Strategies for 2024

As we near the end of another year, it is a great time to start thinking about your ‘Strategies’ and how you will ‘implement’ your strategies in 2024.

Let’s start with these questions…

• How is your business going?
• Are you happy with the profit?
• Are you happy with your ‘Cash Flow’?
• Are you happy with your “Current Position” – is it where you wanted to be?
• What do you want your ‘business to look like’ at the end of 2024 or even 2027?
• Are you ‘dispensable’? (Have you ever had four weeks leave since you started your business?)
• Do you have a ‘Business Plan’? Is it realistic?
• Do you have ‘Budgets, Cash Flow Forecasts and Projected Balance Sheets’?
• Are you happy with the ‘Balance Sheet Position’ as projected for 2027?
• Do you want to undertake ‘Research and Development’ projects but don’t understand the system that is required to claim the income tax rebate?
• Have you explored whether you might be eligible for a ‘Government Grant’, in particular, the new ‘Industry Growth Program’?
• Are you wanting to ‘expand your business’? How much is that going to cost?
• Do you need ‘extra funding in your business’? Where you will get these funds from?
• Are you curious about how some of your ‘competitors are able to raise capital’ from the public, but you don’t know much about the capital raising opportunities that SME companies have?
• Have you ‘discussed all of these with your accountant’, but have not got answers because your accountant is very busy with Income Tax Returns?
• “We don’t prepare Income Tax Returns, we concentrate on these other commercial matters, which affect SME businesses all over Australia.”
• Are you happy with your current position? If your answer is yes, that’s great!

If not, NOW is the time to do something about developing and implementing WINNING STRATEGIES for your business. 2024 will be a tough year.

Innovation is very important for all businesses, however it is also important that it is planned, researched and that funding is available.

Many SMEs set out with a vision to develop a product, process, service or some other business activity. Unfortunately, some people have not considered the entire process in their initial thinking.  An appropriate terminology for the process is ‘The Innovation Journey’.

The innovation journey requires planning.

The innovation journey does require planning, an understanding of the time that it will take and the documentation that will be required much of which will need to be provided by an external expert.

The innovation journey normally starts with Research and Development.

To claim the Research and Development Tax Offset, the applicant must be a company.

Government grants are great way to receive assistance without too many strings attached.  That is, rarely does a government grant impose any type of ownership being transferred to a Government agency.

Business Plans are important.  In fact, a Business Plan is just as important for a business person as a map is for a tourist – if you don’t know where you are going, how are you going to know when you get there?  More importantly, how will you know when you are off track on your overall strategy?

Predictive Accounting Reports are the financial reflection of what is contained within the Business Plan. This is very important and relates to Budgets, Cash Flow Forecasts and Projected Balance Sheets.

Funding for the business is an ongoing issue.  Do you borrow money?  If so, do you have security that you can offer the lender or do you attempt to raise capital?  There are now three ways that private companies are able to raise capital direct from the public.

The ‘Industry Growth Program’ that was announced last week could be a great source of grant funds for eligible companies that are operating in the priority areas established by the National Reconstruction Fund:

• Value-add in resources
• Value-add in agriculture, forestry and fisheries
• Transport
• Medical science
• Renewables and low emission technologies
• Defence capability
• Enabling capabilities

Businesses across every sector are facing increasing regulatory landscape of environmental, social and governance (ESG).

The term ESG is used for measures to assess the sustainability and ethical impact of the business, and helps businesses manage risk.

For SMEs, the key components at this stage is corporate governance.

Being aware of corporate governance issues is essential for Australian companies and can include:

• Awareness of regulatory requirements – keeping up to date with the company’s legal and regulatory requirements ensures that the company remains compliant and avoids potential fines and other legal consequences and embarrassment.
• Risk management – companies need to adopt sustainable and responsible practices to mitigate financial, reputational and legal risks by addressing potential issues before they become problems.
• Consumer demand – SMEs also need an awareness of consumer preferences as many people are becoming more conscious of the environmental, social and ethical impacts of their purchases and the businesses that they are dealing with.

Managing a business is a lonely affair, and many business operators have found that they can benefit from forming a Board of Advice which would meet throughout the year, to give advice to the Directors and Leadership Team on various issues.

It should be noted that the Advisory Board is only there to give advice and that the final decision on every matter needs to be made by the Directors.

Board of Advice members are normally drawn from variable industry/professional backgrounds, so that the Directors are receiving advice from different viewpoints – be it accounting, legal, medical, marketing, sales, engineering, CEO experience, and so on.

2024 is shaping up to be a very difficult year because of inflation, high interest rates, staff hiring difficulties, supply chain difficulties particularly for products coming from overseas.

The articles that we have selected for you today review some of the key issues relating to managing SME businesses:

• Are you happy with your business?
• Do you need more corporate input?
• If you are undertaking an “innovation journey” have you prepared the supporting documentation?
• Are you obtaining valuable corporate input to your decision-making? Would you benefit by having a Board of Advice to help you navigate 2024?

NOW is the time to implement strategies to meet these challenges in 2024!

Operating a business is a challenge at any time but 2024 is lining up strong challenges for business operators.

If you would like to have a discussion about implementing some changes Towers Business Development can assist – if you would like a discussion please send an email: peter@towers business.com.au or Telephone 1800 232 088