4 out of 5 businesses started today will not be around in 5 years’ time. Of those that survive, only 1 in 5 will survive the following 5 years.
You only have 3 ways to grow your business:
- Increase the number of your clients
- Increase the amount of units your clients buy from you
- Increase the frequency at which your clients buy from you
Peter F. Drucker, renowned business guru, says a business is designed to do one thing only: to create customers through innovation; and marketing. Everything else will be an expense. He adds:
“Marketing is the distinguishing, unique function of the business. A business is set apart from all other human organisations by the fact that it markets a product or service… Any organisation that fulfils itself through marketing a product or a service is a business. Any organisation in which marketing is either absent or incidental is not a business and should never be managed as if it were one”.
Before You Begin
If you are not careful, it is easy for your personal financial goals and your business goals to conflict. For example, your personal financial plans might include maximising the income stream from your business so that you can make the largest possible investment in a superannuation fund, but one of your business goals might be to re-invest as much profit as possible in the development of new products or services, new premises or new technology.
In order to avoid such conflicts, it is a good idea when developing your business plan to begin by drawing up a list of your personal financial objectives. Then as you begin to formulate your business goals, you can weigh them against your personal goals and make appropriate adjustments to ensure that you have a coherent overall strategy.
A Word About Tax
Many of the decisions you make about the future of your business will have consequences in terms of tax liabilities or tax benefits, either now or at some time in the future. Although no business decision should be made solely on the strength of tax considerations, you will need to take account of the role tax will play in implementing your strategies.
This is an area in which Venables & Co have considerable expertise. Just as you will need to monitor and update your plans to take account of changing circumstances, so we can help you keep up-to-date with changes in tax legislation and adjust your business plan accordingly.
Business Life Cycle
Every business has its own life cycle, and tax and financial planning is important at every stage in that cycle. Whether your business is new, expanding, or mature, whether you are just starting your first business or approaching retirement, it is important that you make well-informed decisions to ensure that you are following the best strategies for achieving your goals.
As you read this summary we hope you will find new ideas and helpful guidelines for setting your business goals and improving your business financial strategies. Complete this business planning checklist to begin to formuate a strategy to move forward.
This summary is designed to help you prepare and implement financial strategies for attaining your business goals, in harmony with your personal financial objectives.
Whatever your business goals – to start a new business, to grow an existing one, to change the direction of a mature business, or to leave an existing business for a new venture or to enjoy a secure retirement – we trust you will find this overview helpful in developing the appropriate financial strategies.