Financial New Year’s Resolutions For Your Business
Financial New Year’s Resolutions or Creating a 2021 Business Plan
The start of 2021 hasn’t quite been what we were all expecting so even if you have made some new year’s resolutions for your business you may have had to, or need to change them quickly to adapt. Financial New Year’s Resolutions really are the same as your Business Plan.
Creating, documenting and reviewing your financial New Year’s resolutions for your business is a good way to help ensure that your business is successful and stands the challenges ahead of us in 2021.
It is now more important than ever to ensure you are making the most of your business and adapting it as you need to in line with current restrictions from either coronavirus or Brexit. You should also be utilising any of the available allowances and grants the UK government has given to businesses if they will benefit you. A business plan or your new year’s resolutions will help you formulate your 2021 business plan/resolutions and ensure you can quickly adapt and change as you need to in this challenging environment.
A business plan will help you:
- Clarify your business’s purpose
- Clarify performance, trends and reasons for performance
- Spot potential problems enabling you to redefine focus areas
- Set your goals
- Measure your progress
A Business plan generally has 6 essential parts and the key to a successful one is to review it every month to see where you are against your plans and any actions or objectives which need to be added or changed.
1. Executive Summary
This should include an overview or summary of your business and its purpose. This would include your vision, values and your high level aims for the year. Some people leave the high level plan section until they have worked through the rest of the document.
The opportunity section should answer 5 questions:
What you are selling (product or service)?
How are you solving a problem or a need in your market?
Who is your target market?
Who is your competition?
What are your opportunities in the market and your business?
The actions you will you take to maximise the opportunities you have identified answering:
What actions are you going to take to maximise the opportunities you have identified in section 2?
It’s a good idea to split your actions and objectives into People, Process & Performance
This section should also include your sales & marketing plans, operational plans, and your milestones and metrics for success.
4. Company Structure
Add a current structure and identify any opportunities or threats with any changes which can be made to improve customer experience, performance and profit.
5. Financial plan
Sales plan, revenue, costs, profit and loss predictions which you should plan using your last year’s performance and the stretch you will achieve or the performance you will maintain.
6. Monthly, Quarterly & Annual Objectives to achieve your business’s financial goals
Use smart objectives for these to ensure you are able to effectively review them month, quarterly and annually (What, How, When)
When setting yourself your monthly and annual performance objectives you should review your previous years operational and financial performance and last year’s business plan.
You should do this by month for each year as well as having an end of year summary for each year. This will give your year on year performance showing you peaks, troughs and seasonality of your business performance. It’s a good idea to use the same format for the past 3-5 years if you have been operating that long as this will show year on year patterns and trends. Summarise each month with reasons for performance being as it was so you can refer back to it at any time and set your goals around it. Graphs are a good way to visualise this section and will help you see trends that you may not have seen if you are just looking at a table of numbers.
Again, a good way to think about each month and each year is through People, Process and Performance and add what went well and what didn’t go well.
Increases or decreases in performance can be due to many different factors, examples being: business seasonality, new website sales, new contracts, loss of contracts, weather, coronavirus and these will all depend on the type of business you have. These reasons will help you focus on the things you can focus on to improve, create new business ideas to work on and often decide to move away from certain products, or services that don’t give you the return you need.
As a summary page you can show your data and comments for each year. Every year you then just need to add the next year’s months to the back of your pack making your forward planning much easier.
As part of your planning you should always review last year’s business plan against your business’s performance and this will help you understand what went well, what didn’t go well and what you need to change in the coming year.
In your objectives section set yourself short and long term goals. Short term being the next 1, 3, 6 months and long term being the next 1, 3 and 5 year goals. These goals and objectives can then be translated down into team goals and performance measures which you should get your team involved with as they will be more engaged and feel part of your business’s strategy planning making it more likely to succeed.
There are lots of good templates available for you to use for your business plan and every time you review and amend your business plan you will adapt it so it works for you. There is no right or wrong way to write a business plan, it’s more important that it meets your needs and works for you.
Choosing an Accountant
Having a Business Plan is a great starting point but you should always have an accountant who will work alongside you and give you advice on your business plan, your finances who will be an expert in tax returns, tax, VAT and much more. They will help you and will understand how you can make the most of your finances and any financial support available for your business during this pandemic.
Coronavirus (COVID‑19) support is available to both employers and the self-employed, including sole traders and limited company directors. You may be eligible for loans, tax relief and cash grants, whether your business is open or closed and your accountant will be able to advise you on this and help you identify the benefits.
Government Support Available for your Business:
If you’ve had to ask your employees to stop working or work less because of coronavirus (put them on ‘furlough’) you can get support to pay their wages for the hours they do not work.
The government will pay 80% of employees’ usual wages for hours they do not work, up to a maximum of £2,500 per month.
The scheme is open until 30 April 2021.
If you’re a UK VAT registered business and had a VAT payment due between 20 March 2020 and 30 June 2020, you can defer payment until 31 March 2021.
You can reclaim Statutory Sick Pay you’ve paid for employees who are off sick, self isolating or shielding because of coronavirus. This scheme will cover up to 2 weeks of SSP for every eligible employee.
You can get 2 one off taxable payments. The first payment will cover 1 November 2020 to 31 January 2021. You’ll get 80% of your average monthly trading profits or £7,500 (whichever is lower).
The second payment will cover 1 February 2021 to 30 April 2021. The amount has not been announced yet.
You can get loans and other kinds of finance of up to £5 million for small or medium-sized enterprises or if you’re self-employed.
You might be able to borrow between £2,000 and £50,000 for a small or medium-sized enterprise, or if you’re self employed.
The government will guarantee 100% of the loan and for the first 12 months you will not have to pay any fees or interest, or make repayments. If you already have a Bounce Back Loan but borrowed less than you were entitled to, you can top up your existing loan to your maximum amount. You must apply for the top-up by 31 January 2021.
If you cannot pay your tax bill on time because of coronavirus, you may be able to delay it without penalty using HMRC’s Time to Pay service.
The Kickstart Scheme gives you financial support to create new 6-month job placements for young people who are currently on Universal Credit and at risk of long-term unemployment. The scheme is open to all organisations.
There are also grants available from your local council which may support you at these times.
You can sign up here for email updates about business funding and support and your accountant should also be advising you of these and if they will be beneficial to you. :
Why is Strategic Planning for your Business Important?
Strategic planning, setting goals and milestones for your business is vitally important and they should be reviewed and amended regularly with your accountant. Strategic goals and a review of your milestones keeps your operation and finances in check which will enable you to proactively take action on things before they become a problem.
Why is Business Growth Vital for your Business?
Business growth goals are vital to keep you business moving and progressing. A business which stands still will often be caught out and surprised by competitors or changes to the market and this can leave you open to financial issues without the time to take any actions to resolve or address them.
Business growth should be stretching but also realistic at the same time. Setting unrealistic targets will be demoralising for yourself and your team and will make you feel you aren’t achieving what you planned to do. There is a fine balance between stretching and realistic and a good accountant will be able to help you with this, as well as having regular reviews with them to see where you are.
Why is Management Information Important for your Business?
Management information is essential for you to make crucial decisions in your business so you should always have reports to show your sales, revenue, costs, profit and loss. Your accountant is crucial to ensuring you have the right information you need to make informed decisions about your business and they will have the expertise to help and guide you with this.
Hayvenhursts Chartered Accountants in Cardiff
It doesn’t matter if you are a ‘start-up’ business looking for an accountant for the first time, or an established business looking for more from your accountant then we can help. Whether you are based in Wales or anywhere in the UK we can provide you with a diverse and supportive accountancy service to suit your needs and business. Our ethos is to develop an understanding of your business, its needs and goals so we are able to offer you the personal services of a local accountant but with the infrastructure, knowledge and expertise of a large national accountancy practice.
Choosing an accountant is vital for the success of your business and you should always spend time to ensure you find the one which suits you and your business needs. You should always be able to trust and feel completely comfortable with your accountant.
At Hayvenhursts we give you advice and you can use our expertise when it comes to your business’s financials. We can be involved with as little or as much as you need from financial reporting, taxation, auditing, forensic accounting, corporate finance, business recovery and insolvency. We can support you with accounting systems and processes and we will work alongside you to drive your business forward, bringing our skills of strategic forecasting along with our expertise in finance, accountancy, auditing and taxation which is essential to every business, and even more so in today’s climate.
We are available for advice and support when you need us by call or video call and we won’t charge you for every call you have with us.
We offer an extensive range of accountancy and business support services from business planning through to reporting and end of year tax submissions. We commit to spend time getting to know you and your business so we can adapt our accountancy services to suit you and support your success.
Hayvenhurst Accountancy Services:
Book-keeping Health Check
Business Health Check
Contractors and IR35
Inheritance Tax Planning
Management Accounts & Information
PAYE Health check
Payroll & PAYE Returns
Reduce your SRA Audit Costs
Tax Enquiries & investigations
Tax Returns & Self-Assessment
VAT Health check
VAT Planning & Disputes
If you want to set yourself some Financial New Year’s Resolutions For Your Business and you don’t know where to start, or you need some support, please contact us today on 02920 777 756. We will answer any questions you may have or we can arrange for one of our expert and knowledgeable accountants to contact you.