competing models to make sure you’re getting the most functionality and highest yield for the least amount of time taken.
Your budget is your roadmap for financial stability. However, it shouldn’t be set in stone. Regularly reviewing and adjusting budgets allows for better adaptability to changing market conditions. Take time to scrutinise your expenditure against revenue streams and identify areas in which costs can be trimmed (without compromising the quality of products or services).
Doing this frequently, such as quarterly, ensures that your business remains financially agile as conditions change and your offering evolves over time. When it comes to financial management, it is always better to be proactive than reactive.
In today’s market, leveraging technology is a must to remain efficient and impactful. But more than simply improving core efficiencies, the right technologies used in the right ways can revolutionise financial management for small businesses.
Consider investing in accounting software or financial management tools that streamline processes, automate tasks, and provide real-time insights into your business’s financial health. These tools can simplify invoicing, expense tracking, and financial reporting, empowering you to make informed decisions promptly - and before smaller problems can compound into larger obstacles.
Sometimes, we can be too close to a problem to see it in its entirety and be able to visualise a solution. When it comes to keeping your SME in the black, seeking guidance from financial professionals can provide invaluable insights that might otherwise be overlooked.
Whether it’s consulting with an accountant, financial adviser, or business mentor, informed expertise can offer fresh perspectives and strategies to optimise your business’s financial performance. Such guidance can be particularly beneficial in navigating complex tax regulations, optimising investments, or devising robust risk management strategies.
Be sure to embrace these financial resolutions to set the stage for a prosperous year ahead for your small business. Remember, the key lies not just in making resolutions but in upholding them. If you’d like help exploring your business’s financial health and diligently implementing and monitoring progress to ensure you hit targets, get in touch with our expert team today.