I have to admit that this time of year was always my favorite when I had my landscaping business in North Carolina, not because my staff and I had extra time off for the holidays but because it was a time of reflection, cleanup and renewal: a time to get the business planning and bookkeeping tidied up for tax filing and to forecast the year ahead.
This important process was something I learned long after I had launched the business. I later wished I had known more about the benefits of business planning before I felt like I was in over my head. I learned that just as we all renew our personal commitments in the New Year, the same should hold true for business objectives.
If you already have a business plan, one hopes you’ve reviewed it weekly, monthly and quarterly in the past year. If you don’t have a written business plan, don’t beat yourself up. Get one down on paper now and begin taking a good hard look at the year ahead, including a 12-month cash flow projection.
“I know the subject creates indigestion,” says Gordon Platt, a Maine Small Business Development Center counselor in York County, “but a business plan is essential for entrepreneurs to navigate the rough waters of self-employment. Without one, it is like hiking in the woods without a compass, or GPS for the younger set.”
John Entwistle, an SBDC counselor in Portland, stresses the importance of thinking of business planning as a process rather than focusing on the business plan as a document.
“The process begins when one first starts thinking about the business, continues through the initial preparation, startup, and operating phases and on until the business closes,” he said. “The planning process continues and the document should evolve to reflect that.”
So what questions should you ask and answer as you review your business plan for the New Year?
First look at sales: How well did the business do last year? What sales volume do you want to hit in 2012? What other services do you want to offer your clients and how much will you charge? Will this require hiring more employees or taking on a loan?
Then look at payroll expenses and any costs associated with employees: Have you planned for raises and benefits? What education and training do you want for yourself and your staff this coming year and how much will it cost?
Next, look at your marketing and advertising strategies: What worked last year and what didn’t? What do you want to try this year and how much will it cost?
My business plan revision was never a pie-in-the-sky wish list. However, it was enough to push me and my employees to do better each year.
“Once you have a business plan and a cash flow projection it will be much easier to maintain and to use the information for the many decisions small-business owners are faced with,” Platt said.
“For instance, using your cash flow projection along with the monthly data you should be generating with your bookkeeping, you can compare your actual performance with your predicted performance,” he said.
That’s the part I actually loved as the New Year moved along. Many QuickBooks users aren’t aware that there is a budgeting piece built into the software that allows you to pull a report called “Budget vs. Actual” as the year rolls along. This informative report helped me keep my business on target.
Feeling stuck with this process or just need some guidance? Platt says SBDC counselors are happy to help you review and update business plans.
In addition, Women, Work, and Community is offering “Beyond Startup: Moving Your Business Forward.” I’ll be teaching this in Portland mid-February, and the class is offered statewide.
May you have a safe, happy, and prosperous New Year.
Gigi Guyton is microenterprise coordinator for Women, Work, and Community covering Cumberland and York counties. Her office is in South Portland, and she can be reached at 799-5025, or by email at firstname.lastname@example.org.