It is that time of the year again when, as a business owner, you should take a step back, contemplate about the lessons learnt in the current year, and formulate concrete business development strategies for the coming year. An intensive drill-down will help you better understand the business challenges and implement ideas that will make your organization more productive. Here are some points to ponder:
Reflect and quantify Learning enables growth. Identify the areas where your organization went terribly wrong, areas where you could have done better, and finally the ones in which you achieved success. Enlist the factors that lead to the success or failure for each business initiative undertaken in the current year. Once you do this in a systematic manner you will notice patterns that will help you in resolving issues, identifying customer and employee behavior, isolating major areas of concern and ways in which you can strengthen the probability of success. Do this exercise for all functions of your business including customer service, operations, sales and marketing, employee management, administration, and finances among others. Involve your core team in this too.
As a business owner, it is important to believe in the principle that you cannot manage it if you cannot measure it. You might have implemented a lot of strategies related to your product or service, operations, sales and marketing, general administration, HR, etc. It is time to re-evaluate and make quantifiable assessments. Did your strategies generate real results? Think objectively: evaluate performance metrics; how far were the strategies implemented; did the people involved complete their tasks; and what was the result (in numbers and percentages). Measure returns for each investment made for the business. Evaluate the performance of your core team members and see if they are well aligned with your organizational objectives. Don’t hesitate to shake-up the process and make changes wherever required (and remember to measure the effect of those changes in the next year.)
Project your revenue Many small business owners neglect the importance of revenue projection. The revenue projection depends on the type of business you are in. Typically there are three different sources you can consider:
Current business: Projecting the revenue potential of current business is the easiest. It has a big impact if you business has recurring revenue clients. Businesses that have one time customers, can take their last few months’ average. Again, if your business is cyclical, take that into consideration.
Sales in the pipeline: This represents new or old customers you have opened discussions with for new business. For these potential future sales, make your best guess at the possible value of the business under discussion and when work might start, assign a probability percentage, and then spread the factored revenue across the appropriate months.
New business: This represents income from customers you have not met yet. This could be a category where you would favor using your prognosticating digit, but you can also make a calculated estimate by looking at your sales history and upcoming marketing efforts.
Reduce your expenses Isolate areas that are eating up most of your profits and productive time, these could range from operational changes, office administration, online/offline marketing management, payroll, etc. By utilizing simple tricks and outsourcing portions of these tasks to specialists you can save dollars while increasing efficiency. Try to remove yourself from the complications of all tasks that do not fall under your core competency. By outsourcing non-core yet important activities many small business owners have been able to expand their business faster while increasing ROI. Analyze your entire business operation and see which ones you can delegate to minimize the hassle of in-house management. Drill-down to the lowest possible denominator as saving even a few pages of printouts every day can save thousands of dollars in the long run.
Forecast your budget Be realistic with your budget forecast and set the ceiling limit that you won’t exceed. Categorize your budget for projected expenses in marketing, customer service, day-to-day operations, administration, payroll, new recruitments, employee benefits, rent, taxes, insurance, etc. Based on the learning that you had in the current year you can channelize your funds to the categories that give maximum ROI. Also keep unexpected expenditures and seasonal changes in mind as they might throw you off the course unless you have a solid contingency plan.
All the best for the coming year!
How Would You Steer Your Business in 2008? - To learn more about this author, visit Gourab Nanda's Website.
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I haven't written much in the Failure series lately, but I've got a doozy or two coming soon. 
