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Here are a few possible financial resolutions you could adopt for the coming financial year. Do any of them resonate with you?
Make accurate cash flow projections
If you have ever struggled with cash flow problems then you know how this can be a make or break aspect of your business. After all, the cash flow is the lifeblood of your business. One of the key points of cash flow management is making projections of where your business is going. If you know an iceberg is approaching you can make the appropriate adjustments ahead of time and avoid a disaster.
For next year you would ensure your cash flow projections are accurate, realistic and importantly, regularly updated.
Have an emergency fund
We all know how important it is for our personal finances to have reserve cash for a rainy day. Generally, three to six months’ income is what you should have on standby in case of an unexpected emergency.
Does your business have an emergency fund as well? It’s not just for in case of unexpected expenses, though that is certainly something you want as well. If a surprise opportunity for growth comes along you want the cash to be able to take advantage of that.
Let next year be the year that you save for an emergency fund that will not only keep you afloat in unexpected crises, but gives you the change to grow as well.
Pay your employees enough to be happy
In 2015, Dan Price caused a media whirlwind by announcing that he was setting the minimum wage at $70 000 for employees at his company, Gravity, to be effected over the course of the following three years. Many praised the young CEO, but many others ridiculed it or called it a crazy publicist stunt destined for failure. In 2015, however, his company was doing better than ever. While a couple clients left because they didn’t want to be part of what they saw as a political statement, Gravity’s overall client retention rose to 95%. More importantly though, productivity soared and new business came in.
It is still early days so who knows how the move will look in MBA case studies a few years from now (and it will most definitely be featured one way or another), but for now it seems to highlight that happy employees are good for business. For next year why don’t you start asking yourself if you could be doing more for your employees?
Weigh up profit versus growth
Sometimes you need to make decisions based on making a profit, but other times it would do well to choose growth instead. Remember that striving aggressively for either one is generally not healthy in the long run though. If you grow too fast without developing the necessary foundation to support that growth your business could topple, and if you only ever aim for profits you could stagnate and sabotage yours business.
It is a fine line to tread and finding a sustainable balance is an art form. Why not make next year the year that you re-evaluate your strategy?
This article was brought to you by Wesbank, a division of FirstRand Bank Limited and a provider of asset finance, which helps you grow your business without throwing your cash flow out the window.