For many small businesses, this financial year has been a really challenging time.
Earlier in 2020, Australia’s bushland was hit by devastating fires followed closely by the COVID-19 crisis, which saw the world and economy come to an abrupt standstill.
As the world went into lockdown, local businesses were forced to hibernate. Even for those that could continue trading, many had no choice but to reduce staff hours or wages in response to the diminished demand. On top of the economic loss, wIth no vaccine in sight, the future remains uncertain for many small business owners.
The combined impact of these disasters will be felt for years to come, and as the JobKeeper allowance is set to end in September, many small business owners will be asking themselves, how do I stay afloat in the new financial year?
For some, a new financial year is a chance to ‘clean house’ and start anew. While that will look different for everyone, there are some business basics every owner can keep in mind, particularly as this EOFY will be unique against the backdrop of the current economic climate.
Here are six ways to have a strong start to the new financial year:
1. Find your operational pain points, and look for solutions
Small business owners often wear many hats; from accounting to managing payroll, to becoming experts in tax – running a smooth operation is no mean feat.
That’s why it’s important to use the new financial year as a chance to reflect on the business processes that are the most timely and stressful, and seek out solutions. There are endless options of apps, platforms and providers that offer affordable, automated and efficient fixes to the most common pain points faced by small business owners.
For example, if Single Touch Payroll gives you an administrative headache every week, look to accounting software like Xero that automate the report for you. Similarly, if you struggle with cashflow forecasting, websites like Eloquens provide free financial modelling templates from accounting experts.
Take note of the tasks that are slowing you down, do some research to find the best solution for your business, and compare the market. Don’t be afraid to reach out to other small business owners within your community via LinkedIn or Facebook, to ask for advice and first-hand reviews of the tools you’re looking at investing in.
2. Be prepared for anything
The Federal Government plans to end the JobKeeper allowance in September. While that’s a daunting prospect for businesses that are reliant on the subsidy, there’s still time to prepare.
Take a hard look at your cash flow, including overhead costs, wages, assets, cash reserves and debts. Once you’ve established the financial health of your business, start creating a financial plan for various scenarios. For example, if the JobKeeper scheme were to end early, what immediate costs could you cut? Would you ask your staff to reduce hours or wages? These are the tough questions to tackle now.
Expecting the unexpected eliminates some of the stress associated with the unknown. While no one can predict the end of COVID-19, being ready to act is your best chance of business survival.
3. Lead with purpose, but be flexible
Taking decisive action is always better than doing nothing. As a leader, don’t allow yourself to become paralysed by uncertainty. Be empathic, authentic and purposeful in your decision-making by balancing strong leadership with vulnerability. Teams will always appreciate seeing your human side.
With that said, never fear over-communicating with your team. As a leader, it’s your responsibility to set the cadence for support, be that through regular ‘pulse-checks’ like employee mental wellness surveys, or getting your entire workforce together at least once a week for a leadership address, company updates and celebrations.
If you’re continuing to work remotely in the new financial year, start building an online culture of reward and recognition. When teams are working from home, it becomes harder to quickly say ‘thank you’. Creating structures, like a Slack channel dedicated to recognising star performers or investing in the right employee engagement software, will foster connection within your team and boost engagement through value-reinforcement.
Having a strong, connected workforce that looks out for one another enables your business to better handle disruption. You won’t get through the other side of the COVID-19 crisis if you’re operating on auto-pilot – so be prepared to land at multiple destinations with a moment’s notice assured by the knowledge that your team is backing your decisions.
4. Start with your ‘why’
Simon Sinek popularised the idea of finding your ‘why’ back in his 2009 TED Talk on ‘how great leaders inspire action’. The concept is still relevant today for many business leaders striving for innovation, growth and customer or employee loyalty.
Defining your ‘why’ is about finding the purpose, cause or belief that drives you. No matter how small your business is, every leader needs to tap into their purpose. By leading with your why, it’ll help drive every decision you make and will keep long-term goals aligned to your business’ growth.
5. Develop a BHAG
I’m a big believer in the ‘Big, Hairy, Audacious Goal’ – otherwise known as a BHAG. This term describes a long-term ambition built from your company’s core values and purpose that you plan to achieve within the next 10 to 25 years. Your BHAG should also align back to your ‘why’.
A BHAG must be visionary, challenging and daring. It needs to be measurable and grounded in your company’s underlying strategy to be relevant. Examples include; expanding to three international markets, doubling the size of your team or becoming the leader in every market that you serve.
Your BHAG will be your driving force; it will impact the types of people you recruit now and in the future, and will align your team to a greater purpose.
The start of a new financial year is the perfect opportunity to think big, reassess your business’ ambitions and start making positive changes that align with your unique BHAG.
6. Use a goal-setting framework
Now you’ve got your ‘why’ and your BHAG defined, how do you break down this driving force into actionable steps? Leading with purpose is great, but true success comes down to having a clear goal-setting framework. I’ve found that Objectives and Key Results (OKRs) work best for my team; and with the likes of Google, Linkedin and Atlassian using this framework, we’re in good company.
Businesses use OKRs to align their teams to one strong goal, using key results to measure progress in achieving that objective. Essentially, OKRs take on a more holistic approach to accountable goal setting by tracking qualitative outcomes – often quarterly – rather than quantitative KPI metrics.
Defining your ‘why’ with OKRs helps business leaders:
Streamline staff to an overarching vision, no matter how ‘blue-sky’ the objective is;
Create a transparent company vision for the future;
Boost employee engagement by empowering individual responsibility and accountability, and;
Provide a clear, structured snapshot of accomplishments and progress.