The new year is a popular time to make resolutions to improve our health or finances, but what about business resolutions? Have you ever thought about making resolutions for your business? Even if your fiscal year end isn’t January, the beginning of the year can be a great time to take stock of what has happened in your business. For the things that didn’t go so well, you can resolve to change them.
Resolutions can be a great way to get you back on track to reaching your goals. Below, we discuss some common business resolutions as well as what you can do to help ensure you keep those resolutions.
Types of Business Resolutions
Top personal New Year’s resolutions fall into the health and finance categories. Many people want to lose weight or make more money—sometimes both. Making more money is a top business resolution too. Other business resolutions include:
- Reducing expenses,
- Hiring more staff or finding better qualified staff,
- Streamlining processes, and
- Improving the bottom line.
Anything you want to change or improve in your personal life or business can become a resolution. The key to keeping your resolutions is to make them specific and understand the steps in achieving them.
Have Specific Goals
Let’s say you want to increase the revenue in your business. This is a great goal, but it’s not very specific. Science says we are more likely to reach our goals when they are specific. You’ve likely heard of SMART goals before. The S stands for specific.
A SMART goal isn’t just specific though, it’s also Measurable, Achievable, Realistic, and Timely. So, if increasing your revenue is your business resolution, you can make this a SMART goal like this: My business will increase its revenue by 20% (measurable) within one year (timely). This is certainly more specific.
To determine if this goal is achievable and realistic, you’d need to consider your business’s industry and your business’s history. Looking at industry data and trends can tell you if this goal is realistic. If no company in your industry has shown 20% revenue growth before, you may need to reconsider your goal. The market will also give you an idea if this is realistic. During an economic downturn, it can be very difficult to increase revenue.
By looking at your company’s history, you will have an idea of the achievability of your goal. For example, if your business has shown steady growth over its lifetime, your goal is more likely to be achieved than if your business has shown a pattern of growth combined with decreased revenue. Once you’ve created specific actionable goals, it’s time to take the next step to achieving them and create an action plan.
Create an Action Plan
You are also more likely to keep your business resolutions and meet your goals if you have an action plan in place. An action plan for meeting your goals involves breaking your goals down into steps.
How do you plan to achieve your goal?
If we circle back to the business resolution of increasing revenue, you’ll need to start by brainstorming some ways you can do this. A few ways you can improve revenue include increasing:
- The number of customers,
- Your prices,
- The amount of sales per customer, and
- The average transaction size (through up sales and add-ons).
The method you choose will depend on your business and if you are willing to increase your expenses in addition to your revenue. For example, to increase the number of customers, you may need to advertise more which will result in increased expenses for you. Increasing your prices doesn’t cost anything, but depending on the current market conditions, it may result in some customers leaving to find a similar product or service at a lower price.
You’ll need to investigate your options before choosing the steps in your action plan. If you’re not sure how to go about creating your action plan, then research should be your first step. This can involve contacting your accountant for their advice. A tentative action plan for our example might include:
- Research methods for increasing revenue,
- Book and appointment to discuss options with my accountant,
- With the help of my accountant, choose a direction that’s the best fit for the company,
- Create specific action items relating to the method chosen.
Even though you have a specific goal, the action plan drills down even further to help you discover how you’re going to achieve that goal. The keyword here is action! These should be steps that require you to do something.
If you’re unclear on how to make specific business goals or the steps you need to take to achieve your business resolutions, reach out. We’re happy to help you create an action plan.