The New Year is a great opportunity to assess your company’s performance over the past twelve months and make changes that will boost your revenue and profits in 2014 – the best way to do this effectively is to use a New Year’s business plan.
Why you need a new business plan every year
A lot of clients seem confused when they are advised to draw up a New Year’s business plan – after all, most companies have a business plan already.
An annual business plan doesn’t replace your existing one – it just updates it and brings your goals in line with your company’s performance over the past year and current economic and market conditions. In other words, your annual business plan is an update that keeps your business objectives current and relevant.
What should your annual business plan contain?
Your New Year’s business plan should answer the question – “what did my business do really well at last year and what could we improve on?” The answer to this question will tell you two things:
- Your company’s strengths over the past 12 months – these should be encouraged and allowed to improve even more
- Your company’s challenges or weaknesses – these need to be addressed with energy and commitment to ensure your future success.
Measuring strengths and weaknesses
Strengths and weaknesses tend to be different for each individual business, and entrepreneurs should bear in mind that some things are out of their control as well.
For example, a company that makes a small loss during a heavy recession but manages to stay in business may have more strengths than another, which makes a modest profit during good times but fails to make the best use of its opportunities.
Keep an eye on the competition
When you assess your company’s performance over the past year and look for areas to improve, try to compare your business to others of a similar size in your industry – how are you doing in terms of market share, new customers, product development, and customer service?
Track your company’s long-term performance
It’s also important to look at your company’s financial statements and sales data over the long term, tracking your progress from year one onwards.
If you see an upward trend, with solid growth and increasing profits each year, you are probably on the right track – if you have any doubts about your company’s performance, consult your financial advisor this month.