You always see it this time of year. The gyms are busier. The lines at the health food stores are longer. What is it about a New Year that causes people to make simple decisions to improve their well-being? What makes these actions difficult to maintain throughout the year?
While New Year’s Day signals a time to reflect and plan; a time to contemplate changes; don’t we get the same chance with every sunrise?
While I have your attention, as you may be reading this while on your shiny new treadmill or enjoying your bowl of granola for breakfast, let’s chat about your business. New year; new day. What little steps could you take in your business to improve its overall brand, stream of revenues, profitability and/or cash flow?
If you haven’t done so in a while, it may be time to dust off your strategic and operating plans. Look back to make note of your accomplishments; and consider what goals will maintain your focus this year to bring your business to the next level. Make your goals measurable, and be selective.
A good place to start is with your bottom line. If Profit Enhancement is your focus, make that non-negotiable, what areas of your business would you need to address to make sure you achieve those results? Do you have the right product mix? Are your processes operating efficiently? How about the amount of scrap and/or customer product returns? And maybe you have some expenses that have become routinely incurred; perhaps it’s time to reevaluate your costs.
Also consider these outside forces when writing your plans to create your goal:
Economic Uncertainty. With the recent volatility in the stock market, rise in interest rates and stresses in the geo-political realm, is your business prepared for the potential economic boom…or bust? Most plans I see factor in increases to revenues and profits; certainly a valid goal. What about Plan B? Do you have a back-up strategy to deploy in the event factors outside your control do not go your way?
Income Taxes. When was the last time you reviewed your long-term tax plan? With the Tax Cuts and Jobs Act that was signed in to law in December 2017 came changes in tax rates and a host of other provisions that may lead you to reconsider the form of business entity you are using. The structure that served you well over the last several years may need to be reconsidered to provide optimum benefits into the future.
If you are unsure where to start, you may benefit from a quick, five-minute exercise to answer some key questions about your business that will aid in identifying your key areas for opportunity. My firm’s website offers a simple Business Diagnostic Test at https://www.hwcpa.com/resources/business-diagnostic-test/
In summary, if you find yourself making New Year’s resolutions, don’t forget to consider those little changes you can make today, and every day, in your business that will result in larger enhancements over the longer term.
Wayne R. Pinnell, CPA, is a founding member and serves on the advisory board for the Center for Business Growth. Wayne has over 30 years serving business owners in his public accounting career. He is managing partner of Haskell & White, LLP, one of the largest independently owned accounting, auditing and tax consulting firms in Southern California, servicing public and private middle-market companies. Wayne consults with a number of companies on their general business operations including workflow, waste reduction, strategy, and growth/profit initiatives. He can be reached at WPinnell@hwcpa.com or 949-450-6200.