Expert Eye: Business resolutions can make for prosperous year, say Duncan & Toplis
The start of a New Year is often a time when we make resolutions for the year ahead, writes Simon Shaw of Duncan & Toplis.
These resolutions don’t just need to be personal, it is just as important that businesses continue to plan for the year ahead. With much uncertainty in the business landscape it is important that any plans or goals are realistic and can be adapted as circumstances change.
The saying that cash is king is as important today as it has ever been. The ability for a business to have sufficient cash to trade and invest is going to be central to any plans in 2024. Now is a good time to revisit those budgets and cash flow forecasts and ensure they remain valid with the knowledge of past trading and expectations for the year ahead.
We are seeing good news with a lower rate of inflation and the possibility of reduced interest rates, but please remember that there is still inflation in the economy and certain business costs will continue to increase. Events outside of a businesses control both locally and nationally may well have an impact on plans and costs. There continues to be uncertainty over consumer demand with a mixed picture over the Christmas period. Ensuring budgets and forecasts can be flexed to accommodate any changes in demand for goods or services as the year progresses is going to ensure there is a clear picture of the year ahead.
The cash flow forecast might identify pinch points in the year ahead. Identifying this possible need as early as possible will enable business owners to put in place appropriate funding with current lenders or seek alternatives.
As with any forecast, keeping this updated as circumstances change and new opportunities are generated is vital to ensure the business stays on the right path.
Businesses may have cash tied up in monies owed to them or stock items. A review of these to see where cash can be generated will often provide a cash boost at the start of the year. Discussions with suppliers may also allow payment terms to be improved and early payment discounts negotiated to improve profit and cash flow. A 5% supplier discount can easily make a large difference to the bottom line.
We live in a world where technology is fast moving and the tools available to businesses are ever changing. This gives businesses an opportunity to evaluate their current financial systems to ask if they are providing the most efficient use of time and what tasks can be automated. As well as freeing up time this is also likely to give the business owner a more real time view of the financial performance and allow them to take decisions quicker.
Taking proactive steps now will set a business on the right road for 2024 and enable the changes to be made for a prosperous year ahead.