Five good reasons to spend January getting your plans in order
Now that the festive season is over, it's time to get serious about the new year. The start of the year is a time of new resolutions, so the first few months are also a good time to reflect and take stock – and make sure all the good intentions from the beginning of this financial year come to fruition.
"Many of our clients use the new year period to review their plans for the next year," says David Gonano, Macquarie's National Head of Sales, Business Banking.
"For many small business owners, it's the only time to get away from the busy-ness of running the business, without the distraction of staff, emails and phone calls."
Gonano says it's important to get a fresh perspective, and take some time to reflect on the successes and learnings of the past year.
1. A business plan is a living document
It's well known that planning is the key to a successful new business venture, and that it is an ongoing and ever-evolving process. So if you're one of the majority of small business owners without a documented and detailed strategy1, January is the best time to get one underway. You have time to put it in writing and time to start implementing your ideas. "This is a chance to get your thoughts together," says Gonano.
2. Make time for a business health check
Take a look at your performance data for the past year – both quantitative and qualitative. Did you meet targets for revenue, profits, sales conversions and efficiency measures? Have you considered staff and client satisfaction? A review of these areas could highlight potential opportunities or threats to your business.
Gonano recommends: "Look at what you set out to do this financial year, what you have already achieved, any obstacles that have prevented you from reaching those goals and any missed opportunities."
3. Understand where you are and what you need to do next
What should you focus on first? It depends on your business life cycle stage.
"If you've been busy making acquisitions, it is important to consider how the integration into the business has gone and identify areas that may not have proceeded according to plan. It may also be time to review whether you are achieving the anticipated economies of scale," says Gonano.
"Some of our clients have had a stunning start to the financial year," says Gonano. "For them, this is the chance to build on that success, consolidate growth and not lose the momentum. Those businesses may want to review full year forecasts and set their sights higher, so they don't lose the full potential of the work they've put in."
Alternatively, if it has been a tough start to the financial year and you've found it hard to grow fees or revenue, you may want to look at your cost structure. Can you make processes more efficient, or find new ways to grow revenue through more profitable or diverse products or services?
4. Test out new ideas before you start investing
Seeking professional external advice is a critical stage in developing or revising any business strategy. It's hard to plan on your own and often talking with your accountant, financial adviser or banker will open your eyes to new options or better ways of making something happen.
"At Macquarie, we often have co-development conversations with clients," explains Gonano. "We'll talk in general terms about their business strategy and open up discussions about new ideas – and we'll challenge and assist them on these."
He says in one recent meeting, a client was weighing up three or four growth strategy options. "We helped them to identify the one standout idea that would have the most impact, and we planned how we could also support them in implementing that initiative, through our expertise, network and technology platform. Having too many options often results in progress on none - focus is important."
5. Be prepared for new market conditions
With subdued business and consumer confidence, and concerns about lower than expected economic growth as Australia transitions into a post-mining economy, small business owners may be feeling cautious about current projections or investing in growth. However, the outlook also varies by sector and as Martin Lakos explains this month in his economic outlook, lower input costs including energy and interest rates could offer signs of hope.
"One thing everyone seems to be agreeing on is that interest rates could come down further in 2015. The economy may be softening, yet we're seeing many of our clients growing. Real estate has had a fantastic year, for example," says Gonano.
So if you have some time to think and reflect at the beginning of this year, use it wisely. Read some of the latest industry forecasts and analysis, check how you're tracking against the rest of the market and look at what your competitors are doing. You'll be in a better position to make smart decisions.
Your January strategy checklist list
- Get advice from your accountant or legal adviser before making any major decisions and discuss what options are available with your banker
- Consider asking someone to be your mentor – use your business network, it can be an informal arrangement
- Take the opportunity to read something different and interesting – catch up on overseas trends by reading global magazines and understanding the macro factors affecting your business
- Set measurable goals and assign responsibility and deadlines for new projects
- Take some time to focus on your health, relationships and family as these are important and often the main reasons many of us are in business in the first place