In today's feature article, we discuss the best End of Financial Year growth ideas and initiatives to end this financial year on a high!
At a glance
April – June is a wonderful time to consider:
any initiatives to implement prior to financial year end to make this tax year a huge
whether there are any initiatives you could test which, if successful, could be made permanent in future years
It is also a great time to reflect on what opportunities exist for your business in the new financial year and how you will set yourself up to capitalise on those opportunities
Just don’t leave it too late in the financial year as often you often need time to implement
Tips
Consider implementing or testing opportunities in a “lean” way to minimise risk and resources
Be clear about what your current “core” offerings are and how they can be strategically extended.
Whatever you bring forward, make sure it is a profitable offering or it helps build another critical metric (e.g. new customer acquisition). At the very least, there needs to be some testing and movement along the learning curve
Don’t leave it too late in the financial year – last week of June is often too late!
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Article
You may think that as accountants, we look forward the End of Financial Year (EOFY) because it begins the next cycle of accounting and the chance to dust off our pocket calculators.
WRONG!!
(It’s also not 1990, so we don’t use pocket calculators...though we miss them)
We love this time of the year (April, May & June) because it gives our clients an opportunity to end the year on a high by going big with a new offering, a promotion or bringing forward revenues and profits (e.g. by encouraging their own customers and clients with incentives and promotions to prepay for products and services).
It also lets them consider initiatives they may have been considering and testing the opportunity in a “lean” way ahead of the new year.
Ending the year on a high
Companies can end the year on a high by strategizing ways to maximise sales in the last remaining weeks of the financial year.
Strategic examples include:
Running an EOFY promotion
Offering a seasonal product or service
Promoting existing profitable products and services
Clearance sales to clear out old stock
Early release promotions
If nothing else, you could even use the last few weeks to check in on clients to make sure they are happy with your offering and to see if they need additional support in the coming new year.
There are literally countless ideas specific to your business which could help potentially help to bring forward revenue and profits.
Getting a head start on next year
The other thing we love about the EOFY is that it allows you to get a headstart on next year or to use the next few weeks to test an initiative which could be rolled out permanently in the next financial year.
Strategic examples include:
Promoting a beta model of a new product or service offering to your existing customers
Expanding promotions out to a new customer segment beyond your current core customer group
Either way, make sure you are strategic about what you do and, if you haven’t yet, make sure you read our article about “Growth Beyond the Core.”
Tip: Target the right audience
Who’s likely to need your business most now?
Some businesses have remaining budget left over to spend before the EOFY, which they need to spend or else they lose it in the next budget (believe us – this exists).
Alternatively, some customers can often be enticed to start spending now because of the end-of-year bonus they may be expecting or because the offer is particularly enticing to them.
It makes sense to think about who your target customer is or could be, and to strategically market your offer to them.
Tip - Know what you can afford to offer
It’s easy to pop a blanket discount on your goods or services to compete in a crowded EOFYS marketplace, but make sure you are well aware of your numbers before you begin offering promotions.
Always monitor your financial metrics and ensure you are being strategic with your initiative (you should always be across your numbers, but feel free to consult with your accountant to make sure your numbers are correct and that your plan is sensible)
But wont this result in more tax?
Yes, these initiatives could potentially result in more tax, but this is not necessarily a bad thing.
Let’s be clear: a Sapphire Bay client never pays a single cent more of tax than they are legally required, and we are always ruthlessly looking for measures to legally decrease our clients’ tax bills.
But we care about NPAT or your after-tax take-home amount just as much as your tax bill because that is what you actually get to use and enjoy.
We want you to be profitable and to take home as much cash as possible.
And let’s not forget there are advantages to posting strong profit figures in your tax return, including:
Increased finance serviceability to potentially make further investments in your business (or buy that new dream home)
Increased business valuations should you be considering selling your business or obtaining investment
Improved financial capacity more generally (wouldn’t it great not to be surviving in your business month-to-month from a cash perspective?)
Strong momentum going into the next financial year and even higher targets to aim for in future years
Plus, it is highly likely, that any successful initiative will further inject a “high” in your business and improve morale.
The Final Word
The run up to the EOFY is an exciting time for any business to think about what it could do to maximise this year’s result and get a head start on next year.
Business owners should look at this time, not as a period of administration, but rather as an opportunity to optimise your operations and explore opportunities to turbocharge your business.
This is your sprint towards the finish line and what more exciting time is there in a race than the final sprint!
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