After three years of constant change, and with the end of the year and the holiday season in sight, many business owners will be relishing the thought of some much-needed downtime. To relax, but also to think.
A new calendar year can give you the perfect opportunity to decide what improvements you can make to your business. So why not take advantage of time away from the daily grind to work ON your business rather than just IN it?
With a number of economic challenges on the horizon, it seems more important than ever to plan for your business’ future.
So, where do you start? The first thing is to work out where your business is right now. If you don’t know your current situation, you can’t plan adequately for the future.
SWOT analysis
A good tool to use is a SWOT analysis. SWOT stands for Strengths, Weaknesses, Opportunities and Threats. Strengths and weaknesses are internal issues within a company while opportunities and threats tend to be external influences.
A company’s strengths and weaknesses are generally found in the areas of personnel, finance, manufacturing and marketing.
Opportunities and threats tend to be a product of changes in the economy, technology, legislation or society that impact on your business.
In your internal analysis, look at your company’s current financial situation. With interest rates on the rise, look at what is good debt versus bad debt and minimise the latter. Good debt is where you have borrowed for new equipment or other ways to increase productivity; bad debt is where you borrow just to keep your business afloat.
With the current higher interest rates, consider new ways to service your loans. Shop around and see what other financial institutions are offering. If you can get a better rate elsewhere, see if your current bank can match it before you make the move.
Also on the internal front, look at your company’s pricing, particularly as inflation continues to rise. Are your higher costs being reflected in your prices?
Staff shortages
If you are suffering from staff shortages, consider ways that you can make working in your business more attractive to potential employees and to retain your existing workforce.
With many people still working from home, you may want to consider whether your premises are too big for your current needs and whether hot desking where desks are used by different people at different times may be an option.
Another consideration should be a comprehensive look at those areas of your business that are performing well and those that are lagging. Perhaps focus on those that deliver actual profits and downsize the poorer performers.
Small businesses often run into trouble because larger clients are slow to pay. The Australian Supplier Payment Code which was introduced back in 2017 is a voluntary initiative to ensure small businesses are paid within 30 days of sending a correct invoice. Ideally, make sure your customers are party to this code to ensure prompt payments.
You could also take advantage of this quiet time to look at your current marketing and how you can make 2023 a more profitable year. Digital marketing came into its own during Covid. How much have you adapted your business to this strategy? And what about your levels of data security. Is your database protected?
Plan for the future
Once you have looked at the business and areas that may cause concern, the next stage is to plan.
Again, an acronym can be applied to this stage: SMART, which stands for Specific, Measurable, Achievable, Relevant and Timely.
Your plans should be Specific, with identifiable goals rather than generic ones. These goals need to be Measured, so create a target figure. Your goals should also be Achievable, or you could set yourself up for failure. Your plan should be Relevant to your company and fit in with the business model. And lastly, it should be Timely so set a realistic timetable in which to achieve it.
Once you have set out a plan with the goals clearly identified, the next stage is implementation. How will you go about the task? Who will be involved in the goals?
Finally, you need to monitor your progress. With the rapid pace of change in today’s business environment, the goalposts may move.
If you want to discuss your business plan further to ensure you have covered all aspects, reach out to the FMS Team here.
