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Get ready for 2020 with our 10-point business health check
Forward Thinking Business Blog –
Now that we are in December, this is a good time to review the last 12 months and prepare your 2020 forecasts so that you can position your business for the year ahead.
Key areas to focus on include:
1. Cashflow:
Looking back over the last 12 months will help you forecast for the coming year. Keep an eye out both for growth opportunities and potential trouble spots such as periods when you might under pressure to have cash in place to pay suppliers or staff. Set targets and put procedures in place to monitor progress.
2. Costs & Capital Expenditure:
Review your overheads and look for opportunities to make savings. Involve employees in this process as they may spot opportunities that are not immediately apparent to you. If you have not done so in the last year, check for potential savings—for example could you save by switching suppliers or negotiating better terms? What capital expenditure is planned for the coming year? Are there any changes or timing differences that may need to be taken into account?
3. Working Capital:
Brexit may affect working capital in 2020. Review stock levels and, where possible, encourage customers to purchase sufficient stock in advance to carry them over in the event of any Brexit-related delays. Look for opportunities to enhance working capital—for example by improving debtor control and/or agreeing better credit terms with suppliers.
4. Currency:
With Sterling fluctuations likely to continue in 2020, you will need to continue to hedge and manage currency risk proactively.
5. People:
Are your staff levels adequate for the coming 12 months or will you need to hire additional team members? Have you looked for opportunities to improve productivity or save costs, for example by amalgamating roles and/or outsourcing non-core functions?
‘As we approach the end of another year, this is a good time to stand back and take a strategic look at your business’, says Michael Farrell.
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6. KPIs:
Check that your Key Performance Indicators are still appropriate and are aligned to team and individual goals. Make sure that you have a processing place to monitor KPIs and to take prompt action if slippage is identified.
7. Risk:
Check that all relevant business risks are being identified, mitigated and monitored and that you have adequate insurance in place.
8. IT Security:
Most businesses are more reliant than ever on technology so it’s vital to have good IT security and backups, including offsite backups.
9. Strategy:
Review last year’s plan and check whether your strategies are working. Are there areas that need to be adapted due to sectoral changes, new regulations, entering new markets, etc?
10. Tax:
Check that you are claiming all relevant tax deductions, that you are up to date with recent changes and are complying with relevant tax law.
When you have completed your review, your findings will help shape your forecasts and business plan for the coming year. Remember to communicate your plan to your team and set clear goals to keep everything on track.
If you need advice or assistance with forecasting or business planning…
