December is a hectic month and with everything that’s going on, many small business owners forget to plan for the New Year. But planning ahead is the most important thing a small business owner can do to ensure their business is successful in the future. It helps you focus what you want to accomplish and breaks your big goals down into smaller every-day tasks that are easier to manage.
Yes, December is a busy month, but if you can take some time to do these ten things you will start 2012 on the right foot.
1. Set personal goals: Setting goals is the first step in goal achievement. If you don’t know where you’re going – how will you know when you get there? Think about where you want to be a year from now, and then start breaking that goal down into more manageable (and less scary) steps that you can work towards each week and month. Whether you want to improve your work/life balance, your financial situation, or your physical fitness – having a goal will help you get there.
2. Set business goals: Small business owners are notoriously short on time, but that doesn’t mean business planning should be neglected. Stephen Covey, author of The Seven Habits of Highly Effective People, says that most people spend the majority of their time working on tasks that need to be dealt with immediately and that they tend to neglect important, but not urgent tasks like goal setting. Though you have a million things to do, make sure you set goals and ensure they are SMART – specific, measurable, attainable, realistic and time oriented. One example of a SMART goal is, ‘I will acquire three new clients next month by asking for referrals from my current customers.’
3. Have your employees set goals: Help your employees achieve their career aspirations by asking them to list some goals they would like to accomplish in the coming year. These goals can include activities they want to do more or less of, areas they would like to improve and new skills they would like to develop. Once the list is developed, have an open discussion about how you can help make those goals a reality.
4. Re-analyze expenses: Look at every expense in your business and see if there’s a way to reduce it. Are you reaching the end of your phone or internet contract? If so, you can almost always negotiate a better deal for your business. All you need to do is call into the cancellation/customer service department and ask for a better rate – it’s that simple. While you’re at it, ask your insurance company to re-quote and also take a look at your monthly bank statement to ensure you’re not over paying on banking fees and interest.
5. Update your prices: This point goes along with re-analyzing your expenses. In instances where the costs to bring your product to market have increased, you should consider how that will affect your monthly break-even. If your profit margins are eroding due to increasing production costs, it may be time to consider updating your prices. That being said, not all price increases are a result of greater expenses. The perception of value can often influence the price a customer will pay for your product – so if you are offering a high quality product you may consider a pricing strategy that is more reflective of the value you provide.
6. Re-calculate your monthly break-even: Sure you may have calculated your break-even point recently, but as my boss used to say, “shift happens.” With all the fluctuation in the market these days it’s very likely that your fixed costs (rent, equipment, taxes, interest rates) and variable costs (salaries, commissions, cost of materials) have changed since you originally calculated them. Having this number up-to-date is extremely important for your business because it tells you how many sales you need to make in order for your business to survive. Make sure that you and your employees are aware of this number so you can work together to surpass it.
7. Set sales targets: Saying that you want to increase sales this year not enough. Instead of using a top down approach like ‘I want to get 1 per cent of the Canadian market,’ develop a more realistic sales forecast by determining how many prospects you can contact each week and how many meetings you can expect to get each month. Using this bottom up approach will show you what you need to do each month to meet your monthly and yearly sales goal. This approach is also a lot more realistic to potential investors because it’s based on what you can actually do.
8. Develop a simple marketing plan: You don’t have to be a marketing guru to develop a marketing plan, but you need to understand who you want to sell to. If you can define who your customers are in terms of demographics (age, gender, occupation, income), geographics (country, province, city, postal code), and behaviours (their attitudes, values, interests, and benefits sought) a marketing plan will follow. Once you know who you are targeting, it’s easier to determine the products you will offer, the price of your products, the promotions that you will use, and the place your products can be purchased from because each activity is planned with the customer in mind. Assessing your target market’s needs and tailoring your marketing efforts to that audience will ultimately help you get more out of your marketing dollars.
9. Develop a cash flow forecast: You should know how money is flowing in and out of your business. A cash flow forecast includes your monthly sales projections, cost of sales and operating expenses. If you don’t have a cash flow forecast – now is the time to develop one so you can stay on track and ensure you don’t run out of money.
10. Contact your clients: The holiday season is a great time to get in touch with everyone you do business with. Thank them for their support and wish them the best in the New Year. You don’t necessarily need to do this in person, but a phone call, email or card will let them know that you value the relationship. If you decide to send a card, make sure that it is handwritten with a personal message – as anything less can actually have an adverse effect on the relationship.
If you’d like more information about how to implement any of the items mentioned in this article, visit www.bizlaunch.com .