If you're looking to get your finances in order, to help you smash your handmade business goals, the end of the financial year is fast approaching so now is a great time to get organised and prime yourself for a year of financial success!
Following are 5 things you need to do to start the new financial year off on the right foot.
1. Set SMART Goals
Goal setting is essential in both our personal and professional lives to provide yourself with a sense of direction, motivation and clear focus, to avoid drifting aimlessly along.
However, simply setting fuzzy and vague goals isn't enough - they need to be SMART!
We've all been guilty of new year's resolutions or goals that we never followed through on. You know the ones - I want to make more sales or I'm going to eat healthier.
So how do you increase your odds of success and achieving your goals?
You need to create
Otherwise known as SMART goals. They set you up for success by pushing you further, giving you a sense of direction, identifying the metrics that define success and creating a roadmap to reach those metrics.
You know exactly what the priorities are and what you need to do to reach your goals. For example, a vague goal would be I want to grow my business.
A SMART goal relating to this would be: I will acquire three more clients for my handmade business within the next two months by asking current clients for referrals and networking with local businesses in order to increase my revenue and grow my business.
You can use our SMART goal downloadable template to create your personal and business goals for FY23-24.
2. Get Organised for FY23-24
Do yourself a favour, and develop a system for your taxes! Put a structure in place for keeping your receipts, expenses and relevant tax records to make next June a whole lot less stressful for you.
This organisation may even lead to a bigger tax return! Figure out what kinds of receipts or records you need to keep and file them neatly rather than in a big pile in your 'miscellaneous' desk drawer.
For digital documents, set up a secure folder and keep it frequently updated. Consider setting aside a percentage of your sales into a separate bank account for your GST, PAYG withholding and superannuation on an ongoing basis.
This will leave you prepared for compliance payments and not grasping for available finances - you'll thank yourself in the long run!
3. Review all Your Outgoing Expenses
When was the last time you compared your household and business expenses?
You might be paying for services or subscriptions you don't even need and no longer use! Savvy money managers annually review their personal and business service providers like utilities and phone companies.
You can use a tool like SFE Loans Connect. Look at cancelling any subscriptions you are not using - like unused software or apps and see if there are free alternatives to those where you don't utilise all paid features.
On the home front, re-examine whether you're using your gym membership, or Netflix - and avoid buying food that goes uneaten and eventually thrown out! Try writing a shopping list for groceries and assess whether you may be overspending on convenient food delivery services.
It's also a good idea to set yourself a budget and ensure you're only spending within your budget estimates. Use your credit card only for emergencies and avoid other credit services. This will help you set spending limits and financial goals, eliminate negative money habits, and help you get to where you want in business and in life.
4. Split Your Revenue to meet your financial goalsWhen it comes to managing your revenue, I recommend to my clients the Stuart Bell approach. This involves adopting the mindset of sales - profit = expenses, rather than sales - expenses = profit. Bell applies this tactic by splitting his businesses revenue into four accounts:
- 40% into an operating expenses account
- 15% in a separate tax account
- 20% to pay yourself
- The rest is stored as profit
Keep in mind that this exact process may not work for some businesses. It is important to communicate these actions with your financial adviser and listen to their advice.
5. Upskill on your financial literacy
To avoid sleepless nights and a great deal of stress (if you arenÕt experiencing this already!), it's important you have the ability to understand and apply important financial skills.
This means understanding budgeting, cash flow, interest rates and debt management, and being able to allocate your income towards your various financial goals such as savings, debt repayment, ongoing expenses and a rainy-day fund.
As a basic foundation to set yourself up for success in both your personal and business life, you really need to know:
- What your financial goals are
- How to create a budget (and stick to it!)
- What cash flow is and how you can track it
- Staying informed
- How to hold yourself accountable when it comes to creating positive spending habits
If you're looking to take action now and upskill on your financial literacy in order to reach your personal and business money goals, I've created a podcast called 'Financial FOFU' that covers a range of important financial topics based on my own experiences and what I've learnt within the financial services industry.
I also have online money intelligence courses designed to teach you how to budget, track and achieve your money goals.
Business Strategist and Accountability Coach at Helix Planning