Time To Plan Your Next Steps
Yes, it is after the New Year. However, New Year or not, now is the time to start your business planning process. Planning, you say? Yes, planning. The only way you are going to create efficiency, increase cash flow, develop a new product or service, consider your long-term exit strategy or grow your company is to develop a strategic plan.
Consider what will happen if you continue to maintain the status quo. Nothing. And in this economy, that could be disastrous for your company.
So how and where do you start?
First, lock your door, turn off the ringer to your phone and close your email. Print your most recent financial statements. (If your financial statements are not up to date, call me. You need a new bookkeeper.) My recommendation is to print the financial statements showing the quarterly results. If your sales or revenue is seasonal, the quarterly statements will show the spikes in your revenue. Consider ways to flatten the spikes. Are there new services that can be offered? New products that can be developed that can be sold year round or during the seasonal downturn?
Let me give you an example.
A couple owns a very profitable dog boarding season. The problem is that the business is very seasonal with the spikes coming during summer vacations. A solution is to open a doggy daycare. Also, start advertising dog training sessions which could be done indoors during winter when the days are shorter. This could not only help bring revenue in during the slow months, it can also help you retain employees.
Even if your revenue is not seasonal, it is likely you will see a decline in sales from where you were a year ago. The fix for this could be to tighten your belt by reducing expenses. However, it is rare that cutting costs ever results in additional revenue. If you have a trained staff on hand, you may be tempted to eliminate a position. But, by reducing your staff you are decreasing your future revenue opportunities even more. Instead, you can consider developing a new product or service. You could also consider developing a strategic relationship with another company that offers synergistic services or products. Chances are that they are feeling the economic crunch and would welcome the opportunity to develop a close referral relationship.
Starting next month, I will review the cost of doing business and ways to isolate these costs so you know precisely how to hone in on ways to save money during the slower months.
And, if you are not experiencing an economic downturn, congratulations! You are one of the few!
