There's no doubt that life as a small business owner is challenging. Confidence levels have fallen, profitability has been stretched and cash flow remains a challenge for many businesses.

However, despite the challenges, NAB is optimistic and committed to supporting small businesses. We recognise the potential and opportunity that lies within this sector - it's the engine room of the economy.

As we head into a new year, there are a few things that you need to keep in mind to ensure your business is well placed for the year ahead.

Tip One: Review your business plan

Having an up-to-date business plan will help you focus, crystallise your thoughts and identify priorities, saving both time and effort down the track.

When you're thinking about your business plan give yourself time to think about what you want to achieve this year? Do you want to grow your business, remain as is or sell?

What is happening in the market that you could take advantage of or need to be aware of?

Most importantly reflect on your learnings from 2011; what worked and what didn't and make the necessary changes to your business plan.

• Business Plan how to guide

Tip Two: Update your cash flow forecast

A cash flow forecast can help predict upcoming cash surpluses or shortages to help you make the right decisions.

This can be done by estimating your likely sales for each week or month. If you have been in business for over a year use your previous sales history. Don't forget to factor in seasonal patterns, your future plans, and current market conditions.

• Cash flow forecast how to guide

Tip Three: Collect debt more effectively

Collecting debts quicker will help cash flow and assist you in meeting your commitments. Staying on top of your collections is a good practice for a healthy business. This can be done by:

• Developing a collection plan for overdue invoices
• Training staff to bring in cash
• Provide easy payment options for your customers, such as EFTPOS, BPAY®, over the telephone, mobile or online. This may help you collect your funds faster.

• How to collect debts online training

Tip Four: Keep on Learning

It's important to keep working on your capability to run your business. Set yourself goals to add new skills. There are many ways to do this which can fit in with your busy day, including:

• Find other business owners that can act as a mentor. Look for someone who had the same objectives that you have for your business.
• Look out for Small Business festivals in your state which are designed to provide you with additional skills in running your business.
• Find your local not-for-profit organisation that can provide you with quality business information, advice and guidance.
• See if your bank is running a free seminar or networking event in your local area
• If you are looking for more formal education then you have the option of online or class room qualifications.
• Take advantage of free online tools, resources and insights that you can tailor to your business, a great range can be found at nab.com.au/smallbusiness

Tip Five: Review your bank

Make sure that your bank meets your needs. Your banker should be more than just your finance provider – they should be your business partner, taking the time to understand your business, your industry and your personal and business aspirations. You should seek out a business banker that understands small business, the current economic climate and the dynamics that may affect your business and is able to make the decisions you need to save you time.

A few factors that you should also consider when reviewing your bank include:

• Location and access. Do you have access to the small business banking team when you need them? Think about when and how you want to do your banking. If you need to speak to someone face to face, are they local? Is someone available over the phone when you need to talk to them outside of normal business hours?
• Small Business Products. Do they have the products to suit your business needs. As your business changes make sure your financial products are still right for you especially as new products are developed specifically to support small businesses.
• Product and specialist service. What additional services or products might you need and can you speak to a specialist about these? Will you need foreign exchange products; vehicle or equipment finance; or wealth management services to provide insurance, investment and superannuation advice?

Remember price should not be the only criteria in determining which bank is right for you as getting the right capital structure, business insight and superior service are also important considerations.