Well, it’s that time of year again.
The bearded man is on his way, the family are threatening to arrive, the emergency chairs are out and you have more food than you can possibly eat in one week.
And while the year is wrapping up, you often look back at what you’ve achieved, or not achieved. It’s a time for reflection and contemplation, especially as a small business owner.
Then January kicks in, and unless you’re an accountant up to their armpits in tax returns, you start looking forward and putting plans in place. It’s the absolute perfect time of year to start forecasting and budgeting. It’s time to step out of working ‘in’ your business, and work ‘on’ your business. If only for a few hours. It will pay dividends in the long run…pardon the pun.
Budgets
Take some time to consider and plan for all the different areas of your business.
Company and Product Positioning
What are you going to need to do differently this year?
Will your pricing be increasing, how will you communicate this?
What costs will your company incur in its marketing and branding?
Channels to Market
Which kind of customers are you targeting this year?
What costs will be associated with these targets?
How will you make them feel special, what budget have you got for your customer journey?
Sales Targets
What kind of targets have you got?
Do you know what you need to make every month, week, day, hour?
What are your conversion rates and how can you increase them?
Staff Incentives and Culture
How much time do you need to spend with your staff?
Have you got regular ‘rhythms’ to your meetings?
How will you build team spirit and how much will it cost?
Forecasts
It’s helpful to forecast monthly, with particular emphasis on the riskier aspects of the business such as new product lines, new revenue streams etc. Costs should always be under control as they are directly manageable.
The best time to raise funding is when you don’t need it. Professional forecasting should identify any cash shortfalls well in advance, avoiding the need for stressful fundraising when negotiating leverage is at its weakest.
There is nothing better for staff morale than seeing a business meet its forecasts and kill its budget, particularly when there is a realistic incentive scheme in place.
Tools
Of course, our glorious systems can help you out with this. Xero is fantastic at providing accurate and up-to-date management information. Have a play with the different reporting functions and the forecasting section. Remember all those little costs that occur that you need to budget for, but probably forget about.
If you want to take your forecasting to Jedi level, then Crunchboards is amazing for predicting business performance. With ultimate flexibility you can add your own dashboards, forecasting everything from cash-in-the-bank to turnover by client.
We wish you a wonderful Christmas and a fabulous New Year, have fun forecasting where your business will take you in 2017. And of course, if we can help just give us a shout.