With the busy holiday season fast approaching, now is the time many small-business owners start thinking about goals for the upcoming year -- maybe it’s expanding to an additional location, introducing a new product or even hiring staff in order to achieve better work-life balance.
Related: In Defense of Work-Life Balance
Just as you did when you developed your first business plan, it is important to take a step back and evaluate your next set of goals -- that way you’re proactively managing your business and setting measurable benchmarks you can track. Based on my conversations with entrepreneurs like you, here are five tips to make sure you’re planning for success:
1. Take stock of where you are.
As with any goal, the first step is to assess accurately where you are now. Ask yourself, where is your business financially? What are your current and anticipated business expenses ? How well have you met last year’s goals? Are there any areas that are still lacking that need to be rolled over into the new year? What strengths and successes can you build on? Knowing where you are now gives you a starting point from which you can realistically plan the path to your next set of goals.
2. Scan your environment.
After you’ve looked at your own business, you should know what outside factors could affect your business plans for the upcoming year. Evaluate what economic, political and competitive factors might shape your approach to achieving your growth targets. Reading articles that look at social and economic trends and predictions -- both nationally and locally -- can help you determine how demand for your product or service might change in the next year, either positively or negatively. This is also a great time to dust off the competitor research you did when you launched your business and to refresh your awareness of how they are performing, how they’re marketing themselves and whether they have plans to expand. Armed with this information, you can set your business on the path to win.
3. Determine what you’ll need to achieve your growth targets.
In order to achieve growth, you’ll likely need an increase in resources -- whether that’s in the form of funding, time, staff or materials. When it comes to funding, you’ll want to determine what’s important to you, whether it’s access to capital that can be used for any business purpose (versus restricted use), flexibility in repayment terms, speed, cost of capital or other factors. Before you secure any funding, make sure you clearly understand the terms and have assessed the true cost.
Related: How to Determine Your Working Capital Needs
Think about other resources you’ll need. Can you handle the increase in time that you’ll need to dedicate to growth efforts, or should you consider hiring additional staff to help maintain your day-to-day operations? Will you need experts in certain areas? Be honest with yourself about the resources you’ll need in order to avoid being stretched too thin, and build those costs into your plan.
4. Make a roadmap.
Once you’ve set your high-level goals, create a realistic roadmap for how you’ll achieve them. Breaking your goals down into smaller, more manageable chunks will help make achieving them seem less overwhelming and more importantly, will make success more likely. Take it step by step. One prioritization technique is to separate the need-to-haves from the nice-to-haves . Another strategy to help get you moving is to pick items that you know can be accomplished quickly, and check those off the list first. Momentum is a powerful thing.
5. Have a contingency plan.
While doing your research up front and planning ahead will give you the greatest chance of successfully growing your business, it’s always important to plan for the unexpected. Make sure you build in wiggle room in your budget and have a backup source of funding to help smooth any bumps in the road.
Related: Is Your Business Prepared to Handle an Unexpected Emergency?
With a great plan in place, you’ll be able to ring in the New Year confident in the direction your business is heading. Cheers to that!
Haijian Hu is Head of Headway Capital Business Lending, where he helps small businesses take charge of their finances. He previously worked as an enterprise resources planning solution architect helping small-to-medium businesses...