It’s not just individuals who should take time to reflect and make New Year’s resolutions for the year ahead. Making New Year’s resolutions can be a great way to motivate SME managers and staff alike to make 2018 a memorable, successful year in business. The following article provides a few resolutions that SMEs should consider aiming for in the new year.
Improve Cashflow Management
Cashflow management should always be a top priority for SMEs, but recent research illustrates that it can become problematic if not managed properly. For example, the most recent Scottish Pacific SME Growth Index polled 1200 business owners and showed that cashflow was the top concern keeping them up at night.
The new year is a great time to start afresh, and a great resolution for SMEs would be to focus on improving cashflow management.
While many small business owners tend to focus more on exciting business ideas with entrepreneurial potential, they can sometimes neglect the “boring stuff” involved with cashflow management and systems improvement.
Make sure you don’t lose sight of what’s important this new year, and consider it a fresh start. This is an opportune time to do the financial housekeeping and put more robust systems in place.
Take some time to improve your invoicing processes, to reduce the potential for disputes and improve on late payment rates. It may only take a couple of minor adjustments to really speed up the collection cycle, bringing more cash into your business.
Regularly Review Finances
Another take-away from the Scottish Pacific SME Growth Index is that a large proportion of SME business owners do not regularly review their finances. The survey found that a mere 4.8 per cent actively review credit facilities that best fit their business, and a significant 50 per cent never get around to reviewing their primary banking relationship.
Failing to do so can wreak havoc for a small business financially, so another worth-while resolution for the year would be to regularly review finances. It’s a great time to really consider what working capital options are best for the business, and what will enable it to grow with peace of mind.
Take a Break
Running a small business can be hard work, especially when you are just starting out. The most recent Scottish Pacific SME Growth Index found that almost 90 per cent of SME owners work more than 50 hours a week in their business, with 43.7 per cent toiling for 60 to 80 hours.
At this time of the year, it’s worth making time for a mental health check and making resolutions that work on an individual level to help small business owners achieve a better work/life balance. Allowing employees to take time off too, will improve morale in the workplace.
This means not only allowing time off to refresh for the year ahead, but building into the weekly calendar non-work meetings, events or activities that give you and staff members a break, so that you have more energy in the time you do spend in the business.
Article by Melanie Chan in collaboration with our team of Unleashed Software inventory and business specialists. Melanie has been writing about inventory management for the past three years. When not writing about inventory management, you can find her eating her way through Auckland.