The Top 6 Priorities
The New Year is synonymous with resolutions and promises of making changes. If you are an entrepreneur, this time of year offers you a perfect opportunity to take stock of your business, as emails are probably at an all-time low over the holiday period. Here is my checklist of priority resolutions for all entrepreneurs for the New Year:
1. Review your business plan
One of the most important requirements for any entrepreneur is a business plan; not one that lives in their head or one that is consigned to an office cupboard- but a living business plan. If you have never written one, now is the perfect time to do so. If your business plan is in a drawer, take it out, read it and update it accordingly. Without a business plan, your business is essentially rudderless and you run the risk of not focusing on the key activities that need to be undertaken to bring you success.
2. Run through the numbers
For many people, numbers are not necessarily their strong suit and in small companies without dedicated in-house accounting departments this can result in serious problems. There is an old saying that what gets measured gets managed. So if you are starting a business, it is worth revisiting some of the fundamentals that are vital to your business. If you do not have any metrics in place, now is a perfect time to set them. These can include key financial ratios as well as customer and Web based metrics, e.g. £ value per customer, conversion rates, etc.
Topics to brush up on include:
- Break-even Point
- Profit Margins (Gross and Net)
- Cash Flow Forecasts
- Profit and Loss
- Sales Forecasts
- Cost of Sales
- Creditor and Debtor Days
It is tempting to delegate the maths to others. However, you need to understand these concepts so you can manage your business effectively. For example Insolvency is one of the biggest threats to companies in the UK, yet cash flow management is an area which many entrepreneurs neglect. By understanding the numbers that are relevant to your business you can ensure that you are giving yourself every opportunity to grow and prosper.
3. Optimise your website
Most businesses set up a website when they start, but many entrepreneurs then ignore it. It is essential that websites are maintained and are mined for information. Where are your customers coming from? What are they looking at? What is the conversion level for visitors? All of these questions, and more, are easily answered using free tools such as Google Analytics. If you have not done anything with your website for some time, you should implement Google Analytics so you can understand more about your customers. Armed with this knowledge you can then tailor your website for the audience you attract and help achieve the objectives that the website was designed for in the first place.
4. Familiarise yourself with Google AdWords
The growing use of the Web is facilitated in large part by the use of Google as a signposting mechanism to resources and as a means to find answers to questions and issues. Google is the dominant search engine in the UK and AdWords is a powerful tool that can be used to target prospective customers. AdWords lets you show your ads only to people searching on a specific phrase related to your business, so it is highly targeted marketing. If you have an AdWords account, the New Year offers you a great opportunity to review campaigns from the preceding months. If you do not have one – set one up. The benefits of the system are excellent, not least in terms of accountability and targeting, but also marketing effectiveness and the ability to generate a good return on investment.
5. Identify a business book and read it
Entrepreneurs are typically very busy people, dealing with a whole raft of different issues and challenges. However, time needs to be set aside so as to consider the bigger picture as wider circumstances impact upon the prospects for businesses. It is important entrepreneurs remove themselves from day-to-day ‘fire fighting’ to assess future strategy. One means to assist this is by reading publications that either relate to the industry you are in or that will broaden your knowledge in a particular aspect of business. There are huge numbers of business books available at any bookstore (many written by business academics) and some will naturally be more relevant to you than others. Again the New Year offers the perfect opportunity to broaden your knowledge base with some relevant business books.
One thing common to all entrepreneurs is their perceived lack of time. Most are required to cover a huge breadth of areas (particularly at the start-up stage). However, this incessant focus on day-to-day issues can mean that they spend little time reflecting on the wider picture. The New Year period affords you the perfect opportunity to make some changes to ensure that day-to-day management issues do not distract you from your wider business objectives.