As we get into the swing of 2024, it’s not just personal resolutions that should be on our minds. The turn of the year also provides the perfect opportunity to be proactive and get on top of your business financial planning for both the short and the long term. Of course, there’s no ‘one size fits all’ approach when it comes to strategic thinking, but the following business financial planning checklist should offer a valuable starting point as you look ahead towards the rest of the year.
Reflect On 2023
At the start of any year, it can be tempting to try and hit the ground running right away. While it is always important to try and get off to the best start you can, reflecting on the year gone by is a crucial part of achieving this. After all, 2023 was an especially challenging year for many businesses thanks to high inflation and waning consumer demand so it’s vital that you take the time to look back before you look ahead. Work out what went well and what didn’t, then use this to make informed decisions.
The process of reflection should help you paint a clear picture of where your business currently stands and is therefore a crucial element of your business financial planning checklist for the year ahead. With a clear understanding of how you fared in 2023, it will be easier to work out what the immediate and longer-term priorities should be, as well as what you can leave behind as 2024 picks up momentum.
Plan For The New Financial Year
When we talk about the ‘new year’, it’s important to distinguish between the calendar year and the financial year. The start of 2024 of course marks the start of the new calendar year, whereas the new financial year does not begin until April. For many businesses, it is the latter that will hold more weight in terms of planning and reporting significance, but this is not to say that the two are not intertwined. In fact, one of the most important things you should do as you work your way through your business financial planning checklist is to ensure that you use the start of the calendar year to plan for the new financial year.
Start by revisiting your budget for the current financial year. Ask yourself whether it was accurate and then use the whole year’s worth of data to start setting budgets and targets for the next financial year. Don’t forget to identify new areas of cost or development that might make things different from April onwards and then set your goals for Q1. Be optimistic but also realistic, and make sure you set clear deadlines to keep you on track.
Consider Your Competitors
While you should never base your financial planning solely around what others are doing, it’s even more foolish to ignore your competitors completely. In fact, a thorough understanding of your competitive landscape is instrumental in shaping your financial strategy. Look first at how you compare numerically with the rest of the market in a truly numerical sense by examining key liquidity and profitability ratios against industry averages. Make sure to also think about where key competitors are positioning themselves for the year ahead by paying attention to their brand positioning, pricing and market share. These insights will help you gain a critical understanding of where you sit within the market which can then inform how you plan to stand out and achieve your financial goals in 2024.
Review Operational Efficiency
Efficiency is an often overlooked yet critical aspect of business financial health and something you should consider carefully as you plan ahead. Fundamentally, inefficient processes can lead to unnecessary costs and hamper the long-term viability of a business. You should always aim to be as efficient as possible, so use this time for planning and reflection to conduct a comprehensive review of your operational processes. Are there areas where workflows can be streamlined? Would you benefit from restructuring the business? The answers to these questions will not only guide your financial planning for the upcoming months but also inform the wider goals you set for 2024.
Act If You Have Concerns
Despite the fact that January is associated with new beginnings, the financial planning that takes place at the start of the year may expose issues that you either weren’t aware of or were hoping might be solved by strong performance in the closing months of 2023. You should never ignore concerns that you may have, and now is the perfect time to seek professional advice to steer your business towards recovery ahead of the new financial year in April.
To speak to a trusted professional about your plans or concerns for the year ahead, don’t hesitate to get in touch with the team here at Ballard Business Recovery. Our expert business recovery experts have years of experience offering strategic advice to businesses unsure of their next steps. Whether you think that restructuring is on the cards or just need a fresh perspective, speak to us today.
