Another year gone!  Were you happy with the progress you made?  What changes could you make this year to your business to take it to the next level?

A new year is a great opportunity to clear the issues holding you back and to set a course for the result your want for yourself.  But, you have to stop just 'doing it' and to lift your focus from each day's routine to a higher level, take a helicopter view of where you want to go, then decide how to get there.

Because this Blog started out as a bit more than a few minutes read, I have broken it down over two parts.  Both parts will be in the written test at the end, so you will need to read both.  Got your attention?

In this part, four tips on what is essential for review, and framing the questions we most need to answer to be able to properly plan.

1. Take the opportunity now to future proof your business

That means anticipating the future and developing strategies to minimise shocks and to capitalise on opportunities.  Most businesses don't plan, often because they don't know where to start, so having a process and even the help of a facilitator is a good start.  I use a simple process to overview things; where is the business NOW (see 2), WHERE do you want it to be in 1 year and 3 years (turnover, GP, NP, ROI, Value) (see 3 & 4), and make an action plan to work out HOW to get there (see 5).

2. Make sure your finances are in order

What is the current cash & liquidity position and what working capital is required?  Look at some key benchmarks, including;

- Return on Capital Employed.  You need to make an appropriate return on the money you have invested, in today's values, and after allowing for a fair market salary for yourself.

- Free Cash Flow.  What is left after paying the bills, your needs, loans and tax?

- Working Capital.  This changes, particularly if the business is growing, so you need to know how much cash you will need to fund that growth.  Forecast in detail 3 positions, high growth, low growth, middle of the road, and use the 'most likely' to continually manage actual against forecast.

3. Focus on Profit, not Turnover

Don't chase sales for the sake of it, and make sure you're making profits on your sales (both gross profit and net profit).  Analyse profits by each product, profit centre or by job.  Remember 'turnover is vanity but profit is sanity'.

4. Look for Waste

Go through your costs and think about each item, you could be amazed at how much waste there is.  Consider job cost and or low productivity, waste of materials on jobs, costs of reworking, buying price of goods for production or sale (renegotiate buying price or new suppliers), and every Expense from A to Z (advertising cost and effectiveness, cost of operating bank accounts, insurance cost and coverage, etc.).

In the next part, a simple plan format, and reviewing business structure and succession planning.