Many people set personal New Year’s resolutions, but small business owners should also consider making resolutions for their company. Here are four resolutions that will help your business improve and grow over the next 12 months.
1. Set small and big goals to reach your ultimate goal.
It’s nice to have an ultimate goal, but intermediate goals are just as important. For example, when President John F. Kennedy promised the United States would put a man on the Moon before the 1960s came to an end, it was a clear ultimate goal. But at the time, no one knew how it would happen. Reaching the ultimate goal of stepping on the lunar surface required setting and achieving many smaller goals along the way. If your ultimate business goal is to reach $5 million in sales and your company is currently at $1 million, where do you want your sales to be next month? How about six months or twelve months from now? What can you do today that will take you one step closer to that $5 million?
2. Publish and reward results.
Who are the top performers in each department? You should know, and so should your employees. Track their performance, make a list, and post it where everyone can see and compare the results. Keep it updated and reward those who perform well to encourage others to follow their example. The incentive doesn’t have to be a monetary bonus. Ask your employees what kind of rewards they prefer. It could be as simple as priority for vacation time or shift selection, extra time off, or a gift card to a favorite store or restaurant (which you can often buy at a discount).
3. Create detailed financial statements on a regular basis.
Commit to reviewing your business’s balance sheet and profit and loss statements on at least a quarterly basis. If sales are up, but profits are down, you don’t want to wait six to twelve months to find out where the problem lies. The fresher the data, the more accurately you can use it to track trends, make sound predictions, and keep your business in good financial shape.
4. Compare your company’s financial performance with similar businesses.
Every industry has a baseline for profitability, margins, and expenses. These numbers are compiled using data from many different businesses within that industry and published in industry reports. Is your business above or below average in certain categories? What effect are discrepancies having on your bottom line, and how can you improve? Good sources to get these numbers include your local library, Chamber of Commerce, or the Small Business Administration (SBA).
As 2015 comes to a close, it’s the ideal time to think about where you want your business to be at the same time next year. Cougar Mountain’s Denali accounting software can help your business reach its maximum potential in 2016. Contact your Cougar Mountain sales expert today at (800) 388-3038 for a business accounting demonstration.