Last week on Forbes, I discussed the importance of preparing your year-end, 2017 tax strategy, and as 2018 looms ever-closer, I thought this week we’d continue the conversation by focusing on your overall business strategy for the new year.
Whenever the fiscal year of your business ends, whether that be December 31, or January 30, you should not wait until the very end to start planning for your next year. That means having a crystal clear understanding of the successes and challenges of your current year, how that impacts your upcoming year, and developing a vision of what you want to accomplish, and how.
I believe you should always start working on your next year strategy about four months in advance of the new year. It awards you enough time to make an impact on your final quarter and lay the groundwork for making sure your next fiscal year starts off on a solid footing.
For the owners who want to achieve greatness, push the envelope, and grow their business through market share, market penetration, paying down debt, increasing sales, profits and cash flow, I urge you to get off your ass and get going now!
The way I see things is, if your business isn’t growing, pushing the envelope, thriving, and maximizing profit, then all you’re really doing is suffering a slow death. Believe me, your competition is fighting the fight every day, and they didn’t wake up in the morning and say “Gosh, golly, I hope I stay even this year.” They want to eat your lunch, take your business, absorb your market share, hire your best people, and steal your customers away.
Some people might ask me if they should start planning by looking at their competition, and I say NO. Why focus on the competition, instead of focusing on yourself? When it comes to my business, I don’t care what others do. I care about what we do. Recognize your competition for what and who they are, and then put your best foot forward by pushing the envelope in your business.
You should approach the new year as if you are going to war, and for that, you should develop a strategic plan with the help of your key people. Use their input to develop the tactical disciplines that will help execute at an elite level. Have them buy-in to the plan you create, and reward them for exceeding gross-margin targets.
You’ve probably heard me preach the importance of a five-year business plan, and the need to work things backward from a five-year standpoint. So, for the last four years, of the five-year plan, it should be broken down into quarters, but for the next twelve months, the first twelve months in the five-year plan, it should be broken down by the month.
If you’d really like to get crazy with your new-year plan, break it down by week-to-week, and track yourself through milestones and flash reporting. Determine how well you’re doing versus your weekly plan, monthly plan, and your annual plan.
You need to start your new-year planning four to five months in advance of the year’s end; and as we sit here now in mid-October, here are some considerations I’d like you to think about, as you start playing catch up with yours:
- Start developing a list, by month, on how you did this year. Revenue, profit, and free cash flow.
- Did you successfully attain whatever goals you had laid out for this year? If you did, were they too easy? If you didn’t, how come?
- If you had a plan, even if it’s a revenue plan, did you hit it, and how did you hit it?
- How many accounts did you lose this year that you should have gotten? How many existing accounts did you have that went somewhere else? Dissect it, and figure out why, and don’t be afraid to call these accounts and ask why you lost them.
- How much business did you bid on, and didn’t get? Was it a people thing, a pricing thing, a geography thing, a competition thing; What was it?
Answer these questions and find out why you succeeded or failed this year. Otherwise, you’d better get comfortable accomplishing nothing new if you plan to do the same things next year that you did this year.
As always, feel free to tweet at me @MoscaSmallBiz, or give me a call at 800-743-0402 if you’d like to discuss your 2018 business strategy.