Setting goals at the start of a new year is the norm for quite a lot of people, but as a sole trader or small business owner it is easy to continue business as usual without pausing to review the previous year and set new targets for the year ahead.
Whilst this might work for some people, I personally think it’s definitely worth the time and effort to put pen to paper (or fingers to keyboard) and write out what you aim to achieve in the New Year. Not only will this give you a focus throughout the year, but you can always check back every quarter or every month to make sure you’re in tune with your master plan.
I’ve got a few tips of my own which could help shape up your business in 2010.
1) Set SMART Goals:
Just as it makes sense to plan your route before embarking on a new journey, it also makes sense to plan out the next level you want to take your business to. This is because again like journey planning, you could get to your destination faster because you know exactly where you’re going, and probably more importantly how you’re going to get there.
When setting your goals, make sure they are:
* Specific – Your goal should be clear and concise. I want my business to be profitable in 2010 is not as specific as I want a 10% increase in profit margin at the end of 2010.
* Measurable – You should be able to measure your progress. A good way to do this is to break down your goal (a 2.5% increase in quarterly profit and repeated every quarter will make a total 10% increase at the end of the year), and set a criteria to measure your progress (total increase in sales or ROI maybe?).
* Attainable – To achieve the 2.5% quarterly profit I need a 10% increase in customers each quarter. If a 10% increase in customers per quarter is not attainable, then it’s back to the drawing board.
* Realistic – I want to increase my business’ profit margin by 300% is probably not realistic unless you have the resource and budget to really drive your business forward. A realistic goal is one that’s achievable.
* Timed – Setting a date by which you aim to achieve your goal makes it easier to review your success.
2) Profit not Turnover:
A business with a £200,000 turnover and a 10% profit margin is actually worse off to a business with a £100,000 turnover and a 30% profit margin. It’s not really about how much you make at the end of the year, but how much profit you make.
Look at ways to cut costs, increase your rates, launch new products at little or no cost to you in order to increase your profit margin at the end of the year. It might even make sense for you to do away with less profitable customers that eat into your profit margin.
3) Watch Competitors Closely:
As a small business owner, it’s very easy to get wrapped in your own world, but it is imperative you regularly take time to review your competitors and see what they are doing better than you, and what you are doing better than them.
If a customer leaves you for a competitor, ask them to give you a review of your business. It might even be worth signing up as a customer with your competitor in order to get an insider view. You could learn a thing or two that’ll make your business a whole lot better.
4) Time is precious:
Cutting cost doesn’t always mean letting go of your staff. It might make more financial sense for you to employ staff to do more of the day to day administration whilst you go out and chase for new contracts or clients.
Trying to do everything yourself could actually be more expensive than you think. If you can’t afford to employ full time staff then you could consider outsourcing.
5) Take time out:
Yes I know, probably not what you were expecting. But there is truth in the old adage that all work and no play makes Jack a dull boy… and probably a less productive one as well. 😉
Take time out to relax, a stroll, a holiday away from this crazy snow, or even a day out with your staff. You’ll probably come up with more ground breaking business ideas with a clear mind than a clouded one and tired body.
That’s it from me. Are there any tips that work for you and your business that are not on my list? I’d love to hear back from you, just post your reply to this post. 🙂
Goodluck, and all the best in 2010!