As 2023 winds down, we’re inviting small business owners to take a breath. Reflect on the year that was, the lessons learned, and the opportunities that await when the calendar changes to 2024.
Most small business owners would agree that this year wasn’t always smooth sailing. Rogue financial and economic headwinds made it tricky to stick to a budget.
So, if there’s one lesson that small business owners are eager not to repeat, it’s leaving a slim margin for unforeseen challenges.
In this guide to budgeting for the year ahead, we’ll look at:
- The current economic environment
- How to access affordable online business services
- Whether now’s the time to register for GST
- Budgeting for essentials like business name renewal
What are we walking into?
Australia’s cost of living crisis took centre stage for most of 2023. Small business owners in particular felt the pinch as they navigated cost inflations, tighter consumer spending and an ultra-competitive job market.
As we approach the end of another year, it’s time to take stock of your financial situation and set goals for the upcoming year.
With any luck, 2024 will be less “grin and bear it” and more “growth and budget freedom”.
Federal Treasurer Jim Chalmers hinted that the budget due in May could include more cost-of-living relief.
In the meantime, we’ve recently received the Government’s Mid-Year Economic and Fiscal Outlook (MYEFO). The MYEFO is somewhere between a teaser for the May budget and a temperature-check on the nation’s economy.
Released in December 2023, this year’s MYEFO lays out Labour’s plan to curb inflation with infrastructure cuts and tax hikes.
There’s not much specific to small businesses in the 350-page document. Page 6 mentions a possible $650 in energy rebates to ease the cost-of-living crisis, but otherwise we’ll need to wait for the full picture in May.
The message for small business owners is this: We’re not sure whether the headwinds will ease, how quickly or when.
Given this uncertainty, a proactive approach to business budgeting will help steer towards success in 2024, with room to move if things don’t improve.
Small business budgeting tips for 2024
Analyse past financial performance
Scrutinising income and expenses will help you understand where your money is coming from, where it’s going, and how to keep more of it.
These valuable insights lay the foundation for informed decision-making and greater agility as economic conditions change.
Set realistic goals
While ambition is admirable, ensure your revenue goals for 2024 are grounded in realism. Overly ambitious goals could lead to disappointment if things don’t improve.
Instead, aim for conservative revenue growth and achievable cost reduction targets.
Don’t try to cut too many costs too quickly
Cost-cutting is an integral part of budgeting, but striking a balance is crucial. Avoid hasty decisions that may compromise the quality of your products or services.
Instead, focus on:
- Streamlining processes by improving business systems
- Negotiating better deals with suppliers
- Exploring cost-effective alternatives
- Bundling online business services to reduce admin costs
- Eliminating unnecessary costs like penalties for late business name renewal
Bundle costs for control
Consider bundling services like ABN registration, business name renewal, website hosting, domain registration and email hosting with a single provider like Registry Australia.
Although you shouldn’t put all your eggs in one basket, there’s a lot to be said for the peace of mind and cost savings that come with simplifying online business services.
Don’t forget to register for GST
Many small businesses raised their rates in 2023 to cope with increasing costs. While this helped to ease the pressure, it potentially tipped incomes over the threshold for GST registration.
If your business earns over $75,000 ($150,000 for not-for-profits), you must register for GST.
Our previous guides have more information and step-by-step instructions for GST registration.
Develop a detailed budget
Create a detailed budget that breaks down expenses by category, such as sales, marketing, administrative, and personnel costs. This granular view will provide a clearer picture of your financial standing.
This granular approach provides clarity and makes decision-making more targeted.
Plan for knowns, known unknowns, and unknown unknowns
Contingencies will remain critical in 2024, at least until we know more about the nation’s financial position.
Factor in both known and potential expenses, such as seasonal fluctuations, equipment upgrades, or unexpected market downturns. Allocate emergency funds to safeguard your business against unforeseen challenges.
Review regularly
Small business budgets are living documents. Take the Government’s lead by conducting a detailed review at least every six months to ensure your budget aligns with your business’s evolving needs.
Registry’s online business services are on your side
By implementing these budgeting tips and keeping an eye on economic trends, you can confidently navigate any challenges and seize opportunities that await in 2024.
We’re doing our bit with affordable, easy-to-use online business services and a local support team helping small businesses eliminate the stress of managing their growing affairs.
Our integrated online business services, including automatic business name renewal, ABN registration and .au domain hosting, simplify your business operations and streamline costs.
With Registry, you not only gain access to essential tools but also a partner dedicated to your success.
Budget better with our affordable, user-friendly business services.
