New Year’s resolutions come in all sizes from the grand to the small. Whatever the size, for small businesses sticking to those resolutions can mean the difference between a prosperous year and a lackluster one.
Here are five things for your resolution list this year.
Resolution No. 1: Have a plan
Whether you are looking to grow sales in the New Year or build loyalty among existing customers, small business owners have to have a plan to realize their goals. According to Gregg Landers, lead managing director at CBIZ, a business consulting firm, the plan doesn’t have to be formal but it should be written down.
“It should start with where you see the business in three years as measured by whatever your key measurements are,” says Landers. After that identify the three to five areas of improvement you need to make in order to move toward that long term goal, he says.
“Finally and most importantly, it should list the key action steps you need to do this year to advance yourself one year closer to your longer term plan,” he says.
Resolution No. 2: Make strategic planning a weekly habit
It’s easy to come up with a plan, write it down and then revisit it a year later, but doing that won’t be an effective way to realize your goals for the year. Instead, Bob Phillips, managing principal at Spectrum Management Group says to make strategic planning something you do on a weekly basis.
“A lot of time is usually spent on creating strategic plans that then get placed on a shelf and not reviewed for a year or longer,” says Phillips. “Ongoing planning lets you take stock of what worked and what didn't work, and helps you set new directions and adjust old goals.” Phillips says to set aside time each week to review your plan, make adjustments where necessary and to look forward into the future.
Resolution No. 3: Set a budget for you plan
It’s great to have a plan and to look over that plan on a weekly basis, but if you don’t have the money to bring that plan to fruition it’s a big waste of time. So Landers says make sure you allocate money to fund the plan, and build into the budget expected revenues and expenses not only to run the business but also to reach the goals of the plan. “Carrying your budget through to the balance sheet is critical because this is how you know the true expected impact on cash,” says Landers. “When it comes to cash you don’t want any surprises.”
Resolution No. 4: Use forecasting in your accounting process
When it comes to accounting, often small businesses use it to get a sense of how they did over a period of time, but Phillips says it can also give a sense of where you are going. The goals set in the strategic planning process should be built into the forecasting model, and you want to look out 12 months with the forecasting.
“With the model, you can begin to compare your anticipated results in the forecast with the actual results achieved,” he says. “You’ll find great operational information doing so, to enhance what is working or to deal with what isn’t.”
Resolution No. 5: Target some of the revenue to come from new products/services
In order for any size business to grow it has to increase its customer’s base via new products and services. One way to keep this top of mind is to target 10% to 20% of revenues coming from new products and services, says Landers. You also want to be on top of all the changes in the marketplace, know who your customers are and how their needs are changing and have a good sense of the competition and what they are doing.
“Sustainability of almost any business, any size, means growing and evolving your service line,” says Landers. “This also helps with intangibles like employee engagement, morale, building a culture of new ideas.”