When the New Year dawns, you need to do more than make a few obligatory resolutions and be done with it.
Especially if you want this year to be a successful one for your business.
The New Year is a great opportunity to rethink the way you manage your money.
Whether your goals include saving more, investing wisely, or simply taking better control of your finances, 2025 offers a fresh opportunity to embrace a financially empowered future.
So, what are the first steps to achieve this?
Keep reading to find out.
Set Clear Goals
The new year is famous for goalsetting fever. The resolutions all come out in force. But, a lot of the time, those resolutions become cursory gestures or things you feel you should be doing. Scratch these kinds of goals, they rarely get achieved and don’t drive you to do better.
It’s time to set some realistic goals that will help you achieve your 2025 objectives.
Financial success starts with clarity. So, when you are setting your goals, think about the answers to these types of questions: What do you want to achieve in 2025? Are you planning to expand your business, reduce debt, or build a stronger cash reserve?
You can then set goals that support your financial plan. Make sure you take the time to break each goal into manageable milestones, prioritise them based on their urgency and the impact they will have, and then regularly review your progress, making tweaks if necessary.
It can be really helpful to undertake the goalsetting process with your accountant or financial adviser. This way they can give you impartial advice and help you to select the correct focus drawing from the information contained in your financial records. Throughout the year, your accountant can keep you on track with your achievement progress and provide practical advice to support your success.
Cashflow Forecasts And Financial Projections
Cashflow is the lifeblood of any business. Without a clear understanding of where your money is going and when it’s coming in, financial stress can quickly pile up. You can prevent that from happening by creating a cashflow forecast and setting realistic financial projections.
Why you need a Cashflow Forecast:
- Better Financial Planning: Predicting your incoming and outgoing funds will help you plan for future expenses or investments.
- Informed Decisions: When you understand your financial position, you can make informed decisions about key actions like spending, borrowing, or expanding your business.
- Reduced Risk: Forecasting allows you to identify the potential for shortfalls and provides you time to take corrective actions like cost-cutting or securing funding.
- Positioned For Growth: When you have a clear understanding of your cash position, you can assess whether it is advantageous to take growth opportunities like purchasing new equipment, hiring team members, or expanding your services.
- Reduced Stress: Seasonal fluctuations are common in many industries, preparing for unexpected expenses, or slow periods now can reduce financial stress and improve your peace of mind.
Why you need Realistic Financial Projections:
- Data-Backed Decisions: Realistic projections give you a clear picture of your expected financial performance, which allows you to make data-driven decisions. These can be big or small decisions including potential investments, cost-cutting measures, or scaling operations.
- Goal Achievement: We’ve spoken about the importance of setting goals for 2025 and when you have a projection aligned with an achievable target, it helps you set and meet realistic financial goals. This is great as it ensures steady progress without overestimating or underestimating your capabilities.
- Risk Management: By anticipating potential shortfalls or challenges, financial projections allow you to develop contingency plans, minimising the impact of the unexpected.
- Resource Allocation: Every business needs to allocate its resources effectively, whether budgeting for payroll, marketing, or operational improvements. A clear understanding of your finances helps you achieve this.
- Growth Focus: Knowing you have a practical and achievable financial plan can reduce any anxiety associated with business uncertainty, enabling you to focus on growth and innovation.
How to start on these Projections:
- Analyse your historical data to check performance and predict future trends
- Identify any seasonal fluctuations your business experiences so you can plan for slow periods
- Run cashflow reports to get an idea of your incomings and outgoings
- Use all the tools at your disposal like your accountant’s knowledge and your accounting software to ensure you are working with accurate information.
Why You Need A Plan In Place For 2025
Time has a habit of marching forward, it waits for no one. So, if you don’t get a plan in place for the year ahead, you may find you reach December without making much progress towards your goals.
A solid financial plan is like a compass. It guides you toward an intended destination while helping you navigate any challenges that may arise. Having a well-thought-out financial plan ensures you stay prepared for anything – that could be unexpected expenses, market changes, or growth opportunities.
So, how do you build this plan?
Steps to take:
- Review: Look back on the year that was to identify trends or potential areas for improvement and growth
- Income and Expenses: List all your expected revenue streams along with fixed and variable expenses. This gives you a clear understanding of your financial baseline.
- Set Financial Priorities: Identify your key objectives for the year and allocate resources accordingly. Those objectives could be things like reducing debt, saving for expansion, changing direction or increasing profitability.
- Risk Assessment: Consider any potential risks your business may face, such as market downturns or unexpected expenses. Then, develop backup plans to manage these scenarios effectively.
- Cashflow and Projections: Use the information you gathered from your cashflow forecasts and financial projections and incorporate them into your wider business plan.
- Monthly Reflection: Regularly review your plan against actual performance. This ensures you are staying on track and can adjust as needed to respond to changes in your business environment.
Planning ahead reduces stress, allowing you to focus on growing your business and achieving those financial goals. But, creating and sticking to a financial plan can feel overwhelming. That’s where an experienced accountant or financial adviser can offer valuable insights, identify areas for improvement, and ensure your plan is both realistic and ambitious.
Your Financial Transformation Awaits
Ready to embrace a fresh perspective on your finances? Partnering with a financial expert ensures you’re not just planning for 2025 but building a strong foundation for years to come.
This year, don’t just make resolutions—take action. With clear goals, a robust financial plan, and the right support, you can make 2025 your most successful year yet.
And we will be there to help you through it all. Here at Cadenze, we want to ensure that 2025 is the year to make your finances thrive. Let’s chat about taking your first step towards a standout year.