At Duckett Ladd, we believe that long-term success never happens by chance. It is only through a consistent pattern of deliberate, strategic actions that you can create the business of your dreams. Strategic planning can be a very involved process, however, to get you going, we have noted six simple steps to start you on a path to being more deliberate (and hopefully profitable) in your business in 2017.
- Know Your Industry Standards
A good friend of mine recently asked “How is knowing my industry standards going to deepen my pockets?” My response: “Focus.” Knowing your industry standards allows you to focus on your weaknesses and exploit your strengths against your competitors. It provides you with a template to guide you to success. Helpful hint: Don’t thrive to be standard within your industry, thrive to be the Gold Standard of your industry.
- Develop Key Performance Indicators
Psychologist Abraham Maslow once said: “If your only tool is a hammer, every problem looks like a nail.” Most small business owners use their Balance Sheet and P&L as their tools of choice. What information does this provide you? More than likely you take a glance at your cash account, receivables, profit and maybe a couple of your favorite expense accounts. Add more tools to your belt by developing key performance indicators. Done correctly, KPIs will communicate the pulse of your business and aid successful decision making. Helpful hint: Struggling with developing KPIs? A quick google search of KPIs for your industry should get you started.
- Budget Effectively
Budgeting is like driving cross country. You can either map out the drive and hit every site possible to take full advantage of the trip. Or you can get out of bed, get in the car and start driving aimlessly. Hopefully, you hit a few of the sites along the ride, but most likely you’ll drive through hundreds of miles of corn fields. Budgeting maps out your business so you’re able to hit all of your destinations. Helpful hint: Ensure you review your budget to your actual results on a monthly basis. Know where you were successful and where you need to improve. Make changes to your spending as necessary to stay within your budget.
- Develop and Apply Tax Strategy
It is no secret that the largest expense for many small business owners is their tax bill. Tax Strategy is not an end of year phone call with your accountant. Tax Strategy is regular communication with your accountant to reduce tax and prepare the business for any lurking tax burden. Helpful hint: Set up an appointment with your tax professional now to begin discussing 2017 tax strategies. Constant contact with your accountant throughout the year should yield significant benefits as that dreaded tax bill takes form.
- Take Money Off The Top
It is becoming common practice for small businesses to automatically put away a certain percentage of every dollar that walks into the door. Parkinson’s Law states: “The demand upon a resource tends to expand to match the supply of the resource.” In other words, your business will use the revenue it is supplied with. Reduce the supply and you will be more efficient with your resources. Helpful hint: Start off small; no more than .5% to 1%. As your business begins to shift and function on less usable revenue, gradually increase that percent. Want to know more about this strategy and the principles behind it? Pick up the book Profit First by Mike Michalowicz.
- Review Your Financials With Your Accountant
According to a 2016 Intuit survey of QuickBooks users, “75% of small businesses say that they are more successful with an accountant.” Accountants are experts in numbers. Develop a relationship with your accountant and meet with them on a monthly basis to discuss the health of your business. Helpful hint: Require your accountant to challenge you. Make sure that they are asking the tough questions that will make your business better.
Even the most insightful business owner can’t manage every single detail alone. That’s why we developed The Hub, a complete consulting department dedicated to serving the needs of small business owners like you. We’ll be your eyes and ears when you need an expert to help you understand just what’s going on in your business.
Fill out this form to see how we can help you deepen your pockets in 2017
