Before you know it, 2020 will be here! As we approach a new year, what are you doing to start the year poised for growth and success?
Starting the new year is exciting with anticipating a profitable year. While excitement is great, what are some practical steps you’re taking to make it a profitable year? Although the economy is robust and your revenue is on an upward trajectory, are you prepared for a decline in growth if consumers spending changes in the next twelve months?
Here are the three types of goals you should set for your small business in the year to come:
Review Your Budget:
If you are like me, I wrote a business plan to outline target goals and a budget when I started my business. I’ve been so busy growing and working my business, I haven’t taken the time to review my budget. As long as I have adequate cash flow and a healthy balance at the end of the month, I didn’t think about my budget.
Lesson Learned: Reviewing last year’s budget helps to prepare for the new year
Using accounting software is key to your budget planning. When I looked at last year’s budget, this activity helped me to look at my operating costs, expenses, allocations, sales, and the difference between what I forecast and the actual gross and net profits. In order to accomplish my target goals, this activity helped me to adjust my budget for 2020.
Here are a few tips to help you to have a profitable year:
- Manage your expenses to improve your profits. For convenience, do you set up auto-payments, are you paying for expenses you no longer need or paying for duplicate services that are a waste of money?
- Increase your financial capability. Not to add this feature to increase your debt, but having an affordable line of credit is a little insurance – better to have it when you don’t need it. Consider applying for a business credit card or a line of credit.
- Mind your personal spending. Oftentimes, when sales revenue is plentiful we increase our disposable income for personal use. We spend more on personal things versus saving more money for an emergency fund or cash reserve for the business. My rule of thumb is to have three to six months in reserve.
Review Your Time Wasters:
One way small businesses hinder their growth is using manual processes to manage and track their customers – what are you doing with the stack of business cards you collect at networking events? How do you manage and track accounts payable and accounts receivable? How do you manage and track your social media postings?
All of these things take time to do. None of them is my favorite to do but necessary.
Lesson Learned: Automate, automate and automate!
Find tools such as customer relationship management (CRM) system to manage customer data. I use a card scanner to save time typing. An easy step is to set aside one hour per day input and update your customer data. Don’t lose a sale because you lose let a warm lead turn cold. Exercise a little discipline pays off.
Make it Happen:
Setting goals and hoping for a profitable year is great and keeps you motivated but there are a few more easy steps:
- Do daily affirmations – “I AM” or “I WILL”
- Follow through with ACTION – what are the steps to take and set a timeframe
- Keep it Simple – when improving or building new behaviors, make it attainable. You’ll have more success taking small steps that you can consistently do. Once you sustain your desired behavior, add a stretch goal to increase your effort. Taking on too much too soon without results is discouraging.
- Tell someone about your growth plan – challenge yourself to be accountable to your intentions.
Below is a resource link to Kick-off Your New Year!