Note: This article appears in the January issue of A&E magazine.
Welcome to 2019! Are you ready to get it started off with a bang and set yourself up for a great year? Regardless of how 2018 went for you, we need to put planning at the top of our to-do list to ensure continued success or to jump-start the success you see yourself having this year and years to come. Hopefully, you have a business plan that is the framework for your annual planning, but I would like to share with you two important things looking ahead into 2019.
TO START WITH…
Data-Have you ever hear the cliché “you manage what you measure”? It is a cliché because it is true and has been proven over and over again. To properly manage a business, especially in today’s digital world, you have to have good data to make sure you are managing it efficiently. I do believe that our gut instinct can be followed, but since your business is most likely also your livelihood, would you not want to have some data to back it up and make you sleep better at night when you have to make a major decision?
Having the right data can be crucial to success or failure; each company is going to have different KPIs (key performance indicators) that they use. Use this time to start with accurate data and make sure you are measuring the right things. Start by making sure your data is tight. Most companies start with the strategies and projections then figure out the data they want to measure that is going to prove their strategies and projections correct. But that can lead to failures later. For me, I start with the data and let that set my strategies and projections.
Now I know all of that sounds like corporate jargon and not something that relates to your business, but that is not the case. This type of measurement and management strategy works for companies big and small, plus is simple to implement. Start by figuring out what your biggest weakness was (or if you are a new business, could be) and then pick out a possible data point that could show improvements as you make changes.
Let’s say your production had a lot of spoiled goods last year. Figure out a way to not only count the spoiled goods, but also categorize them as to the cause. Then, you can implement changes and see how those changes affect the number of spoiled goods versus the number of products delivered to your customers.
On the flip side of things, figure out your biggest success last year and again pick out the right data point. For example, say you gained a lot of new customers last year. Determine how you got those new customers (social media, word of mouth, etc.) and then figure out how to do more of that.
At a minimum, measuring and managing your weakness and your best success puts you ahead of the competition. You can also keep going up and down the ladder on both sides to find the right mix of measurements to start planning new strategies.
AND SECONDLY…
Budgeting-No good planning session is fun without breaking out the budgets, right? Okay, who am I kidding? For many of us (me included), thinking about a budget and putting numbers down in a spreadsheet, especially when those numbers can sometimes be closer to red than black, is not what most people call fun. But fun or not, it is necessary, so why not make it the best experience possible.
Start with a time budget. No matter how much money you have in your bank account, you still have the same number of hours in a day, so let’s start our budgets on equal footing with our competitors. This can actually be quite fun as it gives you some realism to what is actually possible and helps keep you on track. The reason to track our time in a budget (as well as the financial budget we will talk about in a moment) is not to beat ourselves up over how little time or money we have. It is about overcoming the unconscious mind that leads us to watch the cat videos, or has us buy that shiny new toy even though it will not help you achieve your goals.
These budgets in our planning give us a mechanism to keep us on track in a concise way. So, put that time budget together and then figure out how you are going to most wisely use the time you have for each task at hand or figure out what help you need to achieve your goals.
The same goes for the financial budgets. Should you add that monthly charge for that fun new app that you really don’t need? Or, should you reinvest those profits into more influencer marketing or Facebook ads? This is a great time to really put your cards out on the table and figure some key things out about your business. What will it take in additional revenue to hire that needed employee, or how much more do you need to spend on marketing to get the number of new customers in that you want?
Then think about your inventory of goods/supplies. How much inventory do you need to have on hand to appropriately service the number of customers you have and the expected growth? You want to have the right amount to fill all the orders, but not too much so you are saddled with products you can’t sell.
For example, if you know anyone that needs an iPhone 4 sublimation-ready case, I have a shelf full of them. I didn’t plan accordingly and ended up with too much product I could not sell. On the other side, though, if you are selling holiday ornaments, you don’t want to run out at the end of November and hope a supplier has them in stock. There is a good chance you are going to have to search far and wide and even possibly deal with an increased cost due to supply and demand. These are important decisions that need to be planned out. By using a budget as a tool, it helps make the right decisions.
KEY TOOLS
By using those two key tools, you can successfully plan for a 2019 fiscal year that meets or exceeds your expectations. By planning or what some people call “working on your business, not in your business,” you give yourself the best chance for success. Yes, having passion, a drive to never give up, plus being stronger than your excuses can go far. But add a good plan to those things and zoom ahead as it gives you the guide rails to not have to suffer through so many pitfalls. While having the drive to get back up after being knocked down is great, why not plan ahead and avoid those holes altogether. Then, you can use that energy to keep moving forward instead of digging out of a blunder.
