Risk runs through everything in business. It also runs through your personal life. When you are getting ready for a new financial year, sit down and assess the risks that you face. Assess the levels of risk that are associated with your business, and your personal life too. There is no point in building a business if it can disappear quickly due to unforeseen risks. Your business may be fragile, and you don’t know it. A sudden change in the market or another ‘Black Swan’ event can disrupt or even destroy all your hard work. Make your business ‘Anti-Fragile’ against these foreseeable risks by limiting the downside impact. Here are five tips to start your financial year off right.
Take a new look at the way you have been doing things. Looking back at the previous year what: what went well? What went really well? Ask yourself ‘Why?’ Was it the decisions that you made or the external market, a combination of both or other things? Focus down to a list of what was good and then press repeat.
On the other hand, what didn’t go well? Were there any disasters? Mistakes aside, what negative outcomes can you avoid this year? Will your successful strategies keep working this year?
Use your previous year’s list of successes to reassess your business goals. Did you reach your business goals last year, exceed them or miss them by a big margin? Setting SMART business goals and reassessing them should be an essential part of your business growth strategy. Sit down with your accountant and dialogue. How will this help you with bookkeeping, financial statements, tax, audit and accounts payable for your next year end?
What worked before won’t necessarily keep working. Keep an eye on market trends. Get ‘on trend’ and stay on trend. If a new trend emerges that will benefit your business, like cashless payments, take a look at it. Assess the risks and the costs of taking a new step in a new direction. Then go for it. A big external risk like a global market crash could wipe out your business. Booms and busts are an undeniable fact of market economies. It has been ten years since the last global crash. These ‘black swan’ events cannot be predicted, but you can make your business secure against the downside effects of a large, prolonged slowdown. Then you are ‘anti-fragile’.
Everyone has strengths and weaknesses. Take time to reflect on what you are doing right and what you could be doing better. Keep examining your self; how do you behave, how does that impact other people, how does this impact your business. If your financial reporting gives you a headache, why not use small business accounting software that helps keep track of everything efficiently. Learning how to find, implement and use accounting software can save you time, money and stress at the next year end. This means that, when a key staff member leaves, your business should keep running smoothly. Then you are ‘anti-fragile’.
If unnecessary stress is giving you poor health, it may also be affecting your business. You may not be making optimal decisions for your business. This will lead to underperformance. If you make a big mistake, it could cost you a lot and could even cost you your business. Take a holiday. Life is not all about work.
If you are in good physical and mental health, the effects of a sudden negative event will have less impact on you. Then you are ‘anti-fragile’.
Starting your financial year off right helps to end it right too. In a volatile world, anything can go wrong at any time. You cannot foresee big negative future events, but you can protect your business against them by limiting the downside.