Q1 Actions To Set Your Business Up For Financial Success

Q1 marks the beginning of both the calendar and fiscal year, making it a vital time for ensuring that your business is starting the year on the right track.

It's the time to build a solid foundation for a successful financial year, but with the overwhelm of tasks that have trickled over, new projects kicking off, and new year's goals abound, this key objective often gets lost in the frenzy. Other tasks get prioritised, deadlines get ignored and businesses are left faltering come the end of the year.

To help businesses stay on track and remember what really moves the needle, here are some key Q1 actions that actually set businesses up for financial success in the new year.

Review Performance

Before making any strong movements, businesses need goals to work towards; but before they can set goals, they need to take stock of where they're currently sitting. This is why accurate and thorough reflection on the previous year's performance is so vital; it sets a foundation off which to base goals.

Businesses should be thinking about what targets were met, where numbers fell short and what blockers they encountered along the way. Performance indicators like revenue and customer retention, as well as any challenges the business faced, can paint a clear picture of areas to improve in the coming year.

This is also a good time for businesses to look at customer feedback and sentiment and conduct updated market and competitor analysis.

Following a thorough review, businesses will start to get an idea of areas that need improvement and strategies that should be repeated.

Set Goals Early

Once this foundation has been set, businesses can begin to formulate their goals for the coming year. These goals should be realistic and, ideally, follow a goal-setting system like SMART—which ensures that all goals set are Specific, Measurable, Achievable, Relevant and Time-bound.

Ideally, both long-term and short-term goals will be set at this point. Stretch goals may also be valuable for businesses looking to chase significant growth whilst keeping things realistic.

Having targets that are achievable, measurable and broken down into maintainable sections not only keeps businesses to task, but can help team members incentivised and engaged throughout the year.

By having these goals set beforehand, businesses will have a clear gameplan to approach the year with—though it is important for companies to continually revisit and review these goals to ensure that things remain realistic and aligned.

Optimise Financial Strategies

In addition to larger goals and strategies, Q1 is the time for businesses to consider finance-specific plans and strategies around budgets, cash flow forecasting, tax strategies and ongoing pricing/payments.

Businesses should look for any opportunities for deductions and credits, and financial records should be reviewed and and checked for accuracy. Companies should take this time to analyse the previous period's expense management, profitability and cash flow, and look for any processes that can be automated to cut costs in the future. Major expenses should also be audited.

Review and optimisation is key during this period.

A six to 12-month cash flow forecast can help ensure that key decision-makers have a clear view of the business' sustainability going into the new year and mitigate the chance of any unexpected cash flow issues. It can also offer further guidance as the team updates budgets.

Previous analysis can also be revisited to consider whether pricing needs to be updated based on forecasting and market trends.

Streamline Operations & Optimise Marketing

As businesses prepare for the coming year, efficiency should be front of mind. They should use this time to evaluate current systems, processes, tools and technology. As they do, they should consider where there can be cuts, where there can be improvements and where there can be complete overhauls and introductions.

It's important for teams to remember that some of these fixes may be more costly in the short term but yield long-term benefits.

This is also the time to consider upcoming marketing strategy and think about how to make every action count. Without a regular stream of new leads, all internal optimisation is for naught; it's important to ensure that marketing is being used strategically and is taken into account during the ongoing business audits.

Review Compliance & Risk Management

Laws and regulations are always changing, and running afoul of them can come with an incredibly hefty fine. In order to avoid any legal or regulatory issues down the line, Q1 is a good time for businesses to check in on the status of their legal and regulatory compliance. Reviewing relevant laws and regulations and ensuring that all current business practice and documentation are up to date can save companies from financial—and legal—trouble in the year to come.

Take People Into Account

When businesses review the prior year's performance overall, it's likely that employee performance will come up. Q1 is the time to reflect on that, especially in regards to nurturing company culture; if teams surpassed their targets, leadership should consider how to renumerate that work and how they can incentivise high-performing team to stay. It's important for companies to remember the extreme impact that good teams have on revenue.

A strong team will both save and make more money.

Conversely, it's also the time for businesses to consider if there are any weak spots within the team, and decide accordingly how to deal with those. That can look like reinvestment in training, restructuring of teams, or, in extreme cases, tough conversations about the makeup of staff.

This is also the chance for companies to ensure that, in addition to employee retention, they centre financial awareness in the culture. Booking in company-wide training or team-building days about financial performance and hosting regular financial updates can both encourage financial awareness across teams.

In that same vein, customer relationships should be reviewed at this point; client relationships are the backbone of any business, and should be championed within the company throughout the year.

Consider Hiring a Consultant, Advisor, or Accountant

Many businesses will already have an accountant to handle the broad strokes, but as they set themselves up for future success, it's time to ask whether their accountant is a trusted financial advisor who truly understands the ins and outs of their business.

If the answer is anything other than "Absolutely," then Q1 is the time to consider bringing someone in who does. This can be a consultant, advisor or another accountant. While it may seem like another expense, having an expert on hand who specialises in ensuring financial health can make or break a business.

Start the Year Strong

Keeping in mind these tactics can help businesses start their fiscal year ahead of the curve. Introducing them as a yearly routine can actively change the trajectory of a business, ensuring that cash flow remains optimised and that they are prepared to grow sustainably. All businesses should take advantage of this crucial period to get ahead and keep their business as strong as possible; being proactive can make the difference in not only the coming year, but in the long term financial health of the company.