January is a time of renewal.\u00a0 It marks a new beginning, a fresh start.\u00a0 But there are things you should be doing now, before December 31, to get you out of the blocks fast when the year turns over.\u00a0 If you\u2019re on a roll, you need to think about how to keep that roll going.\u00a0 If the year ending has not been a kind one, then you need to think about how to make the new year better.\u00a0 Either way, there are four things you should do before we say goodbye to the old year and ring in the new.\u00a0 Actually, there are probably more than four things on your to-do list before the end of the year, so I hope the four I have in mind will be included.\u00a0 For more on this, please read below.<\/p>\n
First, you need a written annual plan that outlines the three to five strategic initiatives you intend to implement next year to move your company forward.\u00a0 Hopefully, this is already done, but if it isn\u2019t, there\u2019s still time.\u00a0 This needs to be done thoughtfully, but it need not be a complicated or time-consuming task.\u00a0 A single page per strategy should do the trick.\u00a0 Just start with a paragraph that describes the strategy, explains why you\u2019re implementing it, and lays out the benefit(s) you expect to come from it.\u00a0 Then break the strategy down into individual tasks, assigning responsibilities and deadlines for each, and TA DA! \u00a0 . . . you\u2019re good to go.\u00a0 I assume you would be making this plan with the help of key managers, but if you\u2019re very small and doing this solo, then run your plan by your attorney, banker, accountant, or other trusted advisor for their input.<\/p>\n
Second, you need a Profit Plan . . . sometimes called a budget.\u00a0 I prefer Profit Plan because \u201cbudget\u201d has a negative connotation.\u00a0 It sounds restrictive, confining.\u00a0 Profit Plan, on the other hand, is more positive.\u00a0 It says, \u201cHere\u2019s the profit we intend to make next year, and here\u2019s how we intend to do it.\u201d\u00a0 Start with a month-by-month sales forecast which is always the dicey part because sales forecasting isn\u2019t an exact science.\u00a0 Be guided by your sales history, adjusting as necessary for current conditions.\u00a0 The trick here is to come up with a forecast that\u2019s realistic, neither unduly pessimistic nor overly optimistic.\u00a0 Once you know what you expect to sell, determining your costs to complete your Profit Plan is relatively easy.\u00a0 If necessary, get help from your accountant.\u00a0 The strategic initiatives in your annual plan will almost certainly have cost and revenue implications, so be sure your Profit Plan takes those into consideration.<\/p>\n
Third, do a customer review with the objective of ferreting out unprofitable customers.\u00a0 You know who they are.\u00a0 They\u2019re the ones who demand $100 worth of service for their $10 order.\u00a0 Wouldn\u2019t it be nice to start the new year by making those problem customers available to your competitors?<\/p>\n
And finally, do an audit of your general ledger.\u00a0 In part, you\u2019ll be doing this anyway to prepare your Profit Plan.\u00a0 But this additional scrutiny will tell you if any waste has crept into the system that needs to be curtailed, or if costs are creeping up and need to be more carefully controlled.\u00a0 You can almost always find something here to add to your bottom line.<\/p>\n
So those are the four to-do\u2019s I recommend before December 31.
\n\u2022\u00a0\u00a0\u00a0 Write an annual plan covering three to five strategic initiatives.
\n\u2022\u00a0\u00a0\u00a0 Create a Profit Plan to act as your road map to the profitability you expect.
\n\u2022\u00a0\u00a0\u00a0 Do a customer review and get rid of those who are not a good fit for you.
\n\u2022\u00a0\u00a0\u00a0 Audit your general ledger looking for waste and\/or spiraling costs.
\nAs I\u2019ve said, this is not intended to be a definitive list of all the things you need to do before the year is out, but if you do these four, I guarantee you\u2019ll have a better year next year than you will if you don\u2019t do them.<\/p>\n
For some small business owners, all this planning and financial stuff can be a bit intimidating.\u00a0 If that\u2019s you, call me.\u00a0 We should talk.<\/p>\n","protected":false},"excerpt":{"rendered":"
January is a time of renewal.\u00a0 It marks a new beginning, a fresh start.\u00a0 But there are things you should be doing now, before December 31, to get you out of the blocks fast when the year turns over.\u00a0 If you\u2019re on a roll, you need to think about how to keep that roll going.\u00a0<\/p>\n