What Will You Do Differently this year?
As the year is rapidly coming to a close it is essential that we all devote a little time to planning for next year to ensure we make the most of the opportunities that may present.
Ideally you will be bringing out last year’s business plan and updating it for the coming year. But for those that are pressed for time here are a few tips on getting the most out of the year ahead.
Stop, Start, Continue: The ‘stop, start, continue’ exercise is essentially a review of the success of the activities and products (or services) you delivered last year. Where possible get your team involved and decide based on the current year what will you stop doing (i.e. eliminate the failures), start doing (i.e. new innovations or changes to existing activities) and lastly what will you continue doing (i.e. those services you will retain). This will lay the basis for your strategic goals for next year.
- Sales: Plan out your sales budget for the coming year. There are a few different approaches you can employ but generally start with a top down approach, i.e. know what you want to achieve as far as gross revenue is concerned. Once you have established this use bottom up methodology to calculate what products/services will achieve your desired revenue.
- Marketing: The marketing budget is often compiled in conjunction with the sales budget. Using the ‘stop, start, continue’ exercise results ensure that your marketing activities are supporting your new goals/strategic direction. Make sure you do any relevant market research into any new markets or existing markets.
- Labour: Once your sales and marketing budgets are planned out take a close look at your team. You will want to manage your capacity for the following reasons:
- during the peak periods you have sufficient staff to avoid lost sales opportunities,
- during lulls not too many members, to avoid idle capacity.
- Also look at pay rates and staff productivity – to see whether staff changes are required.
- Cash flow: Your cash flow budget will ensure that you have sufficient funds in the bank to cover your planned activities. If there are any shortfalls your cash flow budget will be essential in planning and acquiring credit with your bank or negotiating changes to supplier payment terms. Your cash flow budget is created using the three budgets above and your estimated overhead costs (where necessary these can be estimated by adding inflation to your costs from the current year).
- Customer feedback: All the planning in the world is made redundant if your customers don’t want what you are selling. If you are communicating with your customers on a regular basis you will know what products/services to focus on. Customer surveys and client nurturing programs are essential tools for this purpose.
- Update your team: Once the plans and budgets have been completed share the direction with the team so that all staff are working towards the same goals. There is nothing worse than having a massive advertising campaign if those responsible for inventory haven’t been informed to ensure sufficient stock is available.
- Getting it done: So many owners and managers start out with the best intentions but fail to deliver due to time restraints and other priorities. Set some time limits on getting these done. If budgeting is not your strength delegate or get external assistance.
If last year was not all you hoped it would be then do something different. Plan smarter and get external help to ensure this year is a huge success. For assistance on planning for this year contact Watts Price Accountants today!
Richard Kemp – Watts Price Accountants
The advice provided on this Article is general advice only. It has been prepared without taking into account your objectives, financial situation or needs.