Where will you take your business in 2018?
Growth strategies and some issues your business might face
The question asked is not ‘where will your business take you’. The focus is on creating your own future. All too often people are reactive, going where their clients take them, rather than having a vision and following their own ideas, goals and ideals.
GOAL SETTING FOR 2018
I’m a massive fan of setting goals and writing targets on a page. Often we hear the phrase ‘Goals not written down are just wishes’. I believe this is true. Perhaps you manage well without written goals but if it’s something you haven’t ever tried before, I’d encourage you to give it a go.
Without being very clear on our goals, how do we achieve them? I’m sure I would find it hard. The statistics on written goals being achieved are numerous.
One of the biggest problems can be; ‘where to start?’ Where do we aim; and how do we create a vision?
These questions are answered by you, the business owner. It’s up to you to create the future for your organisation, no matter what size.
While I’ve always had written goals, the book ‘The 12 Week Year’ by Brian P Moran and Michael Lennington, had a few features to goal setting that I really enjoyed putting into practice recently.
I always held myself accountable by reviewing goals and seeing how I was getting along every few months. However, the book introduced scoring tasks and having two-week reviews. Block booking time is not new to me as a professional, however, I found after reading the book, I managed to block book more time to the various tasks. Once tasks were allocated to a specific period (with a score), I actually got through them quicker than I had expected (and I do mean a lot quicker than I expected!).
In order to have a different (read: better) year than the year almost at a close, it is important to do new things and do them differently (more efficiently) if possible. We all know this but when do we allow the time? Most business owners are full time busy and taking the time out to work on our business, instead of in it, gets neglected unfortunately.
If you’d like to take time out to review your business plan for 2018 and beyond, get in touch. I love working on goal setting and breaking down larger goals into manageable weekly tasks. If it’s something you think would be beneficial to your business and you personally, give me a call. Taking the time before Christmas or early in the New Year to get your creative juices going is a great idea.
Personally, I enjoyed setting new targets before the end of the year. While statistics show that many businesses meet year end targets right at the year end and there’s a massive push to get to the goalposts, I find November and December tougher to keep the motivation up. I’m enjoying going into December with goals listed and deadlines made. To be honest, I’ll most likely have the full Christmas break away from thinking about anything work related. I believe taking time off to relax is probably the key to staying as focused as I do during the work weeks and months.
GROWTH PHASE CHALLENGES
While you may be aiming to grow your business throughout 2018, there can be pitfalls to watch out for. Some challenges businesses face in growth phases are listed;
1 Premature scaling
This has been identified as one of the most consistent predictors of start-ups failing. It’s often described as simply doing too much too soon. You just aren’t ready. For example, newly hired staff can be a challenge and if the wrong people are in place, it can affect the culture of an organisation. Keeping your culture, ethos, values as your company grows, is tied to hiring the right people.
2 Cash flow challenges
Often growth will mean spending cash up front, sometimes well in advance of seeing the revenue come in. Keep a close eye on the cash flow of the business in a growth phase and don’t take your eye off this particular ball.
3 Loss of focus
One of the biggest risks with growth strategies is losing focus. When we focus on something new or different, it can naturally take our attention away from our normal day to day. Not looking after existing customers or clients can lead to serious difficulties. This may happen by overstretching the staff in place, by not having the appropriate systems to deal with a higher-level sales volume etc.
4 Not adapting quick enough
If you see signs that something isn’t working as a small entity, being able to make changes quickly is a great advantage of the size of the business. Being slow to react can cause serious difficulty in the growth phase of a business. In smaller companies there is an ability to be very reactive. To implement change as soon as needed. However, as a business grows, that process may become slower. Getting everyone onto the same page when a business is that bit bigger can be a challenge in itself.
5 Not understanding your financial position
Clearly close to my heart as an accountant, but when a business is small it’s easier to have a good handle on the finances. As you grow however, it can become difficult to have a handle on exactly what is going on. If monthly management accounts are becoming a necessity, ensure you get them on a timely basis. Know what is going on financially.
Keep on top of various taxes and know when thresholds are breached, if they apply to your business (for example a small business changing VAT status. It may affect your pricing model).
6 Focusing on sales and not profit
While chasing a growth strategy, it’s really important to be aware of the bottom line. Only focusing on sales can have serious consequences to a business. Many entrepreneurs get caught in the sales trap. Growing turnover being the only focus. Understanding your gross profit level and net profit level at the end of each month is key to decision making. As always, knowledge is power and keeping on top of your cost base (as well as the turnover level) should be the focus.
The key when facing these challenges, if you recognise some signs noted above, is to slow down a little. Take some time to get the corrective action in place and then put the foot on the gas again. Knowing when to slow down is as important as knowing when to scale up.
Wishing you a successful and productive end to 2017.
To get in touch, review your 2018 plans, or general accounting or tax queries, email: Wendy@williamsmerrigan.ie