Setting a destination for your business is critical
OPINION: Many business people I consult with on the Fraser Coast don't have a clear destination in mind for their business or even their own lives.
Very few of us go on a holiday without at least knowing the destination.
A target destination is critically important as it aids direction.
Without direction you don't know if your daily decisions are helping or hindering your progress towards your destination.
With the financial year ending, there has never been a better time to review your direction over the last 12 months and set your direction for the next 12 months.
With changing rules and a constantly changing business environment it is important to ensure you take into account these externalities and their combined effects on your progress towards your destination.
Externalities such as the changing preservation age for superannuation, changing tax rates and changing pension age all affect what we need to achieve and the timeframes towards achieving them.
If you don't have a destination in mind yet, a good place to start is pick a timeframe between five and 10 years and place a target sale price on your business.
It does not matter whether you never intend to sell the business at this stage, but by placing a value on it, you create a target destination.
Next, envision what your business needs to look like to be worth the figure you have chosen.
Now you have your destination and a clear vision of what your business will look like, the next step is to compare the difference between your business today and the vision you have created.
Write down these differences and break them down into categories. Lastly work out the actions needed to fill the gap and this will form the basis for your action plan (or roadmap) to guide you to your destination.
Some people do find this to be a difficult exercise and if you are one of these then it could be worthwhile seeking the help of an adviser. We often do this when planning a holiday, yet we tend to resist this in planning our own future.
Setting your destination and direction form the cornerstone of business planning, there is much more to forming a complete plan, but if you achieve this, along with a set of actions to guide you, your chances of achieving what you desire from your business is greatly enhanced.
Adam Vieglais is a USQ lecturer and Fraser Coast business owner.