As many New Years resolutions fade into distant memory, it is an excellent time to reflect on both what went well in your business last year as well as what you could do differently to achieve greater success in 2015.
It is often said that in business, “failing to plan” can amount to “planning to fail”. While that is a fairly dramatic statement there is some truth in it and having a clear plan for the year ahead will give advantage, in what remains a tough and competitive trading environment.
So what are the key aspects that you, as a business owner, should be looking at to set the road map for 2015?
Strategic Goals
Have you set enough time aside to consider what your strategy is within the business for the year ahead, and what you would like to achieve over a three to five year timescale? Often referred to as “working on” rather than “working In” the business it can be difficult to achieve when the business owners are heavily committed to the operational and support aspects of running the business. Ring fencing proper strategic management time can be as much as an investment in your business as a financial injection, but it requires discipline not just to create time to develop your strategic plan, but also to monitor and adapt this plan as the year goes on.
Personal Goals
It is vital that your own personal objectives align with the strategic objectives of the business. Many of us will be considering retirement at some point in the next decade and as such, succession planning or maximising value in the business for a potential sale should be integral part of both business and personal strategic planning. In these cases, value will always be maximised when the business can operate effectively and profitably without the outgoing business owners being essential to the operations of the business. This will often mean the delegation of key tasks and transfer of skills to those within the business showing most drive and aptitude for furthering their careers. Such ambitious individuals may in fact become the future purchasers of your business. This also ties in with achieving the right Work/Life balance and working smarter hours rather than longer hours.
Increasing profitability
Analysing your historic financial results can help highlight where profits can be improved. Typically profit improvement can fall into three broad categories :-
Profitable top line growth – Where can you achieve easy success by focussing more on sales effort? Often doing more work with existing customers can be the easiest win. Remember the saying “Turnover is vanity, profit (and positive cash flow) is sanity”
Cost control and reduction – Are you getting the best possible deal from your suppliers? More cost effective alternatives may be available. Volume and early settlement discounts might also be possible through negotiation. Are you carrying unnecessary overhead cost?
Improving efficiencies – Can you get more out of the current resources in the business? Allocation of responsibilities, improved supervision/training and reviewing working practices can all help generate more profit without necessarily increasing the cost base.
It will come down to good planning and doing things differently in your business in 2015. This can be achieved with the help of your business advisers and perhaps having that discussion will be a crucial first step to success in 2015.
