In addition to closing out the old year, it is a great time to plan your way success
Along with the Holidays, comes the start of a new year when we toss out the old, and start with the new. It is also during this time that many of the leading businesses go about closing out the year and preparing for the next. One of the most impactful things that one can do it review the current year and put together a plan to guide your business. This is a guide on how to plan your. way to success that is based on our experience working with many small businesses, most likely, like yourself.
Many of the leading companies have a process to review the past year and prepare a plan for the next year. However, there are many that don’t. In this post, we will describe activities to close out the current year and plan for the next.
“BY FAILING TO PREPARE, YOU ARE PREPARING TO FAIL” – Benjamin Franklin
The first step in planning for the next is looking at what worked last year in your business, and what didn’t. The specific steps include:
- Review your year-end financials
- Define your business goals
- Create a plan to reach your business goals, and
- Take action to reach your goals
How to review your year-end financials
The first step in planning for growth is to review your year-end financials to determine what worked, and what didn’t. You should review their year-end financials by looking at their income statement, balance sheet, and cash flow statement. They should look at their revenue and expenses to see where they can improve their business. They should also look at their assets and liabilities to see if they are in a good financial position. Finally, they should look at their cash flow to see if they are generating enough cash to sustain their business.
Specific questions that should be asked and answered, include:
- How much money did the business bring in last year?
- If the business is not seasonal, what was the best month?
- What was the biggest expense last year?
- Where there any surprises within our financials?
- Which expense or expenses increased the most last year?
- What much did our expenses deviate from budget?
- Have margins changed?
- Are there any trends in the financial statements?
- Are there any red flags you should be concerned about?
- Are there any industry or economic trends we should be concerned about?
These are just a small sampling of questions. I am sure that there are many more that are more relevant to your business?
How to set business goals for 2023
There is no one answer to this question, as it depends on the specific business, the types of goals, capital, assets, and access to resources, amongst other things. Here are some tips on setting goals that we have found to be useful. They include:
- Making a list of what you want to achieve
- Breaking down those goals into smaller, more manageable pieces
- Creating a timeline for each goal
- Identifying any resources or help you will need to achieve each goal
- Checking in regularly to ensure you are on track
Now that we have gone through and defined business goals for the next year, what do you do with them?
You create a plan, but before we go into it how, let us talk about the benefits of business planning.
What are benefits of business planning?
There are several benefits to business planning, some of which include:
- Create a roadmap to reach your business goals
- Attract investors
- Secure financing
- Run your business is a more organized and efficient manner
- Help management track progress, and measure success.
How to create a plan to reach your business goals?
If you have defined your business goals as was defined above, you have completed the first step. When defining your goals for 2023, they should include growth targets, profitability goals, or expansion plans.
Once your goals have been identified, you should develop a plan to achieve them. Consider:
- Breaking down your goals into smaller, more manageable tasks.
- Identifying your stakeholders, or who else has an interest in the success of the outcomes of your business. These could management, employees, family members, key clients, and key vendors.
- Identifying resources, including capital to reach your goals.
- Assigning tasks to the person responsible for them.
- Assigning key performance indicators (KPIs) that will define progress towards your goals. They should be tied to the goals you seek to reach.
- Assigning timelines to complete each of the actions making up the goals that you aspire to attain.
Finally, your plan should be reviewed and updated regularly to ensure that it is on track to be completed.
How to take action to reach your goals
At this point, you have identified your goals, broken those goals into smaller, more manageable tasks, assigned them to a responsible party, identified KPIs, and created timelines to execute tasks against.
What is next?
Run your goals as projects using a project management framework. One such framework is the agile project management methodology.
Originally intended to drive software development projects, the agile framework has been successfully applied to marketing, construction, research and development, and automobile projects.
How to plan your way to success – conclusion
Hopefully, this is a good start for how to plan your way to success. In the next blog post, I will dive deeper into the agile project management framework in our next blog post, and how it can be applied to helping you meet your small business goals.
Most often, capital is required to meet your business goals. If you need capital, or a merchant cash advance, please consider Zip Capital Group. We are small business experts and can help you with your capital needs. Contact us or call us today at (800) 795-3919.