By Stirling Tavener, Senior Consultant, Anson Advisory
January is an important time for business strategy and planning for a successful year.
The new-year has just ticked over again, we’re half way through the financial year and we’ve just returned from a summer break – what should we be doing for our business? Depending on your industry, often January is a quiet time, if you’re not involved with post-Christmas sales campaigns. It’s a great time to really think and strategize how you’re going to improve your business, whether it be operational systems, increasing market share and turnover, improving efficiency and reducing your stress level, or developing a project you know will succeed you just need to devote time to it.
You should have renewed motivation after a break and if the break or holiday wasn’t long enough, a great question to ask is – Why? Was it because you couldn’t afford the time or money for a longer break, if so, you definitely need to be analysing what and how you conduct business to ensure it doesn’t happen again.
Did you know;
- 75% of businesses never prepare a budget
- 20% of businesses spend >16 weeks preparing a budget but don’t complete it by the start of the financial year
- 78% of businesses with a budget don’t even change the year at the top
- 85% of business owners spend less than 1 hour a month discussing strategy
- 60% of businesses don’t link strategy to the budget
- 92% of businesses don’t prepare ‘Strategy data’ to navigate the business
Some areas you should devote attention to during this period are:
- Review your budget – ensure your accounts are completed for December to give you accurate Profit & Loss data so you can see where your business is, compared to forecasted results. If you don’t have a budget, how are you going to allocate resources to increase revenue, if you don’t set goals and strategies?
- Set goals by identifying your expected profit in one, two and five years. Based on your historic or projected profitability percentage, convert this to turnover to give you an idea of the sales you require to reach that point.
- Strategize & Plan the remainder of the year. Are there events you should be attending, either as a patron or an exhibitor? Can you tie in an overseas business event with a personal holiday and claim some of the cost as a business expense? The North Queensland Field Days (27-28th May 2015) is a growing event, and are no longer just for agriculturally related businesses. The Cairns Home Show is 15-17th May 2015, which may present an opportunity for business development.
- Business development activities – whether they be via an event or an email marketing campaign with your existing customer database. Could you start a competition to generate sales leads? This doesn’t need to be costly, just well thought out. Some professional help may go a long way to ensuring every dollar spent resulted in multiple dollars profit.
- Advertising? Re-think your advertising budget. Have previous advertising expenses generated sales or increased brand recognition?
- Productivity – are your employees as productive as they could be? If not, identify why and address the problem/s. If someone is motivated, they are inherently more productive. It’s often as simple as working out what motivates them and re-aligning their Key Performance Indicators (KPI’s). An employee engagement survey can assist greatly, with multiple options available on-line. An external provider can often extract information an employer could not, and therefore provide much more useful information to hone employee performance.
- Business efficiency – are you double entering information at any point? Are you using technology efficiently? By ensuring every system and process is as efficient as possible, you free up capacity (staff or management) to concentrate on areas to increase profitability. It may be wise to have a third party entity revise your systems and benchmark your performance to industry norms.
- Book time with your accountant by the beginning of the 4th quarter to generate and implement any tax minimisation strategies. Accountants are generally quiet during January, so if you’re prepared early it may reduce the wait time.
Depending on your industry, and holiday plans, January can be a great time to review your business strategy and plan the coming year before school starts, everyone is back at work and life reverts back to ‘full steam ahead’.