We’ve just completed Q1 of 2023 – what should you be looking at to review the financial performance of your business? If your bookkeeping is up to date, it’s a great chance to make use of it!
This is a no-brainer – there’s no business without sales. But are you also looking at where the sales came from – referrals / ads / repeat customers? which specific products/services sold well compared to others? and was there anything potential customers were looking for that you couldn’t fulfil at the time? All of these metrics can feed your decision making for Q2 – Q4 rather than just focussing on your Q1 sales figure itself.
Yes you hit (or almost hit) your Q1 sales target, but at what cost? Looking at your costs in conjunction with your sales is essential to understand your profitability. If you set a budget for costs, did the reality match what you predicted? Did some things cost more than anticipated, or did you have you have to spend on certain items you didn’t expect? Most importantly – looking at how Q1 turned out, does your Q2-Q4 plan need adjusted? If you’re new to setting a business budget, you might want to check out our Profit Plan template and mini-course here.
Now is also a great time to review your pipeline for the rest of the year. Have you got spare capacity you need to fill / excess stock to sell and if so, how will you sell this – do you need to allocate additional marketing budget? Or on the flip-side, do you need additional resources or stock to meet demand – and if so, how will you fund this?
Something that you are most likely doing monthly / weekly / daily is reviewing your cash balances and checking people that owe you / people that you owe. The end of a quarter is a good time to reflect on how your cashflow has gone – was it taking longer than you’d like to collect payment from customers? were you stuck for cash at particular points during the quarter? Now is the time to plan how you’ll better manage this for next quarter – can you change your payment terms/methods for example?
If you don’t already have a side pot for your tax bill, now is a good time to look at Q1 profits to see how much you should have set aside so far. Getting into the habit early in the year can ease the pain of a big tax bill later in the year. If you’re not sure how much you should be saving, it’s definitely worth checking in with your accountant. Getting your 2022 tax return done early is also a great way to keep on top of this so you know what you owe long before the deadline to pay it!
If you’re looking for assistance in reviewing and improving the financial performance of your business, you can get in touch with us below.