As the End of Financial Year looms in Australia, we get ready to begin the whole cycle again. What will be different about your business in FY2025?
As our Aussie End of Financial Year (EOFY) looms closer, finishing 2024 strong is a weight on many founders and leadership teams I speak with this month. Head down and racing towards revenue or earnings goals.
It’s been another challenging year to say the least. Belt-tightening and caution being the key phrase for many. While some may be dipping into cash reserves, Accountants, administrators and M&A advisors on the other hand are booming!
The good news is making it through 2024 equates greater resilience for those who have sustained and even grown their business.
Scaling Up methods and frameworks reman important as ever, especially during times like these. The principles of less is more (focus), differentiation, becoming better and better at delivering on customer brand promises and doing things faster, better and more efficiently than competitors would have helped those using Scaling Up as a growth methodology in 2024.
As we close in on the EOFY, we will inevitably turn our leadership team’s focus to 2025.
So what will be different about your business next year?
How will it be fundamentally “stronger” versus this year and years gone by?
Building a strong readiness and position for growth goes beyond this year’s revenue or profit target achievement.
Here a few ways you can think about building longer-term capabilities, stronger competitive position and make it easier to end next year achieve the business growth goals.
A stronger Balance Sheet
It’s no secret that it’s game over if we run out of cash. Money matters.
It provides optionality to seize opportunities we don’t plan for, to pay our best people better and to act as a safety net during down cycles in demand and seasonality.
Improving cashflow cycles improves our working capital and strengthens our cashflow and balance sheet. Which in turn makes it more achievable to invest in future growth strategies or seize opportunities e.g. strategic acquisition or expanding into a new geographic market.
While sales helps us get there, we all know that ;
Revenue is Vanity, Profit Sanity and Cash is Queen!
While we have several levers we can pull to improve profit, we have even more levers that can influence cash.
And in our race to accelerate customer volume or revenue, we may take our eye off the cashcard and the activities that can influence our cashflow.
Examples of cash cycle acceleration activities might be:
Onboarding new clients faster
Accelerating project delivery of services
Upfront component for project-based invoicing
Quicker cash collections & late fees
Take a look at what’s changed this year versus last year -
Are you paying people, completing projects, billing and collecting cash from customers faster of slower?
Measure it. Then brainstorm strategies to make it work in your favour.
A stronger Strategy
Being laser focussed on execution is important. We all want to win in front of customers and be worthy of their advocacy, love and loyalty. This makes our flywheel spin faster.
Yet spending too much time in the weeds without the bigger picture makes growth that much harder and longer to achieve.
Over-reliance on financial goals and short-term wins, without a long-range view of where are we going and why your team and customers should follow you there is less compelling for many stakeholders important to your business.
Improvements in the size and scale of our impact, business growth and valuation is just the sum of all decisions we make.
And we want to make decisions that are orders of magnitude more impactful.
Balancing the Short versus Long Tearm
‘Short-termism’ afflicted the many now defunct businesses (Blockbuster rings a bell) So get everyone's head out the weeds regularly and consider what’s different in the world, in your industry, in your customer’s circumstances and innovate and change.
The end of the FY and beginning of the next is a perfect time to review, re-set and realign Strategy.
Here are a few activities you can undertake:
Run a SWT – Strength, Weakness and TRENDS exercises. The analysis of this will generate opportunities to address risks and drive future growth.
Set a compelling long-range goal that goes beyond Financials and that is compelling to everyone in the business (not just the shareholders).
Superpower Gap Analysis. What Superpowers are you are building? What capabilities must you get better at? What Superman strength or spidy-like sense do you need in order to achieve your long-range goals?
More adaptable to change
The outside world is uncertain. The impact of movements in competition, market dynamics, regulation, economic conditions, consumer trends and preferences, political environments, not to mention technology (again) all contribute headwinds and tailwinds business.
What worked and provided a return on investment last decade (facebook ads!) may be just less so now.
Change is necessary to scale a business. What gets in the way are complexity and inertia. Change can also act as an accelerator, a headwind that helps us leap frog (Think how AI is affecting the tech giants leaderboard right now).
Gather your leadership for a Strategic Planning session ahead of FY2025. The session includes a review the current strategy, internal organisation and capabilities and external environment.
More Aligned and Inspired to achieve the Long-term
What are your Key Initiatives that elevate your business to a stronger position over the next year?
By discussing and aligning this together as part of an Annual Strategic Planning agenda or even frequent quarterly or monthly strategy reviews, you will get better decision-making and a team more motivated and committed to the outcomes and plans.
The process is AS important as the content.
And a facilitator or coach can help provide the right frameworks, ask the right questions and help you prepare the right agenda to focus the discussion on what matters to your business growing.
If you would like some sample agendas or help facilitating prep for your FY2025 Strategic Planning session, please reach out to me claire@madeforscale.net
Happy to help point you in the right direction or facilitate your FY2025 session on your behalf.
Smooth Scaling!
Claire
Founder & Couch
p.s Our highly-rated Small Group Scaling Up Acceleration Workshop for Leadership Teams in Sydney coming up in August 6-7 where we will be reviewing Strategy and setting Long-term, Annual and quarterly plans. Click below for details.
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