2024: Best Year Yet for Your Business?

Facing what may well be another tough year, company owners and managers will be well aware that many of the external challenges will be beyond their control.

Fortunately, what remains under your control is how this new year is approached and starting 2024 with a thorough understanding of the three metrics below will ensure that this could be the best year yet for your business –

1. The business’ past performance,
2. Its current status, and
3. Its mission for the new year.

You don’t need an MBA or special knowledge to assess the company’s past performance, to understand the present situation, or to plan for the year ahead. Just schedule some time with your accountant, take inventory of what’s truly going on in your business and decide how to make 2024 your best year yet.

Assessing the past

An assessment of the company’s performance over previous years provides invaluable information about what is working and what needs to be changed.

A relatively quick and easy way of assessing the past performance is looking at the business accounts and financial reports.

• For example, your profit and loss (P&L) statement, or income statement, will reveal reasons for periods when net losses were recorded (for example, slow business periods or extraordinary expenses) as well as raise red flags where expenses regularly exceed income.
• A balance sheet summarises total assets and total liabilities, showing the company’s financial position and measuring liquidity or ability to pay short-term liabilities.
• Summarising expected cash inflows and outflows over a period, a cashflow report reveals where the most cash is generated and used; highlights potential cash flow problems and enables informed budgeting and spending decisions.
• Regular debtors’ reports enable proactive management of current and overdue invoices to improve cashflow. Similarly, budget vs actual spend reports compare actual spending to the amounts budgeted for the period, to reveal areas over or under budget and to flag problem areas.

Determine where the business is now

Review the business operations, successes and challenges, and the reasons for missed targets, whether simply drawing on paper or using special software. Understand the company’s current capacity for production and its performance – how many targets met, on target and/or overdue. This enables current strategies, practices and operations to be evaluated, and to pinpoint what is working or not.

Also look at customer satisfaction and retention rates, as well as employee satisfaction, both of which can be assessed through electronic surveys or simply speaking to clients and staff.

Planning ahead

Building on what’s working and realising that doing things differently is the only way to achieve different results, you can choose the goals that will create the future of your business.

Specific, Measurable, Achievable, Relevant and Time bound goals – or SMART goals – focus your team’s efforts and increase the chances of successfully achieving the targets, particularly if these are supported by step-by-step plans, a budget for the required resources, accountability assigned to specific people, and ongoing reviews to track progress.

SMART goals are crucial for achieving success, as they provide a clear focus, specific targets to work towards and motivation for the entire team.

Assistance is at hand

Your accountant will be able to assist you with the financial reports that will allow you to assess the past and present, with advice in respect of tracking non-financial metrics, and with planning for the year ahead – so remember: help is at hand to ensure you approach 2024 with clarity and a solid plan to make it your company’s best year yet.