For business owners, December is never dull! You will feel pressure to close sales, deliver product, schmooze with your prospects and referral networks, show gratitude to your employees, and close out your books for the year. However, amid the chaos of holiday hoopla, it is critical to make time for a detailed review and inspection to ensure fiscal fitness in the year to come.
The end of December is the best time to populate your 2018 budget with your actual results, as well as create your 2019 budget goals. You can examine every dollar of revenue and expense for the whole year – and use these to establish 2019 budget goals, as well as your plan to achieve them. (GrowthCast can provide you with some easy-to-follow templates to make sure absolutely everything is covered. Contact us for help.)
Here are some helpful steps and considerations to guide your 2019 projections:
1. Dissect and double down on the revenue wins. What has worked to source your highest
margin revenue? How did you attract and retain your best lifetime value customers? Focus on re-creating your best sales and marketing strategies and processes.
2. Analyze customer (revenue) vulnerability and adjust… or let go. Which client relationships might go away, and do they matter to your long-term health? What happened? Implement a plan to align your service delivery, pricing or products to these customers’ needs. Or send high-maintenance/low-return customers packing… in the nicest way possible!
3. Rationalize expenses at the line item level. Where are you bleeding? Can it be stopped? Which expenditures fuel sales, customer loyalty, growth of operations? Where could you negotiate better terms with creditors, vendors, etc.? Which items are core to your business? Based on your goals and 2018 outcomes, determine whether you need to trim or further invest in order to thrive in the next year.
4. Take a hard look at your total business model and viability. Is there, realistically, a
profitable future? Are there lines of business, employees or customers that are dragging down your success? Objectively determine where to divest or fundamentally change, knowing that this step can be difficult when you are emotionally tied to your business.
5. Make the most of cash. Are you carrying expensive debt you would like to decrease? Is
there an acquisition or investment in technology, people/experts or process improvement that would propel you forward? Conduct a cost/benefit analysis.
6. Inform yourself by reaching out. Have you had meaningful conversations with employees, trusted advisers, vendors, customers or competitors? Have you joined industry associations? Are you aware of changes coming ahead? What have you learned that surprised you? Make sure you operate beyond your usual day-to-day schedule to expand your knowledge base and drive fully considered budget decisions.
At GrowthCast, we’re hoping that once you’ve put in all the discipline to manage your business’s fiscal health, you will be able reflect on your successes with great satisfaction and pride.