Christmas Day has been and gone and New Years is settling in, but when you sit back in the comfy chair – wherever that may be, on the beach, by the water, camping or even just at home……now is the time to take a quick “stocktake” of the year that has past.
For those in business, often there is little respite as you run from one; sale, job, project, customer, site, state, transaction, employee, etc…..to another.
So when you consider the following – think to the positive as well as the negative, and give yourself a pat on the back where it is deserved.
To reflect on your business for the past year, consider the following 5 simple elements:
- Business Value and
The objective here is to give yourself a 1-5 score on each to highlight areas of opportunity or focus for the year ahead.
A “1” rating would be a “there is only one way forward – and that’s up, with lots of work to do”, whereas a “5” would be more like “going really well, plans working – steady as she goes”. Naturally, the objective is to get all of these in the 4+ range over time.
Too many business owners spend 60, 70 or 80+ plus hours per week in their business, not because they want to – but they feel that they have to.
There can be many reasons for this, but the more time spent in the business, the less there is for living life(which for most, was why they went into business in the first place). So objectively, are you working the hours in the business you want to and is it sustainable?
Perhaps the biggest source of business owner stress that we see – driven by not having enough cash.
Do you have sufficient cash available in your business to:
- Pay the accounts on time, and
- Fund the growth of the business, and
- Pay yourself a regular income – all at the same time?
This is the bottom line surplus available to you the business owner. After all, expenses, depreciation and your personal income.
Profit is a key driver in calculating the potential sale value of a business and is something that every financier needs to see to approve your loan.
A healthy profit is typically driven by a good business model and a healthy product/service margin.
Deep down, when asked directly – most business owners believe that their business should be worth something.
It should be an asset which can be sold, and in a lot of cases, is considered to be a quasi form of superannuation asset by many business owners. Check out some of our earlier posts for what makes a business saleable, but if it’s not profitable – then it’s harder to sell.
Consider how your business is trading and assess its business value – once again, giving a score out of 5.
Yes – enjoyment.
Experience has shown over many years, that business owners who really enjoy what they do, get the rewards.
For some this is money, for others, it’s the ability to teach, yet for others, it’s being able to work in an area of interest.
From a consulting view, it also supports a more sustainable business model and a more optimistic perspective (ie. a glass half full).
This does not mean that you don’t have a bad day or week, but on balance, overall – you enjoy what you do and have no desire to change.
So by now, you should have 5 scores in front of you. These represent indicators of where you see your business at the moment and highlight areas that you are not satisfied with.
For the areas that you scored well in, take a few moments to enjoy the success. High scores “don’t just happen”, so consider what has driven these and perhaps how you can replicate that same success in other areas.
For the areas that you didn’t score well in – well, consider these as points of opportunity for 2021.
Change will require new/different actions and we always recommend that you leverage some considered planning to get the most value from your resources.
If you are serious about improvement in 2021, the resources section of our website will provide you a variety of articles and tools which will assist you.
These range from the Online Business Review for those wanting a more objective assessment, to our 101 Business Tips collection (our gift for those who complete the Online Business Review) and more than 45 articles on a range of different topics.
Best wishes for a fantastic, happy, healthy and prosperous New Year!