Most economists are predicting growth in the economy in 2014. So what should you be doing over the next few months to strengthen your business and get it ready to take advantage of any upturn? The most profitable businesses we act for have two key things in common:
- They plan and budget ahead and monitor how they are doing monthly
- They understand that in business, as in life, unexpected situations arise and they need to have spare resources to protect themselves or to invest in a new opportunity.
So what should you be doing now to plan ahead?
It’s a good idea to set aside a half day for this activity and have a good think about where you want your business to be in twelve months, what your turnover and profit would be and write these down.
Remember the easiest way to grow your business is keep your existing customers happy, so ask yourself “How are we doing in this area, what are our competitors doing, can we improve, how do we get recommendations from existing customers, how do we exceed customer expectations? “.
Consider how you attract new customers to our business, what marketing do you need to do and who is going to do it?
Write an action plan and EVERY MONTH review how you are doing against the plan, use this plan as your key indicator of how well you are doing towards your annual target.
What if something unexpected should occur?
Plans change, sometimes for the good and sometimes the other way. The first rule of business is always put some of your profit away for that unexpected opportunity or event.
How much should you have in reserve? This depends on a whole variety of things such as the volatility of your industry, market conditions and your own personal circumstances, but as a rule of thumb, think about what would happen if you lost your largest 5 customers? What money would you need to have in reserve to go out and replace them?, or if you have many smaller customers what would happen if your suppliers went out of business, what would you need to resource the product elsewhere? Essentially think about the risks you face that you cannot insure against.
On the other side, what happens if an unexpected opportunity arises and you need to invest to take advantage? If you have been prudent in the past then you could utilise reserves or you may need to borrow funds. If you need to go to a lender they will need projections and comfort from past performance that you can repay the loan and this is where we can help. Please make us your first port of call if you need funds, we have considerable experience in making sure our clients get proper advice before they commit.
Whatever your plans are for 2014 we wish you every success and please talk to us about helping you formalise your aims hopes and ambitions in a Business Plan so you can review this each month and ensure you remain on target!
A very prosperous new year to all of you!