The end of the year is upon and us and as we close out the year, here are three important planning questions a business owner should reflect on:
- Why did I get into business?
- What are my goals for the upcoming year?
- What processes, systems, and changes do I need to make for the upcoming year that will move me toward my long term goal?
Why Did I Get Into Business?
Most people do not get into business to create another job for themselves but rather have a vision of an end-game and what the business will lead to. For most owners, developing and growing a business is meant to be a vehicle to reach a destination or goal. What is your end-game? Is it to?
- Grow the business to a certain level and then sell it to retire.
- Pass it on to your children.
- Develop and retaining key personnel in place so the business can continue to operate and generate income without your presence.
These are just a few questions that will help clarify the purpose of your business. Whatever your goals and vision of the business are or what you want it to provide for you and your family, make sure it is clearly defined.
What Are My Goals for the Upcoming Year?
During the course of the year business owners are caught up in the day to day activities and loose track of what they are trying to accomplish, It is easy to loose focus on the yearly and long term goals of the business. The end of the year is a good time to reassess and reset your goals for the upcoming year.
- How many new customers do you want to have?
- By how much do you want to increase sales, margins, net income, etc.?
- Are there operational goals you want to achieve, such as a decrease in delivery time, an increase in yield, increased throughput, etc.?
- What are the customer satisfaction and improved customer service goals?
When developing your plan consider these questions:
- What resources will I need to achieve my goals for the business (increased personnel, outsourcing, or off-loading of work, additional capital, etc.)?
- Do I or my employees need to acquire additional skills, education, tools, etc.?
- Are there processes and systems that can be improved?
Share the goals with your employees and tie-in rewards for employees when key metrics are met. For example if Sally and her team are responsible for customer service and you have customers calling in repeatedly about the same issue that could have been resolved by the customer service rep with one call set a goal to reduce those repeat calls and reward your employees for meeting the goals and metrics set.
Work with your customer service reps to determine why the issues are not being resolved on the first call. Setup a plan to address the root cause. Based on the input from team members determine and provide the tools resources, training required to address the issue.
Finally, tie rewards to achieving measurable metrics. Put up charts and share information with your team members on how they are doing relative to the goals and metrics established.
The goals can be broken down to annual, monthly, weekly, daily or even shift goals. Have some smaller incentives and rewards for meeting the daily, weekly, monthly or quarterly goals and a larger incentive for meeting the annual goal. In this way you can involve all your employees to work towards a common goal and recognize and reward them for achieving the goals set.
What processes and systems are needed to help me realize my goals for the upcoming year and to meet the long term objectives of my business?
Most business owners are wrapped in their daily tasks and spend time working in their business rather than working their business. Michael Gerber, author of E Myth Revisited: Why Most Small Businesses Don't Work and What to Do About It, highlights a common problem of why most businesses fail - business owners think like a technician and not a business owner. They have a skill to do something, i.e., a mechanic, electrician, healthcare provider, etc., are good at what they do, and focus on what they are good at doing.
Here is an excerpt from Michael Gerber's book in regards to this subject:
"In the throes of your Entrepreneurial Seizure you fell victim to the most disastrous assumption anyone can make about going into business.
It is an assumption made by all technicians who go into business for themselves, one that charts the course of a business-from Grand Opening to liquidation-the moment it is made.
That fatal assumption: If you understand the technical work of a business, you understand a business that does technical work.
And the reason it is fatal is that it just isn't true.
In fact it's the root cause of most small business failures!
The technical work of a business and a business that does technical work are two totally different things!
But the technician who starts the business fails to see this."
Michael Gerber goes on to discuss the importance of moving away from being the technician of your business. He promotes developing a comprehensive system, as a franchise would, for every part of your business.
By clearly developing written procedures, policies systems and training manuals for every part of your business, it frees you from being master and doer of all jobs. It allows you to oversee the execution of your business stratgey and more effectively manage and monitor the growth of your business.
For you to be an effective business owner in today's current business environment you have to work and think smarter, manage resources effectively and understand what you want from the business. It i critical to setup effective and robust systems and procedures for the business to operate and function without you present. Otherwise, you are creating a more demanding job with a harder boss than you ever had previously.
As CPA firm committed to helping small business owners succeed, we are always looking for affordable value added resources to direct our clients to. One of the best resources is the SCORE organization.
It is a non-profit organization, and in their own words they are "...dedicated to helping small businesses get off the ground, grow, and achieve their goals, through education and mentorship."
Business owners are often faced with the challenge of building a business with little to no support structure. It can be a lonely experience for business owners trying to build their business.
SCORE can assist and be an integral part of your support network. It is staffed with over 13,000 volunteers and they operate over 300 chapters. Given their extensive network of knowledgeable volunteers, it is likely they will have someone with experience in your industry that can assist and help you.
Score provides business owners with:
- Free mentoring from volunteers who have experience in over 62 industries.
- Free confidential one on one counseling services. either in-person or via email.
- Free business tools and forms.
- Access to free or low cost workshops.
While a CPA and accounting firm should be always be an integral part of your team, consider also reaching out to SCORE and see what information, experience and knowledge they can share with you to help you succeed.
To assist business owners, we have put together a list of 20 key resoucres. Go here to get your free copy.
As a small business owner it can be frustrating trying to find trustworthy resources and support for your business. Fortunately, there are numerous resources that small business owners can take advantage of.
Best of all, many of the resources that business owners can tap into have either minimal charge or are free.
One place to start is the Small Business Administration. The SBA web site, http://sba.gov has a wealth of information for business owners. Included on the web sites is information about starting and managing your business, loans and grants and counseling and training resources.
Most cities have a Chambers of Commerce that will provide members access to business resources, contacts, business mentors, an opportunity to network and other resources.
In some cities, local colleges will work with the local business community to develop courses and training sessions focused on teaching the principles of starting and running businesses. For example, in Charlotte, NC Central Piedmont Community College (CPCC) has the Institute for Entrepreneurship (www.cpcc.edu/e-institute). Through North Carolina's statewide university system, business owners can tap into the Small Business and Technology Development Center (SBTDC). The SBTDC business counseling service (www.sbtdc.org) provides business counseling services to resident businesses without fee.
SCORE is another organization whose mission is to assist small business owners with starting and managing their business. SCORE (www.score.org) provides free business counseling services, courses and training sessions on applicable business topics. They are staffed with volunteers who have extensive knowledge and experience starting and running businesses.
If you are a small business owner there are resources available to you to access and assist you with starting or managing your business. Best of all many of these resources are either free or can be accessed at minimal cost.
We have assmebled a list of resources for small business owners that can be downloaded for free.