It may still only be the beginning of the year, but fast-forward for a moment to the end of it, and ask yourself how you’ll know if 2023 was successful if you didn’t have a plan that defined success in the first place.
Make that plan your New Year’s resolution – if you haven’t already – and follow our four short steps below to make it happen.
Review goals (and goalposts)
Let’s start with targets and goals. Setting these is fundamental to giving the business direction, controlling where resources are concentrated and money spent, and aligning the owner’s and the business’s overall objectives and aspirations.
Clear targets and goals are also critical in giving the workforce an understanding of what they are working for, working towards, and why. To ensure they’re realistic, they must be SMART – Specific, Measurable, Achievable, Relevant, and Time-Related.
But goalposts can move as the market evolves. So, it’s important that each year you review the goals you’ve set, with input from your team (and from external advisors, if you don’t have all the necessary expertise in-house), to see if they’re still current and achievable, and indeed to establish which goals may already have been attained, or which need to be prioritised.
Armed with this insight, you can then update your business plan to better reflect not only the business’s current position, but how it could potentially grow and transform over the coming year.
This is about opportunities as well as challenges – and you don’t want either of these to be off your radar.
Understand what your finances are telling you
Keeping a close eye on your finances seems like a no-brainer, but it’s important to understand that finances are not just about profitability, and they’re not just about the here and now.
Finances play a critical role in forecasting and planning, so this is a good time to seek professional financial advice to ensure that, for example, you have enough cash to trade in the New Year, and a plan is in place to identify coming leaner periods, and put additional funding in place to deal with them.
Furthermore, your plan must be able to adapt and flex with changes that are highly likely in the business and its market – e.g. customers taking longer to pay, a supplier or customer closing down, key staff needing time off or out of the business, costs rising faster than expected, and so on.
A good look at your year-end figures is also essential at this point. Where did you get to versus where you thought you would, or where you wanted to be? If you are ahead of plan, can you accelerate growth? If behind, where do you need to make savings, increase efficiencies, or grow revenues and margins going forward? And if you had a great year last year, don’t forget to put aside the money to pay the corporation tax, particularly if business activity starts to slow down.
Asking these questions now will put you in a better position to reassess the business’s current and future performance, and make any changes necessary to strengthen both.
Steal a march on the market
Markets and competitors change, and if you’re not ahead of the curve you’ll lose ground to those who have been paying closer attention to what’s afoot.
So, resolve to start the year by sourcing some reliable market intelligence, and using it to inform analyses that will enable you to identify upcoming threats, and spot opportunities.
The PESTEL approach (Political, Economic, Social, Technological, Environmental, and Legal) is a good way to capture the external market factors that can impact your business, including industry changes and your competitors’ moves, and put plans in place to counter them or capitalise on them.
Internally, putting together a SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats) will enable you to better understand where your business is in a stronger or weaker position to address the points raised by the PESTEL insight, and to take action to reduce risk and optimise outcomes.
Factor all this into your business plan and you’ll be far better placed to anticipate what’s coming, and to deal with it proactively.
Add value to your workforce
Your business is built on its people – every business is. They’re your greatest resource, so during your business plan refresh, it’s worth thinking about whether you have enough of them to service the planned growth of the business, whether you’ll need to recruit, and what those recruits’ skill profile (and salary and reward) will need to look like.
On that last point, it’s also worth reflecting whether some of the roles needed to underpin the business’s growth could potentially be wholly or partially outsourced. Not only are there significant savings to be made in this respect, as long as you choose trustworthy outsourcing partners, but many roles needed in growth rarely need a full-time resource until a lot later.
At the same time, take a good look at the individuals themselves; are they performing? Are they productive? Could more thorough training (for which there is generally a lot of funding available) or more effective software tools enable them to deliver better?
Or do you need to schedule performance reviews with some members of staff to help them overcome issues and turn things around?
People should be as much a part of your plan as any other business asset.
Enjoy your break – then get started.
With a New Year come new challenges, new opportunities, new issues, and new unforeseens.
Somehow, you’ve now got to turn all that into a plan that will take your business forward in what promises, for most sectors, to be a tough trading environment in 2023.
If that’s something you think you could use help with, we’re ready to provide it, along with support for many other business and Finance functions and processes too. Click here to get in touch today.