Most economists are predicting growth in the economy in 2014. So what should you be doing over the next few months to strengthen your business and get it ready to take advantage of any upturn? The most profitable businesses we act for have two key things in common:
- They plan and budget ahead and monitor how they are doing monthly
- They understand that in business, as in life, unexpected situations arise and they need to have spare resources to protect themselves or to invest in a new opportunity.
So what should you be doing now to plan ahead?
It’s a good idea to set aside a half day for this activity and have a good think about where you want your business to be in twelve months, what your turnover and profit would be and write these down.
Remember the easiest way to grow your business is keep your existing customers happy, so ask yourself “How are we doing in this area, what are our competitors doing, can we improve, how do we get recommendations from existing customers, how do we exceed customer expectations? “.
Consider how you attract new customers to our business, what marketing do you need to do and who is going to do it?
Write an action plan and EVERY MONTH review how you are doing against the plan, use this plan as your key indicator of how well you are doing towards your annual target.
What if something unexpected should occur?
Plans change, sometimes for the good and sometimes the other way. The first rule of business is always put some of your profit away for that unexpected opportunity or event.
How much should you have in reserve? This depends on a whole variety of things such as the volatility of your industry, market conditions and your own personal circumstances, but as a rule of thumb, think about what would happen if you lost your largest 5 customers? What money would you need to have in reserve to go out and replace them?, or if you have many smaller customers what would happen if your suppliers went out of business, what would you need to resource the product elsewhere? Essentially think about the risks you face that you cannot insure against.
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