With the new year upon us, this is the time you need to ask yourself, what are our goals for this year? This time next year, we are going to be in what position? Now, as every business owner understands, the key to being able to congratulate yourself on achieving those goals will be your planning.
These goals are your roadmap of sorts. They will point you in the right direction, tell you if you have gone off course and ultimately let you know when you have reached your destination.
With this in mind, here are four key factors you should rely on when designing your roadmap.
It is a good idea to get everyone that is involved in senior management or manages a department to create projections for the upcoming year. Make these projects based on an expected increase, decrease and for things to stay the same.
By creating projections based on last years numbers and results, you can then set yourself realistic expectations. While these are just projections and there will definitely be variations, it is always good to have a picture in mind of what next year may hold.
It is a good idea to get predictions based on the key aspects of your business. Such as sales, market analysis, expenses and revenue. Once these have been reviewed, start to look at how you can alter your operations in order to increase the likelihood that your positive projections will be fulfilled.
Organise you budget
Now that you have created these projections, it is time to design a master budget for the year. Make sure this master budget is guided by your expected income and expense per your yearly predictions.
However, in order to give yourself the best picture of next years finances, make sure you go into as much detail as possible. Include things like cash flow statements, cash reserves, debt commitments and the many assets the business may own.
Once you are comfortable you have provided as much information as possible, now analyse your estimated year-end profit. How do you feel about this figure? If it is less then ideal, this is the time to look at areas where you may be able to reign in a few expenses, in order to bump that number up.
Is expansion on the cards?
Once you have a good hold on how the upcoming year may play out, discuss the viability of expansion. Ask your management team, barring any unforeseen disastrous issues, do your projections allow for any expansion?
An expansion comes in many different shapes and sizes. It can refer to bringing on new staff, developing a new product or service, moving location or adding a new distribution channel. Are any of these viable?
If the answer is yes, it is a good idea to start putting the wheels in motion now. If the answer is no or potentially, either put it in your long-term future or see if you are able to move things around and still make it happen.
For example, if you want to bring on new staff but don’t know if you have the budget for a full-time staff member. Before you investigate options such as freelancer, look at outsourcing. This is a much safer and cost-effective means of growing your team, compared to either waiting it out or hiring a contractor.
Now that you’ve completed all the reviews, and analysed your projections, it is now time to commit to a plan of attack.
You are now in a position to create your roadmap. Design a strategy for how your business is going to progress through the year. This should outline exactly what you are going to do throughout the year, benchmarks that indicate when you’ve achieved something or gone off track and even contingency plans in the event something goes wrong.
This is the time where you set yourself and your business up for success. By creating these projections, budgets and strategies you are laying the platform for future success.
If you need to, this is the time where you should seek outside advice, see what options are available and start thinking about what is best for your business. Don’t get caught short, instead make this upcoming year the best one yet.
If you would like to discuss future plans for your business, we would love to chat. At Deployed, we specialise in helping Australian and New Zealand businesses perform to their highest ability and achieve maximum return.