Robert Ellis talks us through his suggestions for the New Year.
Now that we are into the New Year it’s worth taking a few hours out of the business and deciding what you want to achieve in 2017 in both business and personal objectives.
You need to set out the strategic objectives for the business and write them down on no more than an A4 sheet of paper and then prioritise them.
You also need to address any issues that are holding the business back from achieving those objectives. This can often be identified by asking the simply question, “What are the most important things for the business right now?”
Keep it simple and avoid the mistake of being unable to make a decision until you have a massive amount of information.
Often there is a clear way through and your need to undertake a detailed examination becomes too time consuming and therefore the decision never gets made.
Once you have decided what you want to achieve then you need to communicate those objectives to the team and monitor the monthly progress towards them.
Consider the financial impact of your strategic objectives and the additional costs in achieving them.
Do undertake a profit forecast for the new year. Look at the overall forecast without getting bogged down in the detail.
I focus on taking the results achieved in the previous year, adding on a percentage increase to sales and a percentage increase to costs of sales and overheads.
These are the key figures and start by examining sales and taking an increase of perhaps 10% on the previous year, 7% for a volume increase and perhaps 3% for a price increase.
This will show what your turnover will be. Consider staff costs - always a main expense to the business. Examine the need for additional staff in the New Year and the impact of salary rises.
Apply a percentage increase to cost of sales, particularly if your business is affected by the drop in value of the sterling. Look at your bottom line and see how much your plans affect the annual profit. Often you need to incur costs now perhaps through a marketing initiative or website development which will benefit the business over the longer term. New staff are bound to decrease profits and cashflow in the short term but should deliver future rewards.
2017 looks to be a promising year for business. The concerns of Brexit have less impact on us in the North West than in London. Be positive about driving your business forward and reaping the financial rewards.
Looking ahead to 2017
