It’s a few days after January 1st and you’re probably overwhelmed with the number of New Year’s posts about resolutions and goal setting. Whether in your personal life or for your business, its worth taking some time to do some planning for the changes that you want to make in the new year. Even the simplest plan is better than no plan at all, and small plans with achievable goals made throughout the year will lead to more success than the most ambitious goals without actions. Here are three things to consider.
In a year full of negatives, one positive thing that 2020 brought was the elimination of complacency. While in the past many businesses were able to coast along, doing the same old thing, that changed in the spring of 2020. Businesses had to scramble; a obscure word (unless you liked high school physics), pivot — had entered everyone’s consciousness and became a regular part of our vocabulary.
Businesses were looking for new ways to maintain existing and create new sources of revenue. Distilleries and breweries became hand sanitizer factories, restaurants became upscale grocery stores selling premium steaks and hard to get paper products, and yoga studios became video studios where instructors became in-home trainers. It seemed that the old ways of doing business were gone, and in many ways they were. Face to face sales calls disappeared and all of a sudden people who said they weren’t tech savvy became Zoom experts, handling the screen of an online meeting like an air traffic controller. Businesses that never thought that they needed an online presence were now clamoring for websites; those that had websites were looking for e-commerce functionality to sell their products and services to customers that were stuck working at home.
The changes that Covid-19 imposed on businesses forced owners to diversify in ways that they would not have thought possible in times past. Instead of just reacting to the next crisis, what proactive steps can you take to diversify your suppliers, distribution channels and revenue sources to strengthen your business in 2021?
Lockdowns and sheltering in place caused disruption to both families and businesses. In the face of a very uncertain future and a rapidly changing economic environment and governmental restrictions, business owners froze spending on capital improvements and promotion of their businesses. This was a natural reaction to the to shock, with the need to meet payroll and to preserve what cash they had. But after that initial shock, those that invested in growth of their business are reaping the benefits. Businesses that had never considered advertising online began going live on Instagram and running ads on Facebook and Google. Many saw big results with modest efforts. Even in tough circumstances, the need to continue promoting your business and letting people know that you are still in business remains.
What overdue investments do you need to make in order restart your revenue machine or prepare your business for the future? Or are you like a farmer that has stopped watering the seeds that they’ve planted, but still expects them to grow?
Understanding the impact of changes implemented and investments made will be hard to do without tracking. Being able to identify where new customers are coming from, or the effectiveness of your online activities will be hard to do if you do not have tracking and reporting mechanisms in place. At their simplest they can be a spiral bound notebook or spreadsheets or for the more advanced, an enterprise CRM platform or custom designed reporting suite. The right place for most small businesses is somewhere in between.
More important than the platform itself is the commitment to gathering the information and keeping it updated. At a minimum a business needs to keep tabs on the cost of goods sold, their profit margin, the cost of customer acquisition, return on marketing investments and the closing rate on sales efforts. If you don’t have a current grasp of these metrics, the start of the new year is the right time to set that baseline. Take an hour or two to assess where you are, so that you can begin evaluating your progress as soon as February and analyzing your month over month trend in March.
The impact that 2020 has had on the business community will likely be felt for decades. By defining your goals, making plans to achieve them and acting on them, your small business will be well positioned to take advantage of the rebound and growth the coming years will bring.