As the New Year dawns, it might be time to take an honest appraisal of your business and set some goals for improved cash flow and profitability. Here are a few thoughts for you to consider.
First of all, a realistic assessment of your business is the starting point. Don't focus only on sales or income - look closely at profit and loss statements, payroll and payroll-related costs, employee retention and major capital expenditures. Get an accurate view of where last yearÂÂ’s money came from and where it went. Get input from your tax professional and financial advisors. In order to measure results, you need a clear picture of the businessÂÂ’ strengths and weaknesses.
List your goals for this year and put them in order of priority. Are you looking to increase your income, expand your business or create a strong enterprise to sell in a few years? Your goals might not be attainable in one year. That's why an honest assessment and outside input is important. Both enable you to assess your business more accurately against comparable ventures, to set priorities and to devise a realistic plan. The following steps will help you plan and implement your strategy:
- Determine which business services/products are most popular. Look at previous customers - especially repeat customers - is there a specific segment in your line of business that commands most of your time? If so, that's your niche. Don't try to be everything to everybody. It goes against the grain not to pursue every business lead when times are tough, but conserving your time, resources and efforts to target customers in your particular niche is key.
- Develop a marketing message that addresses your clientele. Keep it simple and in everyday laymen's terms. No one wants to decipher a long statement to figure out where your company excels.
- Ask current customers how they found your business and/or your products. This will help you identify the best way to reach new customers - online, social networking, local newsletters, flyers, yellow pages. With existing customers, have a formal contact program in place and keep in touch with special offers, new product news, etc.
- Invest in technology that will improve productivity and effectiveness, and the training needed to use it. Would your salespeople be more productive if they had smartphones with applications that let them log orders or check on accounts receivable from the road? Don't neglect the basics. If your invoicing procedures are cumbersome and collections haphazard, your first priority is to upgrade with the right hardware and software. Don't forget to check out the software available through Internet-based computer technology known as cloud computing. This pay-as-you-go option gives small businesses access to cutting-edge solutions and applications they could not otherwise afford.
- Hiring and firing in a small business environment can be an uncomfortable task, but in a small enterprise it's crucial that each person have the skills and commitment to do the job well. You might start by having each employee write up their own job description with a list of essential skills and compare this with your version. Write job descriptions for each position essential to your operation. If your current workforce does not have the skills you need, perhaps the situation can be fixed with additional training. If this is not viable, you might need to look for someone else who is adequately qualified and able to do the work.