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Business Tips From the Editor - October 2024
BUSINESS TIPS FROM THE EDITOR
October 2024
Richard T. Hendee, Editor
The Silver Fox Advisor
“2025 Business Plan and Budget ”
In case you haven’t looked at your calendar lately we are in the 4th Quarter of 2024, which means you should be starting your 2025 Business Plan and Budget. These are probably the two most important documents you need to do each year.
The Business Plan is the road map for your business for the upcoming year, and it should detail where your business is today and where you would like it to be at the end of 2025 as well as establish three or four business and financial goals for the next year.
Without a good business plan, I have found in advising small business now for more than 45 years, what typically happens is the business owner(s) and/or the employees will get sidetracked chasing shiny objects that initially appear to be the best things since sliced bread, or in more modern times the I-Phone, but after spending time, money and maybe even some blood, sweat and tears, they turn out to be Ford Edsels!
A couple of key items to create before you start the business plan are:
- Make a list of your key business and financial goals because those can serve as your key performance indicators (KPI’s) throughout the year. Some examples of business goals are: offering a new product, opening a new location, creating a new social media marketing campaign. Further, some examples of financial goals are: increasing revenues by 10.0%, improving the gross profit margin by 7.0%, reducing operating expenses by 5.0%.
- Engaging your management team in completing a S.W.O.T. (Strengths, Weaknesses, Opportunities and Threats) Analysis. Why is a S.W.O.T. Analysis so important? Because it should identify the business’s strengths so your plan can use them to grow the business. Every business has weaknesses which the management team should work on correcting, even making these weaknesses strengths. Opportunities should be capitalized on because many times these are the low hanging fruit that can potentially be turned into quick sales. And finally, although it is difficult to plan for threats, if you have at least identified some potential threats, you can better manage through them.
Then there is the financial budget. So many business owners are so afraid of even attempting to build a financial budget. Yes, the first time you create a budget can be a very daunting task, but it can also be very rewarding especially if it is built from the bottom up. What do I mean by that? Start by filling in the expense side of the income statement and then look at how much in the way of bottom line profitability you want to achieve. Once those pieces are done, you then can start calculating what the revenues need to be to cover the expenses and achieve your net profits goals. This can be a very eye-opening process because you may discover you need to increase sales by a much larger percentage than you have ever done. If that is not possible, then you need to relook at the expenses and make the hard decisions.
Finally, once the Business Plan and Budget have been completed, I recommend to my clients that they roll out at least the Business Plan to the employees so everyone knows what the business plan, goals and objectives are for the year; that way everyone in the business who needs to make it happen is on the same page, singing the music and making it happen!
If you need help or assistance in creating a business plan and budget for your business, talk to a business advisor who has knowledge and experience in this area. We encourage you to visit our Web-site at www.silverfox.org and to learn more about the Silver Fox Advisors, and how they can assist you with your business needs, as well as to discover more about our great programs and community outreach endeavors.
Business Tips From the Editor -September 2024
BUSINESS TIPS FROM THE EDITOR
September 2024
Richard T. Hendee, Editor
The Silver Fox Advisor
“JUST DO IT”
The Nike “JUST DO IT” Brand logo has been around since 1988 and has been defining the Company's actions since then; without a doubt, this campaign has resulted in Nike becoming a very successful Company with a $125 billion market cap today.
Why is this important to the small business owner on Main Street struggling to make payroll each week? Well, over my career in advising small businesses, I have observed small business owners who either could not make a decision or who waited so long that opportunities passed them by. There is a converse action of not making a decision, and that is making decisions too quickly and without all the information. Often those decisions don’t turn out to be good ones.
So, is there a happy medium or a “Just Do It” formula? The answer to that question is a tough one. You as a business owner need to be comfortable with the decisions that you make, and often not making a decision is not an option. Thus, an approach that I have used over my career is not to make a decision in a vacuum. There are usually pros and cons to almost every situation, so I start out with a blank piece of paper and divide it into two columns, pros in one column and cons in the other, to see which, if either, outweighs the other. In addition, I will research the situation and seek input from individuals who know more about a specific situation than I do, or in some cases ever will!
Also, many decisions have financial elements either on the front end or on the back end. So, I will typically run some financial modeling to see how my balance or income statements are or may be affected.
In addition, some decisions could involve legal considerations or consequences or possible image or reputation risks, so getting legal counsel may be justified or warranted.
Now that you have done your due diligence, weighed your options, and made your decision based on all the actions described above, the next step is, yes, “JUST DO IT”! I have seen small business owners get all the way through the process and then never execute.
If you need help or assistance in making decisions in your business or executing the decisions you have made, talk to a business advisor who has knowledge and experience in this area. We encourage you to visit our website at www.silverfox.org and to learn more about the Silver Fox Advisors, and how they can assist you with your business needs, as well as to discover more about our great programs and community outreach endeavors.
