Now is the time to be planning for 2010.
Many businesses have survived 2009 by cutting back wherever they can, laying staff off, cutting marketing and in some cases dropping services or products from their offerings. In some circumstances this can be sensible and even unavoidable but there comes a point where you should get back into positive development mode.
Most pundits agree that the economy is going to be difficult for some time ahead but that 2010 will be better than 2009 – so what are you doing to make 2010 a good year for your business?
My clients are now working on their plans for 2010 and the most important part of that process is to decide where you want to be at the end of 2010.
Would you try to plan a route without knowing your destination? Of course not.
Business planning is the same.
It used to surprise me how many business owners and directors turn up to work each day and do whatever needs doing. These people end up wherever they end up – they are the ones who wait for their accountant to tell them whether or not they had a good year, always assuming the bank has not closed them down in the meantime.
Without a longer term plan how can you set short term direction?
So – first set your longer term plan then decide where you need to be at the end of 2010.
Next consider how you will get there.
Do not assume anything. 2009 has caused many people to take a long look at what they are doing and how they do it – have you gone through this exercise?
Review your Business Model – how could this be improved? Could franchising or licensing be an option for developing using other people’s cash and resources?
What could you be doing differently now to meet one or more of these objectives?
- market needs have changed in recent time
- you can provide the same or better service at a lower cost by doing it differently
- you can offer your customers something better by doing it differently – an excellent way of protecting your market share and increasing your share by taking business from those who stand still
- taking advantage of new technology to reduce costs and/or improve service
- sell more to your existing market place and customers
- find new market places for your existing range of services or products
- market more effectively – ie use a different method to get your message to your target customers more cost effectively, especially using digital marketing which can be targeted and low cost
Get your management team and your staff together – engage them in this exercise – there may be some great ideas they have that you could adopt or use as the basis of change. Challenge them as well as yourself to find improvements to implement in the next few months.
Once you have identified your destination and the things that you will do differently, prepare monthly P&L and Cash Flow forecasts.
Do a reality check – can you operate within the projected cash flow?
Is the projected level of profitability satisfactory? If not, revise your plans until they are right for you.
Set targets to improve sales and profitability and do some “What If” calculations.
Then prepare your marketing plan to generate the leads you will need in order to hit your sales targets. You will need to know your conversion rate for leads to sales to do this. Cost your marketing and check it against the marketing budget you put into your financial projections.
Review your sales process ie how will you close the enquiries/leads you have generated into sales? Review your sales team and individual performance. Reality check – how confident are you of hitting your sales and profit targets?
[Tip: Check your sales team remuneration package - are you motivating them to bring in the results you need eg if they are commissioned solely on sales, are they discounting in order to sell more so that they get their commission but you do not achieve your targeted margin and profit? Clients have significantly improved profits by spending some time getting this right.]
Break your sales and profit targets down and allocate to each person involved in sales – give them each their personal sales and profit target and monitor regularly.
Do the same with whoever is responsible for marketing ie lead generation.
This way you can monitor that you are generating the leads and converting to sales in line with your targets. If not you better do something about it.
Do an Operations Plan ie how will you deliver the targeted sales at a consistent high level of customer service? How will you measure the service you are providing?
Review your Management Information Systems – are they providing the data you need daily, weekly and monthly to monitor and manage your business and take decisions? Are your systems set to provide this information accurately and simply (ie cheaply)?
[Tip: Is your Chart of Accounts as per the accounting package you use for your management accounts or has it been set to match your business streams so you get the data you need at the touch of a button? Clients have improved their profitability by having the right information easily available.]
What other system issues would improve the effectiveness of your business and help you deliver consistent high quality service?
Look at your People Plan – are the right people doing the right work? Is your work flow the most efficient it could be? Will you need additional people at some point? If so will you recruit or promote from within? Have you got training and development plans? Succession plans? What training and development have you planned for yourself?
[Tip: Most importantly - are you freed up to focus on the areas where you make the biggest impact in your business or are you wasting time doing stuff you should not really be doing? If so, why? Clients have improved profits after they used a simple method I have developed to assist them to delegate everything they need to in order to focus on thee where they make the biggest impact.]
And now – a biggie!! How good are your leadership skills? How will you lead your team to ensure they hit all the targets you have set? Is there anything you could be doing to improve your leadership skills? How can you improve results?
FINALLY,
After following these steps and tips you should have a set of plans which all hang together and you should also have the means to monitor progress in order to make any adjustments in the light of positive or negative variances.
You should be on your way now to a great 2010.
As usual, if you want to follow up anything here do please get in touch by phone to 01423 550787 or email me at Profit@nextlevel.org.uk or visit our website to see how we can work together.
Have a good year,
Brian
Brian Allmey, Next Level Business Solutions Ltd
