The Importance of Setting Financial Goals: Achieve More with SMART Goals
Learn how to set clear and achievable financial goals using the SMART method. Start planning for your financial future today with Poole Advisory.
Smart financial strategies are critical to building a thriving business. But if you’re like most business owners, you’re too busy trying to juggle an impossible list of high-priority tasks to give business financial planning your full attention. It’s easy to get preoccupied with driving growth, pleasing customers, and keeping your staff engaged, placing financial strategies in the “I’ll do it later” basket.
However, if you don’t take proactive steps to plan for your business’s financial future, you may fall into traps that cost you dearly. These tips will ensure you manage different aspects of your business financials adequately and set a foundation for long-term success.
Forecasting and budgeting are important tools to ensure you operate in financially stable conditions. When used together, forecasting and budgeting can help you:
A forecast involves comparing your current state with past performance, so you can make informed decisions for the future. The key steps to creating a forecast are:
Budgeting helps you estimate revenue, expenses, and cash flow, so you can make strategic financial decisions that align with your goals. The 5 key steps to budgeting are:
An accurate forecast and budget will give you smooth financial foundations to operate in the short-to-medium term. However, you still need to set aside time and resources to make a strategic financial plan for the long-term future. Make sure you have the following in place to design the future success of your business:
It’s easy to get stuck in the present as a time-poor business owner, but strategic planning is an essential ingredient for long-term financial success. It provides you with a roadmap, framework, and accountability for your business’s goals.
Even with proactive forecasting, budgeting, and future planning, your business may face unexpected costs throughout the year. For example, a growing number of businesses are incurring superannuation guarantee charges (SGC) for failing to pay employee superannuation on time, in full, and to the right fund.
In the 2022-2023 financial year, the Australian Tax Office (ATO) estimated the workforce missed out on 5.1% (or $3.6 billion) worth of super. To protect workers from late or missed mandatory superannuation payments, the ATO uses a range of compliance measures for business, from simple reminders to full-scale investigations that arise from employee complaints.
Here are a few tips to consider when managing your superannuation obligations to avoid audits, complaints, and financial penalties:
It’s also a good idea to provide clear information to your employees about their super entitlements, so they feel comfortable raising concerns internally before they contact external authorities.
Regardless of whether you’ll sell your business in the next few years, or you just want to be prepared for the possibility as a contingency, keeping your financials in order is the key to a ‘sale-ready’ business.
Any worthwhile buyer will do due diligence before they make an offer to buy your business. Your forecasts, budgets, and strategic plan – as well as your financial statements – will be top of their list to review. You need your financials to be available, accurate, and reconciled to avoid diminishing the business’s value.
Being prepared in this manner not only ensures a smoother sale, but it also attracts more qualified buyers who are willing to offer a greater sale price. Plus, you can also feel confident that the new owner will inherit a business with sound financials, leaving them well prepared to make the business thrive and carry on your legacy.
If you don’t have the time or specific financial knowledge to implement the steps outlined in this article, it’s a good idea to speak with a qualified advisor. At Poole Advisory, we help business owners in Bowral, the Southern Highlands, and Sydney with financial planning services including:
We can walk you through and implement a business financial plan to protect your business investments and financial future. You can get started by booking a free introductory consultation with our Principal Financial Advisor Anthony Poole here or use our contact form to send through your enquiry.
This information contains general advice only, that is, advice which does not take into account your needs, objectives, or financial situation. You need to consider the appropriateness of that general advice in light of your personal circumstances before acting on the advice. You should obtain and consider the Product Disclosure Statement for any product discussed before making a decision to acquire that product. You should obtain financial or credit advice that addresses your specific needs and situation before making investment or borrowing decisions. Taxation information is based on our interpretation of the relevant laws as at 1 July 2018. While every care has been taken in the preparation of this information, Prosperitas Partners Pty Ltd does not guarantee the accuracy or completeness of the information. The case studies are hypothetical, for illustration purposes only and are not based on actual returns
Poole Advisory Pty Ltd ABN 15 642 040 604 is a Corporate Authorised Representative (No. 001282603) of Prosperitas Partners Pty Ltd ABN 30 662 654 453 AFSL 544 917
Learn how to set clear and achievable financial goals using the SMART method. Start planning for your financial future today with Poole Advisory.
Learn the essentials of superannuation, including contribution types, SMSFs, and tax benefits, to help secure your financial future in the Southern Highlands.
Want an extra stream of income? Then income investing could be for you. Discover how to make more money each month through your investments.
Learn how to set clear and achievable financial goals using the SMART method. Start planning for your financial future today with Poole Advisory.
Learn the essentials of superannuation, including contribution types, SMSFs, and tax benefits, to help secure your financial future in the Southern Highlands.