Mastering the Art of Working 'On' Your Business

As a business owner, you’ve likely encountered the advice to work 'on' your business, not just 'in' it. But what does that really mean? Understanding this distinction is crucial, especially when it comes to business accounting and operations - refining this approach can significantly enhance your business numbers and operations.

Understanding the Difference: Working 'On' vs. 'In' Your Business

Working ‘On’ Your Business (Planning):

- Creating and updating your business plan.

- Preparing a budget or financial forecast.

- Identifying potential risks and strategising to mitigate them.

- Structuring and resourcing your business effectively.

- Monitoring overall performance and devising improvement strategies.

- Deciding on the best financing options.

- Reporting and communicating with owners.

Working ‘In’ Your Business (Implementation):

- Implementing your business plan.

- Tracking actual results against your budget or forecast.

- Executing risk mitigation strategies.

- Hiring and managing your team or contractors.

- Putting performance improvement ideas into action.

- Arranging necessary financing.

- Communicating with your team and clients.

Based on the above, here are our top five activities for effective business management

1. Annual Business Plan Preparation - Develop and update your business plan annually, ideally at the end of your financial year or the beginning of the new one.

2. Budget and Forecast Creation - alongside your business plan, prepare a budget and forecast for the upcoming year and review it annually.

3. Monthly Reporting - regularly compare your actual performance against your plan and budget.

4. Effective Communication - ensure your plan and results are communicated clearly to both the owners and your team.

5. Monthly Review Meetings - dedicate 1-2 hours each month to review progress, financials, business structure, and identify any risks or opportunities for improvement.

Time Commitment for Working ‘On’ Your Business

Effectively working 'on' your business doesn't require a full-time effort. A structured approach includes:

- Weekly: 1-2 hours.

- Monthly: Half a day for reviewing information and meetings.

- Annually: 1-2 days off-site for updating your plan and business structure.

The value of external support

Incorporating an independent advisor can be incredibly beneficial. They provide an objective perspective and help establish regular, disciplined practices, ensuring accountability and continuous improvement.

How we can help

As your local Nelson accountants and business advisors, we specialise in small business accounting and provide expert advice tailored to your needs. Our team of experienced Nelson accountants can help you develop robust plans, manage your finances effectively, and ensure your business is structured for success.

Contact us today at letstalk@mmca.co.nz to learn how we can help you work 'on' your business, ensuring it serves you, not the other way around.