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Do you know your route for this year?

By Jon Peterman on 13/04/2016 - 0 Comments

Running a business can be analogised to taking a journey.  You will be most successful if you know where you want to get to, have the appropriate resources to get you there, plan your route, monitor your progress, sometimes cope with unexpected surprises on the way, and if you feel you are getting lost ask someone for help along the way.

As we are now into the new tax year, a large number of businesses will have just started the 2016/17 journey.  As with the analogy, prior to starting that journey I would advise business owners to review the journey of the previous year, look for the lessons to learn and put a plan in place that takes those learnings in to account. If you have planned your business journey for this year then well done, but still read on as you may get diverted and the advice below will help you stay on the right road.

If you have no route planned for this year then here are some simple steps to take that will set you on the right road,  That’s the end of the journey puns for a bit.

Before you start the make sure you know where you are going so either review your vision statement or create one. This is I am afraid a whole topic in itself but basically think through what you want out of your business. Start by reviewing your performance over the last 12 months.  The key areas to look at in my opinion are revenue, costs, new client acquisition, team performance and financial control. Look to create some benchmark data in each of these areas, preferably split in to three month buckets.  The aim is to then set some SMART goals. These need to be SPECIFIC, make sure they are MEASURABLE, ACHIEVABLE and REALISTIC, and finally that they are TIMELY.

So looking at the key areas I mentioned above here are some examples to get you going.

Revenue:

If appropriate split this in to key product / service groups. Set down last year’s numbers, and decide on the percentage increase. If you have data over numerous previous years this will help. Also consider market trends any new offerings you have etc.  Be careful with the Achievable and Realistic elements.  This does not mean set easy goals. I believe a goal that feels like it is just out of reach is most effective as it provides the incentive to push that little extra. I was with a client recently who I have set a 25% year on year revenue increase. I believe this fits the ‘just out of reach’ category.  One of the owners was genuinely concerned and pointed out activity in last year’s numbers that he knew was not going to be repeated this year.  However talking through it some may be repeatable and of course some was not known about this time last year. At the end of the discussions the target remained the same.

Revenue is of course not the ‘be all and end all’ so here are some thoughts on the other areas to set goals for.

Costs:

Review supplier agreements. Consider wastage levels both for commodities and time.  On the time front, for example, if you estimate a job will need x hours of labour was that accurate?

New clients:

A fairly easy one to measure and set goals for, of course don’t forget looking at more business from existing clients.

Team Performance:

This can be slightly harder to measure but if staff absence and turnover are high, that is a red light. Both can be measured and improvement goals set.  If you don’t do structured performance reviews it will be worthwhile implementing them. 

Financial control:

Of course there can be a number of things here but the most common one I start with is invoice management. Send them out in a timely fashion and keep track of payments.

Well I hope that has helped you plan your journey for this year.  If you feel you are a little lost ICON are here to help you get back on the right road.

Well I am off to Folkestone now, round the M25. Yes I have a plan and know my route, have a car full of fuel and know how long it took last time so I should be fine, but if I get diverted along the way I won’t be afraid to ask for directions.

Jon Peterman
ICON Business Solutions.

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