As we enter a new year I wonder how many businesses have set targets and looked at their plans for the next 12 months? I would hope the vast majority of businesses do, and it may be that you have a different financial year and look at this at the start of that period, however the vast majority of businesses do not make formal plans. There are of course different stats that back this up, but most I have read estimate that more than half of all businesses do not have a business plan for the next year.
There is also a large correlation with those businesses that don’t have plans failing, but those who do plan tend to be more successful.
With 2021 starting in lockdown and a Brexit deal being signed after most of us broke up for Christmas, I understand it may mean that our crystal balls are a bit more foggy than usual! However most businesses have resources and capacity that can be calculated so you can see what the company can produce over the next year. If that is way in excess of your estimated income, then you need to look at creating new opportunities (let’s be optimistic) or cutting costs (let’s hope not).
It may be that we have to see how the year goes, but if we have a decent management accounts pack, you can compare the actual results to the forecast, and straight away you will get a quick picture of how things are going. This is really important as normally it’s the companies that change direction first who tend to survive and thrive, those left behind not being decisive are the ones that will struggle.
Therefore our first tip of the year is to take a good look at the year ahead and plan, then regularly compare yourself to this, changing track as necessary when the wind takes you in a different direction. If you need any help with this, then do not hesitate to get in touch.
Have a great 2021 everyone!
