There’s no let up in small business, is there? There’s barely a pause between the end of one year and the beginning of the next. As a new year begins, it’s tempting to just keep running, doing the same things all over again. However, it’s critical to stop and reflect on last year and what you want to achieve this year. There are a number of areas you’ll find useful to focus on when planning for the year ahead as a small business owner.
It’s vital to be aware of what’s happening in the market – not just in your industry or location (important as that is), but also in the wider context of national and even global economies.
Over the last few years, we’ve all seen the devastation that can be caused globally by a single industry. So, it’s useful to take a view on the general economy before going any further.
After that, explore what the latest trends are in your particular market place. Are prices going up or down? What are recent innovations? What are your competitors doing? This valuable insight will give you the right context for the rest of your planning.
2. Threats and opportunities
It’s also useful to consider any other threats or opportunities. Have competitors released new products that are more advanced than yours? Have you just hired a big hitter? Has your main rival just won a huge account? All of these things should feed into your planning process as they’ll influence how aggressive or defensive you can be and what sort of returns you could expect.
Based on these considerations, you’ll be able to take a view on whether you should plan for shrinking, stability or growth. As you consider the next steps, you’ll be able to refine how much change in revenue you could expect and plan for.
Whilst revenue is linked to profit, there are also other considerations. You may be happy to accept very low profits if you are re-investing into the business for future growth. Or, you may have investors who are demanding to see some healthy profits and dividends. Or, you may wish to generate substantial profit so as to better weather a storm you’re predicting in the economy. Whatever your position, this topic needs careful thought.
Whatever products and services you provide, you can’t afford to simply ignore them. Some may be cash cows and need protection. Others may cause huge losses and need to be removed. Some may be in their infancy and need investment, whilst others may be mature and need re-invigorating. Whatever the situation, don’t ignore products or services when planning.
Finally, it’s valuable to analyse the resources at your disposal. Are they as effective as they could be? Are they as efficient as they should be? If not, now’s the time to plan to change that.
After careful thought (and conversation) about the above, you’ll be in a much stronger position to write up your plan to share with the rest of your small business. Happy New Year, and happy planning!
Heather Foley is a consultant at etsplc.com, a bespoke provider of HR software and services