Look back to leap forward – clear sailing in choppy waters
As we reach the last two weeks of the year it’s only natural to be thinking about and hopefully planning for 2019. The internet is flooded with numerous posts on social media and blogs about goals, targets and New Year's resolutions. And as the chimes of Big Ben ring out so we think about the changes we will make in the upcoming 12 months.
But don’t get ahead of yourself! Can you plan for next year if you haven’t evaluated this one?
Are you ahead of your targets or have they slipped? You might know roughly how far off your goals you are this year but do you know why?
There are some events we can control but there are also external factors which impact our businesses. Knowing which events threw us off course is vital to planning 2019. As long as we learn from our mistakes and pivot when necessary, all will be well.
Personal experience of goal shifting
Here's an example of how I took a different course in 2018 which will have a big impact on next year.
Looking back to the beginning of 2018, I embarked on a project which, without going into too much detail, stalled and dwindled. I hit March with a chasm. It resulted in an emptiness which caused me to reevaluate my vision and goals. The project had opened up the opportunity to use my experience and skills in a completely new field. One which I have a real passion for and is sorely needed by so many.
An external factor, beyond my control, stopped me in my tracks and I had to examine the options. Broadly speaking to find more business consultancy clients or to develop the Homepreneur brand.
I chose the latter and fortunately, with the support of the fantastic Homepreneur Community I filled that yawning gap, pivoting away from my core consultancy to focus on business productivity, efficiency and time management to help people who work from home regain work-life balance. These skills are at the core of every business’s success. They underpin the ability to make the best use of time – the only finite resource we all have equal amounts of.
This week saw the launch of the Homepreneur Productivity Course, an online course made up of nine modules to help business owners save 10 hours a week and gain back control over their work-life balance. You can find out more here: www.homepreneurcourse.com/join
And the next 12 months brings great opportunities to develop more courses and a memberships site with monthly training.
Review your year
Looking back over the past 12 months is an important starting point for deciding on the changes you are going to implement in your business in 2019 and I would start with the numbers.
Dig out those accounts and get delving. The first thing I want to know know is were sales up or down. Sales drives profits which in turn yields cash. So whilst the expression “cash is king” is true, you’re not going to generate cash without focusing on sales. (Unless of course, you’re selling assets).
There's another expression which is also worth remembering – ‘sales are vanity, profit is sanity'. This is also true but without sales, there is no potential for profit and thence cash generation.
Therefore there are three sets of number to evaluate in the first instance:
- Gross profits
(We'll come back to costs and expenses in an upcoming blog post)
When you have your review day, ask yourself the following questions:
- How much did each product and service generate?
- Where did your sales come from?
- What marketing activities were the most successful?
- Which took the least time?
- What gave you the most pleasure?
For example, if you are a coach was it individual personal coaching or executive coaching which yielded the highest revenue? Was it networking, personal recommendations or some other marketing activity which resulted in the most clients.
Analyse your numbers carefully as you may well be surprised. Deal with the evidence. Are these numbers consistent with the previous year or was there something different you did?
The other thing to considered is the average sales value from the different sources of revenue. It may be that clients gained via a strategic partner may be of better quality than from networking. My best clients in terms of revenue and longevity have come from two strategic partners, not from networking, social media or direct marketing.
Enjoy your marketing
I know several business owners who dislike social media despite the fact that it brings in business. They do it badly or not at all.
I know people who never do any email marketing. The tech is too frightening or they don’t want to trouble anyone and it might appear ‘spammy'. If you don’t like doing something either don’t do it or get someone else to do it.
So once you’ve looked at each invoice and noted the sales figures, establish the marketing channel associated with it each. Next, evaluate the time taken to nurture that client. If it’s a referral then it’s probably negligible but if it’s from email marketing it may be many months. One of clients had been on my email list for about 5 years before contacting me – that's a very long lead time!
If you run a business with over 100 sales it's worth combining sales into categories to make the analysis easier. Using a cloud accounting system will allow you to extract much of the data into a Excel format very easily.
Use a spreadsheet
Put all the figures on a spreadsheet so you can sort by different factors. If you cannot assign specific numbers to the columns then define a ranking scale – e.g high/medium/low for ‘hassle or enjoyment' or long/medium/short for ‘ lead time'
By sorting the information in different ways and maybe revising your ranking scales, you'll get a clearer picture on last year's business.
This straightforward analysis will place you in a great position for planning for next year.
So, how was 2018 for you? Did external factors throw you off course or was it clear sailing all the way?
And finally. Take time out to plan your goals for 2019 and how you're going to achieve them. It's time well invested – you won't regret it.