Business clients, as we take off running for 2021, we want to set you on the right path to grow your business. My key advice for you is to “Plan to Monitor.”
You need to have general revenue and profit targets for the year, and you want to set them now. I understand that this is a little but daunting, considering COVID, but we are talking about getting your big picture in view. Think in ranges, not exact numbers.
Step 1: Big Picture Plans
Although we are not sure when we will get normalcy back, we need to have some idea of what we are expecting and hoping to achieve this year. Take a look at the key areas of your business, whether it’s hiring, pricing, personnel, marketing, fulfillment, administration, or ordering, or all of the above.
The key is to be proactive, not reactive. Have some plans in place. We need to have some understanding of our expectations and of our overall financial situation.
Step 2: Make a Forecast
Do a review of the last two years and compare them; analyze them for a conceptual forecast for 2021 so that you can approach things intelligently.
Step 3: Identify and Track KPIs
“Planning to monitor” means that we want to keep the train moving to a destination. We want to identify our key performance indicators (KPIs) and evaluate whether we are on track and continue to make good decisions. Don’t get into April and think, we have no idea if we are doing well because we didn't set up any targets.
As business owners, we are often tempted to put it off until we feel like we really need it. Why should we do some planning now? A few reasons:
Up-to-date numbers allow you to inform your strategy and to make good decisions throughout the year.
Bookkeeping in retrospect is a hassle; you may not be able to capture everything - sales and client acquisition are difficult to record in hindsight.
When you set processes in place and keep on top of it, you get to access the information you need when you need it.
Other businesses - banks, CPAs, etc., - are better able to help you with accurate numbers.
If you need help with any of this - the big picture, setting up goals and targets, monitoring processes, decision making based on financials - we are here to help and would be glad to sit down and talk with you. Please reach out anytime.
Photo by Lukas Blazek on Unsplash