Starting a business is a huge achievement. But maintaining and growing your business is an even bigger challenge. In this five part blog post, we are creating a plan for 2017. The first step in the planning process was to look back and understand what worked and what didn’t work for you in 2016.
Next you need to consider what you are likely to encounter in 2017. The worst thing that you can do, as a small business owner, is to embark on a new business year without considering the challenges that lie ahead. You are likely to encounter them whether you plan for them or not. So again, lets increase your chance of success and understand what they are.
Now, none of us has a crystal ball. But what we do know, because we experience it each and every day, is that change is inevitable. So, as small business owners, we need to be prepared to respond to trends and we need to evolve quickly with ever changing social media and technology platforms. What once worked might not be working any longer—in marketing and advertising nothing seems to last forever. And while you might not be embracing change, is your competition?
So . . . the watchword for planning in 2017 is flexibility.
With that in mind, Step 2 in the planning process is to expand your view of the upcoming business environment.
First, define what trends are being projected for your industry, product, service, customer and/or niche.
- You can find this type of information in industry publications.
- A really great (and free) resource is your local public library. Not only do libraries provide this type of information, both in print and database form, they also have business reference librarians to help you find answers to specific questions you might have.
- You can use Google tools.
- Go to com/trends and, in the box at the top, type in the words you think people looking for your business might use. Which keywords should you use? Try Google Keyword Planner to come up with a list of 6 to 10 words or phrases. Then paste each one into the search box at the top of Google Trends to see how popular it is.
Next, consider the challenges you are likely to face in 2017. These might not be new challenges, but challenges nevertheless. According to industry analysis and pundits, these are some of the top challenges facing small business owners in 2017:
- Time. It is one of the two most precious assets a business owner has. And many business owners express the feeling that not only do they not have enough time, but that it feels that their business is running them. Working long hours but not seeing any progress is a challenge that is not going to get any better in 2017 unless you deal with it head on. Owner fatigue can result in rash decisions about the business, including the desire to abandon it completely. You need the time to add value to your business.
- Profitability. Many small business owners are fixated on the top line—growing revenue and selling more becomes the solution to every business problem. But when is the last time that you calculated your profitability? Actually calculated the costs associated with every product and service you offer to determine:
- Which, if any, products or services are actually losing money?
- Which products are the cash cows—least expensive to make / provide but with the highest price point?
- Opportunities to reduce cost. Every dollar you save here falls right to the bottom-line. Instant profitability!
- Increasing Revenue. Increasing revenue is hard—it’s a challenge every business faces. Unfortunately, there is no one silver bullet solution to increasing revenue. In a recent survey, 43% of business owners said that improving customer experience and retention was key to furthering success in 2017. 31% responded that they would be launching new products. And 30% were going to expand into new markets.
- Money Management (aka Cash Flow). Money is one of the two most precious assets a business owner has. Money issues, in all their forms, are among the biggest challenges that business owners face. Having enough cash to cover the bills is business reality. Customer / clients not paying creates a domino effect causing business owners to stall payments. Yet routine business expenses, combined with unexpected outgoings, create bills that won’t wait to be paid. The good news is that cash flow issues are manageable and can be dealt with. The solution is making it a priority. Left unchecked, cash flow issues will negatively impact the long term growth of your business.
- Client Dependence. Do you know who your top ten customers are and what percentage of your total sales each is responsible for? If your business is depending on one or two clients to generate a significant portion of your income, this should cause grave concern. Diversifying your client base needs to be a priority for growth and stability.
- Loss of Existing Customers. Existing customers are more inexpensive to retain. Yet they are often overlooked in the quest to grow revenue through new client acquisition. With intense competition for new customers, are you overlooking your existing client base? Why not continue to nurture and build upon the relationships that you have established. Customers who trust you are likely to buy more from you. When you enable them to easily purchase additional products and services, you will find that it is much cheaper to sell to existing customers than it is to find a new customer.
- Owner Dependence. What would happen to your business if you were hit by the fish truck? Would your business still be in business the next day making money? If your business can’t operate without you, which is the case for many small business, they you are growing a business on an unstable foundation. You have a business with a built in failure point just waiting to be triggered.
- Owner Fatigue. The hours, the work and the constant pressure to perform wears on even the most passionate individuals. But grinding it out solves nothing. Do you take time to sharpen the saw? The Steven Covey principle of . . . If you are always heads down in the day to day operation of your business, you will not have time to set the vision for the future, to plan, to strategize, to think about growth and to creatively solve problems. Time for yourself is critical to the success of your business.
- Cutting Your Way To Breakeven. Not all expenses are created equal. When budgets are tight and challenges arise one of the first things small business owners want to do is cut their expenses to balance the budget. But this is a serious mistake. Before you cut anything, think of the long term consequences.
- One easy example is marketing and advertising. Easy to cut, but without it you have no customers. No customers means no sales. No sales means you do not have a business.
- Another easy example is accounting. Are you spending hours frustrated in front of QuickBooks or Excel?
- Another example is social media. Are you ignoring your social media outlets because you hate the thought of having to come up with yet another blog post or Facebook idea?
Ask yourself how much time you are ‘investing’ in these types of activities because you don’t want to pay for the expense. Then ask yourself what else you could be doing with that same amount of time to grow your business? Could you be developing client relationships? Developing new products and services?
While each of these is indeed a challenge, all are surmountable. They can be made easier, but they can’t be ignored. So put all that apply on the list to address in 2017.
Need some help? Just call me or send me an email. I can be the objective set of eyes that helps you position your business to create the flexibility needed to stay competitive in an ever changing environment.
Next week, we are on to making YOUR list. As the business owner you are the most precious asset that your business has. This is both the easiest and the hardest of all the planning sets. So get ready!