Tag Archives: check list

It Was the Best of Times. It Was the Worst of Times. Budget Now. No Matter What.

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.

Becoming One with Your Customers – A 2-Part Series

Part II: Growing Customer Loyalty… and the Bottom Line!

Often, busy, multi-tasking, success-driven business owners build day-to-day procedures and norms that are internally focused. In other words, we build our businesses – from sales to service to billing – that are based on our business needs, norms and challenges, rather than the desires and behaviors of our customers. In the long term, this is a risky proposition. A cohesive growth strategy should be centered around a satisfying customer experience at all points of contact across the life of the customer relationship. What does this mean?

  • What do you do to ensure an ongoing relationship, referrals and/or repeat sales?
    • Do you regularly touch base with customers with value-added information or just friendly check-ins?
    • Do you provide your most valuable customers with special offers and service levels?
    • Do you proactively and consultatively offer additional services based on customer needs?
  • Put yourselves in your customers’ shoes and consider all the ways they connect with your company by phone, on your website and face-to-face. What are the possible “pain points”? How might these impact your success?
  • Finally, what 3-5 things can each and every team member do daily address any issues you identify and provide the best customer experience possible? What can the company change on a longer-term basis?

Make this an “awareness-building/kumbaya/peace and joy” exercise. No finger pointing. If you recognize the hurdles and prioritize the changes you can build solutions and create forward momentum!

Becoming One with Your Customers – A 2-Part Series

Part I: What’s it like being your customer?

Amid the year-end chaos that begins the moment the last piece of Halloween candy was handed out (or eaten surreptitiously at midnight – I won’t judge), it is incredibly beneficial for us as business owners and employees to take a time out. Reserve a few hours away from fighting daily fires. Gather your teams to reflect back and think ahead. Focus everyone’s positive energy on the ultimate source of your success – your customers.

Think about the following with your team: How would you assess the ease of doing business with you? Can your customers (or prospective customers) …

  • Contact who they need when they need them and through their preferred channel?
  • Understand their invoices and pay you conveniently?
  • Know what they are getting and what it’s going to cost?
  • Schedule service within a reasonable time?
  • Make optimal use of your product or service?
  • Find the information they need on your website and understand what you offer?

The little inconveniences may not seem like a big deal but, over time, they can add up to
dissatisfaction and attrition. Take stock and fix the small things, and you are on the path to
stronger relationships!

Four ways to assess your business health

With the start of a new year comes promises to become healthier. There are plenty of ways to assess your physical health (weight, BMI, cholesterol, resting heart rate, blood pressure, etc.)  Why shouldn’t we be looking at our businesses similarly?  When thinking about the health of your business, here are four areas to review when assessing.

Numbers – Of course I have to start here.  Do you know if you are profitable?  Do you know which of your services, products, and clients are more or less profitable?  Do you know what your cash flow need looks like?  Do you know what your customer retention rate is?  And the lifetime value of a customer?  These are all great starting points, and we’ll dive deeper in the coming months.

Customer Satisfaction – Do you know what your customers are thinking and saying about you?  Are they happy?  Thrilled? Or are they liable to jump ship as soon as there’s another alternative?  Are there other products or services that you could be providing them?  Are they referring you to their peers?  Talk to you customers, or rather, listen!

Team – Do you have the right people on your team?  Are they in the right roles?  Do you have a stellar assistant or number two that can take much off your plate? Are your people growing and learning more about your business?  Are you delegating effectively?  Without the right team in place, you can’t grow your business and keep your customers satisfied.  Having the right team makes everything else possible.

Mission/Purpose/Brand – Do you know why you’re in business?  Yes, you’re delivering a specific product or service, but what do you hope to achieve by delivering that product or service?  What’s important to you in achieving that?  I’ve lumped these three different topics into one for a reason – they are what make your company stand out.  If for example – if your mission is to make financial forecasting accessible to any small business owner, you’re going to use basic English in your communications – not a bunch of financial gobbledygook.  You’re also going to offer a reasonably priced product and not something that costs a mint and needs a team of IT specialists to “implement”.  If your mission is to educate the world on the benefits of sustainable farming, you’re going to be investing in programs that further your goals and not just selling the fruits (and vegetables) of your labor.  Keeping your purpose in sight lets you make decisions that are consistent and authentic to who you are.

These are just a few ways to assess the health of your business. Besides numbers, customer satisfaction, team, mission, purpose, and brand – what other areas do you look at when observing your business’s overall health?

As we plan to dive deeper into these topics each week, it’s important to try and answer these questions for the upcoming year.  Making your business strong in all areas will help with the financial and overall success.

Understanding Your Balance Sheet

Being able to understand the different types of financial documents and information your business has should help you better understand your financial position. Learning how to decode a balance sheet will help give you the tools you need to make important decisions about your business.

 

A balance sheet, or sometimes called a “statement of financial position” provides a snapshot of your company’s financial position on a given date. This statement gives you details of your assets, liabilities and equity – and is usually prepared at the end of a reporting period, such as a month, quarter or year.

 

The balance sheet is based on the basic accounting equation: Assets (value of everything the business owns) = Liabilities + Owner’s Equity (How the business paid for the assets). Most statements report assets in the left and liabilities and equity detailed on the right. They should both be consistent with the equation – having the same dollar amount for each side.

 

Assets –

Assets are best described as anything your company owns that has some sort of monetary value. Your assets are concrete items, such as cash and inventory – as well as marketable securities. Different types of assets are listed on the balance sheet based on how quickly they can turn into cash if needed.

  • Current Assets – Cash, inventory, accounts receivable, short-term investments and pre-paid expenses.
  • Fixed Assets – Long-term assets such as property and equipment. Cannot be converted into cash for at least one year. Depreciation must be calculated.
  • Other Assets – Intangibles, like patents or trademarks held (only if you know their fair market value).

 

Liabilities –

This is what your business owes, in order of how soon the payment is due. For example, liabilities reflect all the money that your business owes to others – including loans, wages and other debts. Just like assets, liabilities are also categories based on their due date in which you expect to pay them.

  • Current Liabilities – Accounts payable, accrued wages, taxes and interest due within a year.
  • Long-Term Liabilities – Mortgages, bank loans and anything due in more than a year.

 

Owners’ Equity –

Sometimes called net worth or net assets, represents the assets that remain after you deduct what you owe. Valuing a business can be extremely complex – the owners’ equity doesn’t always represent the current market value of your business. Depending on the legal structure of your business, such as if you’re a sole proprietor, in a partnership or have stockholders, can also reflect on your owners’ equity.

  • Owner’s Equity – The money you have left over after selling everything in the company and paying off liabilities.

 

Balancing Act –

Assets and liabilities should “balance” out. Typically, balance sheets include previous data for comparison. Calculating the basic financial ratios can track the performance of your business, identify trends and help implement the strategies of your business.

 

Data from other balance sheets compared with current ones can help guide you to an even more in-depth understanding of your business’ finances. Of course, I am here to help guide you through these complex statements and help manage your business finances for the future.

 

End-of-the-Year Checklist for Small Businesses

I love this time of year!  Thanksgiving is my favorite holiday.  It’s tempting to focus on holidays, traveling and family visits, but tend to forget about your businesses 4th quarter closing. Now is the time of year where your business needs your attention the most, especially when it comes to your finances. Keeping on top of the details between November 1st and January 1st will not only keep you on top of year-end closings but off to a strong start in the New Year.

 

Here is a checklist of what you need to do for your business before the end of the year.

  • Accounting – Make sure you’re maintaining excellent financial records throughout the year. By December, it will be extremely helpful for you and your accountant.
    • Running Reports – Take a look at where your business stands financially, compared to other years. You’ll want to run a profit and loss statement, a balance sheet and a cash flow statement. By looking at these reports will give you a good indication of where you are financially and where you are headed.
    • Analyze Cash Flow Statements – By looking at your cash flow, you can see how your money was spent throughout the year. There is three specific aspect’s that you’ll want to analyze:
      • Operating activities (revenue and expenses); investing activities (assets purchased and assets sold); financial activities (loans and repayments).
    • Vendor Information – Make sure all your vendor information is corrected in your system. Purge or disregard any inaccurate information or if you don’t need to reconnect with them.
    • Reconcile Accounts Receivable – Make sure you have a list of outstanding invoices or which clients still owe you money. Try to get these settled before the end of the year to give next year a fresh start.
    • Double-Check Payroll – Stay on top of any issues which may need your attention. Don’t forget to check any health and life insurance benefits as well.
    • If you have big purchases your considering and have a profit, this is an excellent time to make those purchases and reduce your tax liability.
    • Make an appointment with your accountant to discuss any other tax saving strategies you can take advantage of before year end.

 

  • Information Technology (IT)
    • Back It Up – Make sure all your account files and client files are backed up and secure. Have an external hard drive available or cloud-based system.
    • Back-Up Contacts – If you do most of your business over the phone or computer, make sure you back them up – even if you have to keep an old address book.
    • Download Files – Dropbox is perfect for keeping documents and reports as a back-up. The Golden Rule for data backup is 2:1 – create 2 separate digital copies in 2 separate places and 1 offline copy.
    • Evaluate Your File System – Creating a file-naming system is especially important in businesses, especially those share servers. Make sure any and all files are uniform to the method you prefer.

 

  • Human Resources
    • Bonuses – Decide if you want to offer a bonus or other end-of-year incentive before the end of the year. Doing it before January will impact your profits report.
    • Staffing Needs – Take an inventory of your current staff and determine if you’ll need to hire more employees for the next year. Make sure you budget these additional expenses in the upcoming year.
    • Collect Accomplishments – What milestones have you and your company accomplished? Acknowledge them and your staff for an outstanding performance.

 

  • General Business
    • Inventory – Make sure you conduct an inventory count before the year’s end and make corrections as needed. This is the time to make sure you are not only keeping accurate records but not experiencing any loss.
    • Make New Goals – Have you accomplished any of your goals this year? What about next year? How will your path be different for the upcoming year? Also – write down your financial goals and talk to a professional (like us!) about how to achieve them.
    • Check Your Website – When was the last time you did a thorough look through your website? Make sure every button works, every phone number is correct ad links are working properly. It’s imperative to make sure everything is in working order.

 

Closing out for the end of the year can seem like an overwhelming task – but staying on top of your business goals and finances will make next year a lot easier.

Still have questions? Email me at judi.otton@growth-cast.com to help plan your own check-list.