By Julie Eisenhauer, CPA
Successful business owners invest time working on their business instead of in the business on a regular basis. Making the time to focus on business value enhancement, through defining a direction for the company, focusing resources, and setting priorities and action steps; is important to a company’s success.
Now is the time of year for business owners and management to review their current year successes, reevaluate their direction, and develop goals and action steps for the next year. This sounds like an easy step, but in reality, it can be an overwhelming task. Many would argue that the time spent on year-end planning can be time consuming and ineffective. Where should business owners and management start?
Where to Start
Consider looking at your business in a new light. Get to know the key drivers that enhance your business value and growth. Ask yourself the tough questions:
- Why do you feel your business has revenue growth potential?
- Do you have information about your competitors and market?
- Does your company have margin advantage?
- What areas in your business are weak?
- What is causing problems in these areas?
- How are these problems affecting the company’s potential for growth?
- Does the company follow best practices in financial matters?
- Do you have the right people in leadership positions with the required capabilities?
- Are you able to attract and retain quality employees?
Undertaking too many initiatives can overwhelm a team and create a lack of focus. Resources are limited, so prioritizing initiatives that will bring the biggest return to the company will reduce time, energy, and misdirected money. Based on your analysis of the key drivers that enhance your business value, identify those areas that, if acted upon, will bring your company the “biggest bang for its buck.” Where are your gaps and what steps can be taken to close those gaps? Do areas of risk exist that will hinder your company’s sustainable growth? Address your specific challenges for growth by focusing on the highest priorities first.
Set Measureable Goals
What will success look like? Employees are motivated to actively contribute to the success of the company when it is clear what they are working to achieve. Consider setting SMART goals – goals that are specific, achievable, realistic and timely. A specific goal should answer “who,” “what,” “where,” “when,” and “why.” Establish concrete criteria for measuring the progress and attainment of a goal. Be sure that the goals are important and are realistically attainable within a specified time frame. For example, a smart goal for margin growth may be, “We will increase the gross profit percentage on the blue gadget product line from 45% to 50% by December 31, 2017.”
Invest some quality time working on your business, now. Clark Nuber can help you get started. We can work with you and your team to identify opportunities for business growth and the top risks in achieving that growth. This first step can provide focus to your strategic planning sessions, leading to an effective and valuable use of your time and resources. Preparation is key to year-end planning success.
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