1. Review of the Past Financial Year

• Revenue and Profit Analysis: Compare your revenue (how much you earn) and profits (How much the business keeps) against your goals and previous year’s figures. Identify trends and irregularities.
• Expense Review: Analyse your expenses to see where you can cut costs or reallocate funds more effectively.
• Cash Flow Management: Review your cash flow statements to understand your liquidity and plan for future cash needs.

• Campaign Effectiveness: Evaluate the success of your marketing campaigns. Which strategies yielded the best ROI?
• Customer Acquisition and Retention: Analyse customer acquisition costs and retention rates. Identify your most and least effective channels. Networking, Word of mouth, referrals, social media, events etc
• Content Performance: Review the performance of your content across various platforms. Which types of content resonated most with your audience?

• System and Process Evaluation: Assess the effectiveness of your current systems and processes. Where can you streamline or automate?
• Team Performance: Review your team’s performance. Identify skill gaps and areas for improvement.

2. Planning for the Upcoming Financial Year

• Revenue Targets: Set realistic revenue targets based on past performance and market conditions.
• Budgeting: Create a detailed budget that aligns with your revenue targets and includes all projected expenses.
• Investment Planning: Plan for investments in marketing, technology, and personnel that will drive growth.

• Strategic Objectives: Define your marketing goals for the year. These could include increasing brand awareness, improving customer engagement, or launching new products.
• Campaign Planning: Develop a detailed marketing calendar outlining key campaigns, content themes, and promotional activities.
• Channel Optimization: Decide which marketing channels to focus on based on past performance and new opportunities.

• Process Enhancements: Identify and implement process improvements to enhance efficiency and productivity.
• Skill Development: Plan for training and development to address skill gaps in your team.
• Technology Upgrades: Invest in new technologies that can streamline operations and improve customer experience.

3. Financial Fundamentals to Be Aware Of

1. Financial Statements

• Income Statement: Understand your revenues, expenses, and profits.
• Balance Sheet: Know your assets, liabilities, and equity.
• Cash Flow Statement: Track your cash inflows and outflows tomanage liquidity.

• Tax Obligations: Be aware of your tax obligations and deadlines.
• Plan for tax payments to avoid penalties.
• Deductions and Credits: Identify all available deductions and credits to minimise your tax liability.

• Profitability Ratios: Assess your business’s profitability (e.g., gross margin, net profit margin).
• Liquidity Ratios: Evaluate your ability to meet short-term obligations (e.g., current ratio, quick ratio).
• Efficiency Ratios: Measure how effectively you utilize assets (e.g., inventory turnover, receivables turnover).

4. Profit First Method

• Income Account: All revenue is deposited into this account.
• Profit Account: A portion of income is transferred here to ensure profit is reserved.
• Owner’s Compensation Account: A portion is allocated for the owner’s salary.
• Tax Account: Funds are set aside for taxes to avoid last- minute scrambling.
• Operating Expenses Account: The remaining funds are used for daily business expenses.

• Profit: 5%
• Owner’s Compensation: 50%
• Tax: 15%
• Operating Expenses: 30%

• On a regular schedule (e.g., bi-weekly or monthly), transfer the designated percentages from the Income Account to the respective accounts.

• As your business grows and becomes more profitable, gradually adjust the percentages to increase profit and owner’s compensation while managing expenses effectively.

• Profit Account: $500 (5%)
• Owner’s Compensation Account: $5,000 (50%)
• Tax Account: $1,500 (15%)
• Operating Expenses Account: $3,000 (30%)

• Ensures Profitability: By prioritising profit, businesses can avoid the common pitfall of having little to no profit left after covering expenses.
• Disciplined Spending: Forces the business to operate within its means, promoting lean and efficient operations.
• Financial Clarity: Provides a clear and simple framework for managing cash flow, reducing financial stress.