Business New Year's Resolutions 2008
Every year about this time, people set personal New Year's resolutions–lose weight, take up Brazilian jiu jitsu, save more money, learn a foreign language, lose weight. There is, of course, no magical time to take up a new endeavor or recommit to an old one, but the New Year always seems to offer a fresh start.
The New Year is a good time entrepreneurs can set business resolutions. Evaluate the old. Consider the new. Each entrepreneur will need to consider the nature of her business and decide upon what goals or directions to take. Here are some general ideas for resolutions that could apply to most businesses:
1) Increase sales. Always a good goal! Entrepreneurs often tend to quantify the goals they want to achieve. Set realistic goals to increase your sales. Set specific goals: How will you increase sales of each of your products or services? As several economists are talking about a possible recession, it's important to realize goals sometimes aren't achieved not because of lack of effort, but because of business conditions. Understanding the causes of success and failure in business isn't always easy. For this reason, some entrepreneurs recommend setting activity based goals, rather than broader sales targets. What will you do each day, week, or month to increase your sales? Have measurable activity-based goals.
2) Drop some unprofitable products or services. Drop some unprofitable sales channels. Entrepreneurs too often want to do more. But, time is limited. No matter how good you are, you can't do it all! Especially for smaller companies, consider if your business engages in areas not justified by the financial or personal reward.
For example, in the world of small, self-publishers today, many individuals are following the lead of POD pioneers like Morris Rosenthal and Aaron Shepard. Rather than fulfilling orders themselves or hiring employees, these author-publishers are outsourcing all fulfillment to POD companies. This can allow greater sales with far less infrastructure than traditional publishing. This allows the authors to focus on marketing and writing.
Dropping areas of endeavor is usually more difficult in larger companies, where institutional shake-ups occur. But, for smaller companies, it's often more psychological. It's easy to fall into doing things one way and not change. Stop and reevaluate the "why" of what you're doing. Ask: "Is there a better way?"
3) Add new products or services. Even the smallest companies need to grow and change. Will your company add any new products or services in 2008? How will you decide which new avenues to pursue?
4) Groom an employee for a higher role within your organization. For most companies to grow, you'll need to have good employees. Finding them from within and moving them up to higher levels of responsibility is often a good plan. Evaluate how you promote. Evaluate how you evaluate your employees. Who are your biggest stars and why?
5) Decrease costs. For many businesses, this isn't as important as it use to be. Low margin businesses are always hyperaware of costs. But, informational companies, many service companies, and those with higher profit margins tend to be less sensitive to changing prices. Every company should evaluate its costs of doing business. The end of the year is a great time to really review your company's financials. Can significant cost reductions be made somewhere? Can modest cost reductions be made somewhere?
Unfortunately, some costs are not in the entrepreneur's control. Rising oil prices today lower profits directly in trucking, for example. These companies charge more for their services. These costs can work their way into the products or services of many other businesses. Evaluate how sensitive your company is to various inputs and resources. What is on the horizon that could lower your profitability, and how can you deal with it?
Many entrepreneurs would argue you should be doing all of the above every single day. In reality, change often occurs in fits and starts. A New Year is a natural time to re-evaluate your business and your entrepreneurial activities.