The new year marks a chance to reflect on where your business has been, as well as where you hope to take it in 2020. So what can you do to stick with your business resolutions and make this year your best yet? Here’s how to prepare for a year of business growth and profitability.
Review the Previous Year
It’s easy enough to compare this year to the prior year to assess whether you’re growing and succeeding. This is just one metric. You need to look at the big picture. Don’t forget to assess:
- Marketing. Marketing should generate new customers. So a good way to measure marketing success is to assess customer traffic per investment in marketing. If this figure is growing, your marketing efforts are paying off. If it’s not, it may be time to either trim the fat or change your marketing plan.
- Sales. Every business compares one year’s sales to the prior year’s. Sales are not a metric; they’re a result. They don’t paint a full portrait. Instead, look at revenue per customer traffic. This tells you how attractive your products are, and how effective you are at closing deals.
- After-sale service. Customer satisfaction is vital to the success of every business. What are you doing to keep your customers happy? Look at open service per million in sales. More efficient employees can help drive this number down, improving overall satisfaction and hopefully strengthening your brand image in the process.
- Warehouse and delivery. Well-run back-end operations help you keep the promises you make. Consider assessing operation performance by looking at sales per operation employee. The key is to find the sweet spot of capacity. A growing business needs growing warehouse investments.
- Administrative. Your administrative staff is the face of your company. They may play a key role in customer support and act as gatekeepers at virtually every level. Try assessing sales per administrative employee to understand exactly how much business your staffing level manages.
Prepare for 2020
Running a business always presents a challenging balance: you need to make as much profit as possible, while also taking advantage of all tax deductions. Many businesses file tax extensions, but this is usually a product of lack of preparation. This delay can hinder cash flow because of larger than expected payments, unclear costs, and missed deductions. Instead of waiting until the very last possible moment, adopt these steps instead:
- Update financial statements for accuracy each month.
- Schedule quarterly meetings with your financial advisor and tax professional.
- Look at liabilities and assets on the balance sheet to identify items that may be retired or adjusted to reduce tax obligations.
- Review obsolete and damaged inventory, since it is often the biggest asset.
- Comprehensively review all available tax credits and deductions.
Identify Next Steps
Sprinting into 2020 requires decisiveness. It also requires reflection. Spend some time reviewing 2019. Look for performance gaps and areas of growth. Jot down any ideas as they appear, then consider pursuing the easiest and most beneficial ones. Moving quickly means quicker results. So start small, then build upon the smaller successes to embrace greater and greater achievement.
About ASG Partners
When you’re selling a business in middle-market manufacturing, service, or distribution, rely on the team with a combined century of experience in mergers and acquisitions: ASG Partners. We help you increase business valuation, prepare for sale, and close the deal.