In our blog below, we provide advice to help you think about your strategy for success in 2023.
Resolve to track your spending
Where does the money go each month? You know about the big regular bills such as rent, employees’ wages, suppliers, tax, telephone and internet, heat and electricity, but for most businesses, budgets never quite seem to add up.
Make sure you list all the little things such as sundries and other smaller expenses into your budget. Look through last year’s accounts to check you have every type of expense included.
Having a budget has become more important than ever. Resolving to stick to a set budget can be vital and could even mean that you have surplus cash left over at the end of each month.
Resolve to deal with debt
One of the most important things to avoid in 2023 might well be debt. Following the Covid-19 government support, debt was easy to get into, but hard to get out of. Remember, debt continues to go on costing money because of monthly interest payments. Any cash surplus you might have could be used to help pay off your debts. Resolve to pay off as much as you can, starting with any variable interest debt you have.
A cash surplus is vital when running a business and by paying off your debts you could quickly start to build an emergency fund. If we have learnt anything from the pandemic and subsequent energy crisis, it is to try and save spare cash.
Reducing your debt could feel as though you have had a cash bonus each month, because you no longer have repayments to make or interest to cover. It may be tempting to splash out, but if you resolve to save instead of spend, it could be the first step towards building resilience against outside influences to your business. In 2023, interest rates are on the up, making a business savings account even more rewarding.
Resolve to make the most of your company pension
Your pension is a special kind of investment, and thanks to the tax relief provided by the government, it could be the most rewarding you ever make. Resolving to make some extra contributions into your pension fund in 2023 could make a big difference to your wealth in the years to come.
Resolve to create a resilient business strategy
We are encouraging all clients to take time to prepare a 2023 Strategic plan and set up your targets for success. If you have a vision of what you want your business to look like when it is “complete” then you are able to drive your business towards the vision and you can monitor how you are doing as you go along.
A plan looks at all the things a business could do and narrows it down to the things it is actually good at doing. A strategic plan also helps you determine where to spend time, resources and money.
Here’s how to create a strategic plan:
- Take time to review your own personal objectives – the business is there to provide you with what you want from life; do not forget this.
- Look at where you are now: your strengths, weaknesses, opportunities and threats, so you have a clear understanding of your position in the marketplace, the competition, your systems, the way you do things, what you are good at, and where you might need some support.
- Focus on where you want to be (say) in 2 years: what you want your business to look like when it is running profitably and successfully. Then you can determine your priorities – the big issues that you need to focus on. This is the strategic plan!
- Write down your vision and define what you must achieve and the actions you need to take.
- Monitor how you are doing each month, noting which actions have been completed and what needs to be done to keep you moving forward.
- Allocate responsibility for taking the actions.
- Review and adjust your regular activities to keep you on track.
Resolve to be flexible with your plans
In 2022, despite the troubles with the economy, we have been amazed at the resilience of our clients and how they have energetically moved their businesses into new areas, products and services. Many of our clients have redesigned delivery and payment systems, moved their entire processes digital, accepted remote working and adopted to new technologies to survive and indeed prosper.
Few predicted the Pandemic or the war in Ukraine and these types of events are outside our control. Who knows what 2023 will bring, so it is a good idea to look at where you are now and plan for a range of scenarios “good and bad” so that you can be flexible about the direction you should take.
LWA are here to help you plan and forecast
As well as accountants and tax experts for our clients, LWA offer a range of business advisory services. We focus on innovative tools that have proved to help our clients navigate through the economic challenges of the past 3 years. Our team has knowledge and access to some great tools to help businesses plan and forecast.
The software we use provides you with an early warning system by pulling through your existing transactions and balances from Xero or QuickBooks Online and analysing the information to provide an accurate forecast and allowing you to test current decisions as well as plan for future ones; Some things that might seem like a no brainer at the time can have a butterfly effect on your finances down the line. For example; when to invest in stocking up your business, when to increase salaries, when to invest last month’s profits.
Contact our inhouse digital accounting experts – Matt Jones and Bradley Allen-McKenna to see how we can help you succeed in 2023. Call us on 0161 905 1801 in Manchester or on 01925 830 830 in Warrington or send an email to mail@lwaltd.com.