The last 18 months have proven how quickly our world can change. Since Covid-19 began we’ve locked down, moved out of the office and maintained this thing called ‘social distancing.’ However, Covid-19 isn’t our first foray into paradigm shifting. For the last few decades, the world has been changing at an exponential rate.
This can make it difficult to plan and prepare for the future because so much is unclear. What’s going to impact us and our businesses? It’s scary to try to financially plan for your business, when it’s hard to keep up with the rate of change.
Being prepared can be a series of small tasks building towards a better tomorrow. So here are our top tips for preparing your finances for change.
Inventory management
Keeping your parts inventory to the necessities reduces the outlay required for a large amount of stock and allows you to change your inventory easily. Explore your Preferred Supplier options and find ones with great delivery options, allowing you to be lean with the parts you keep in stock.
Inventory management also helps reduce the number of unused parts you keep in your workshop. We all know the ones: the parts we anticipated using but the job never came to fruition, or a superior part became available and now we have a corner of outdated parts we aren’t sure we will ever use.
Keep your parts inventory to just what you need and it will reduce the financial burden a large inventory requires. (It may also make the parts you do have in your workshop easier to find!)
Keep up to date
Everywhere we look there is something new, whether it be in cars, your smartphone or your staff. No matter where you look, you can probably point to something that wasn’t there last year.
It’s important to try to keep up with what’s changing, even if you only have a summary. Having a general idea of what may be arriving soon will highlight your opportunities and where you need to prepare. Knowing what you may need to invest in for the near future will allow you to start financially planning for it today.
Keeping up to date on new technology will also show where you can upskill your staff. Whether on the tools or on the books, keeping your staff up to date not only helps them complete tasks quicker, but it also means you can start working on your business rather than in it.
Working on your business means you can start preparing for the future and planning how you are going to structure your finances to thrive.
If you aren’t sure where to start, have a chat with your accountant. They can often recommend a financial advisor who can help with planning for the future. You can also check out the Purple Pages for financial advisors in your zone if you would like to chat to someone with automotive experience.
Fine-tune your processes
Most financial management software or accounting suites have a range of add-ons or plug-ins that can help make getting the paperwork done easier. Make sure to investigate which ones could work for you and start upskilling your staff to use them. This gives you and your staff time to spend on the tasks which add the most value to your business.
If you’re looking for extra flexibility with your cash flow, don’t be scared to investigate your payment options with different business partners. For example, you could organise to pay some business bills weekly or fortnightly, spreading out the cost and making month end a little smoother. Lots of companies have a range of options, so don’t feel shy to ask for a payment solution which works for you.
Spend some of that extra time you now have getting comfortable with your Profit and Loss (P&L) or Income Statement. Your P&L can tell you a lot about the health of your business and where you may need to adjust your approach. However, it can take some time to understand, so don’t forget to contact your accountant or financial advisor if you need help.
Keep business purchases as efficient as possible by putting as many purchases as possible through your Capricorn Trade Account. Not only do you get Capricorn Bonus Points, but you save administration time with everything appearing on one statement. To see what else you can put on your trade account, check out the Purple Pages for everything from trailer parts to financial advisors to solar panels. If it’s in your business, it’s in the Purple Pages.
Plan ahead
Some events come around every year, no matter how much we wish time would slow down. Events like tax time and Christmas happen at the same time every year, so factor them into your planning. If you know you are going to be slower over the Christmas period, or your tax will be due in July, make sure to consider this when planning.
If you know you’re going to need to invest in new equipment, make sure to start early. You can contact Capricorn Finance well before your purchase to find out what you’re eligible to borrow and whether you can be pre-approved. Then you know where you stand before exploring your equipment options.
Capricorn Members have easy access to a range of stress-free finance options to help their business grow. We’re committed to putting our Members first, which is why we strive to simplify the process of investing in new capital equipment.
Visit capricorn.coop/equipment-finance for more information.
This article does not, nor is it intended to, constitute legal, financial or other independent professional advice. Please consult your professional adviser before relying on any information contained herein.
AU: Capricorn Finance offers business equipment finance through Capricorn Society Limited (ACN 008 347 313) and brokers business finance through Capricorn Society Financial Services Pty Ltd (ACN 129 134 667). Fees and charges, terms and conditions, and lending criteria apply.
NZ: Capricorn Finance offers business equipment finance through Capricorn Society Limited (NZBN 9429038593185). Fees & charges, terms & conditions and lending criteria apply.
