The former Spain midfielder has taken charge at the London club - who finished 10th in the Premier League last season - and with the departures of Marc Cucurella, Andrewy Santos, and Tyrique George, funds are available to bring in new players, following the signings of Marco Palestra and Geovany Quenda.
And the new manager is feeling good about his updated squad.
He said: "I don’t think we are that far to creating a good team, to competing in any game and to win a lot of games. Honestly, I think that..
"Last year, some things happened. I positively think that we can do much better, change a few things for sure, updating and reinforcing in some positions.
"If we get the right balance and the right decisions, we can have a good season. I’m optimistic and really believe it. I don’t think that we need to change everything. It’s about changing a few things and that can work.”
Xabi is keen to instill high standards into the club, not just his first team squad.
He said: “We want a team with the right mentality, the right hunger, the right standards and on a daily basis build on them.
“I’m not a general, but I’m a good professional, and I know what it takes to be a good professional. Those are the standards we want for the whole building, not just for the team.”
And the ex-Real Madrid boss is looking forward to making Cole Palmer central to his squad following his recent injury setbacks and omission from the England squad.
He said: "He’s special and if he’s enjoying it, he’s in a good mood, a good spirit, he can be a key player for us."