It's the start of a new year – no better time to set new goals for your business for the year to come. So what objectives should you be setting, and what's the key to achieving them?
1 Maintain cash flow control
Why? A predictable place to start perhaps, but serious cash flow problems not only threaten your business's survival and growth – they can also waste lots of your time and energy.
How? Effective cash flow management starts with keeping a tight rein on your costs (and if you're starting a new business, you need to minimise your start-up costs). Your suppliers should of course offer best value for money (which doesn't necessarily mean the cheapest prices) and you'll need to negotiate good deals from them. Your prices should enable you to attract customers while maximising profit, and now could be the perfect time to reconsider your prices and rethink your marketing strategy. You might decide to start selling online this year. To prevent cash flow problems you need sound credit control measures too. You must also know how to deal with late payment and how to recover debts if things get difficult. Working with budgets and producing cash flow and sales forecasts can keep your business out of trouble. Remember – cash is king.
2 Build a better brand
Why? Effective branding drives success in business and your brand should be one of your most valuable assets.
How? Branding means much more than business stationery, packaging, a logo, slogan or colours. It's what your business stands for, its personality and – crucially – how customers and others perceive your business as a result of their dealings with you. Is your branding consistent? Does your business image need a makeover? Do you need to rebrand your business, perhaps even including picking a new name? Maybe you need a new business website or simply need to improve your existing website? Even if you're on a shoestring budget, you can create a winning brand.
3 Create an ideal customer base
Why? Some customers (let's call them "VIPs") are worth more than others, while some customers really are more hassle than they're worth.
How? Whether good or bad, you need to manage your customer relationships. You also must be able to understand your customers, if you're to target those whose custom will help take your business to new heights. Your customer service must be excellent, of course, and there are many ways to encourage customer loyalty. A proven business development strategy is to sell more to your existing customers, but first you must know who spends the most money with you.
4 Try something completely new
Why? Stagnation will lead to your customers deserting you in droves, while you and your employees are in danger of losing interest if things stay the same.
How? Successful businesses know when to try something new. That might be to reinvent themselves, introduce new products or services or (at the very least) find ways to freshen up their offer. In the short term, some businesses might simply need to stock new items or improve their premises, but the important thing is that doing something new can re-energise your business and act as a growth catalyst. Another strategy could be to target new markets, possibly including exporting your products or selling online. Standing still isn't an option in business.
5 Think more strategically
Why? Working "in your business" instead of "on your business" is a classic owner-manager mistake that hinders success and development.
How? Stop wasting time on things that really aren't worth it. Don't let too much of your time get taken up with low-level tasks, especially if other team members can take care of them. Learn to let go, by delegating responsibility. Take time to step back from day-to-day matters, to think more strategically about your business and where you want to take it. If you don't have a business plan, write one. If you do have one, update it, and repeat the process more often. Having to write or update a business plan forces you to think about your objectives and how to achieve them (ie your development strategy). And remember, there's nothing wrong with having grand ambitions.
Paul Mooney, director of North West-based business support organization Blue Orchid, on how to set objectives in business
"Most successful businesses, regardless of size, have a regularly refreshed business plan with clear objectives. The start of a new year is a perfect time to set objectives if you don't already have some, or revisit your existing objectives and set new ones for the year ahead.
"Although many small firms have short-term objectives, which are seldom written down, often what they don't have is objectives for the medium and long term, which is a mistake. Setting objectives is a process. It enables you take stock of what you've achieved, assess your strengths and weaknesses, threats and opportunities, and weigh up your market, so you can determine where you want to be in the next one to three years.
"Objectives should be set for all key areas of your business – it's not just about sales. If applicable, focus on parts of the business that are experiencing change or need strengthening. Involve your staff, because giving them a sense of ownership can ensure that objectives are met.
"Make sure your objectives are SMART [ie specific, measurable, achievable, realistic and timely]. If your objectives are unrealistic it can be really demotivating when failure inevitably comes. However, if you want your business to progress, your objectives should provide a challenge.
"You should be able to measure – easily and frequently – whether you are on course to achieve your objectives. That's why breaking them down into weekly and monthly targets helps. It could be weekly sales or new customers each month. Performance against objectives should be reviewed regularly – at least one a month – with all team members involved in trying to find solutions to under-performance against objectives.
"Businesses cannot control external factors, and significant changes can mean that achieving your objectives for 2014 won't be possible. In that case, go through the process again and set more realistic objectives. You must have short-term, medium-term and long-term goals in business. They enable you to judge how well you are performing, stay on course and hopefully take your business forward."