1) What happened this year?
2) What business growth strategies will make next year better?
Our advice to business owners is to invest in a strategic review of the current year before they begin strategic planning for the coming year. The strategic review identifies strengths and successes that you’ll want to build on. It also illuminates problem areas, which require either fixing or eliminating. Not every weakness is worth fixing and you’ll want to know which is which. I’ve listed the strategic review questions at the end of this article.
Let’s turn our attention to 2020.
Strategy Definition for 2020
With the answers to the review questions in front of you, gather your executive team for strategy definition and planning. Strategy definition is a series of statements that make clear exactly:
- Who are your buyers
- What value you offer to them
- How much profit you will make on every sale.
Here are examples of strategy definitions for various industries. Use these as a guide for your own company’s strategy definitions.
CPA: We increase the cash flow of our client companies in order to fund their growth and the profit from each engagement is x%.
Business Attorney: We resolve legal issues for our client companies to help them concentrate on their operations and the profit from each engagement is x%.
Architect: We provide architectural designs that meet the goals of clients in terms of their aesthetics, budget and useful life and the profit from each engagement is x%.
HVAC company: We provide preventive maintenance on client systems to ensure they have continuous heat and cooling economically and the profit from each contract is x%.
Commercial landscape: We design, install and maintain the grounds of office parks and buildings in a manner that meets their aesthetics, budget and useful life and the profit from each engagement is x%.
The meaningful factors of strategy definition must be clear, precise and outcome or results oriented. Your profit from every such sale needs to be part of the strategy definition so that your strategic planning ensures that you make this profit.
100% within your control
We caution against any strategy definitions and plans that rely on outside factors going exactly your way. You cannot control what goes on in your clients’ companies or with your suppliers, vendors or partners. If you’re in an industry where labor unrest is possible, or supply chains are vulnerable, or procurement processes and standards are difficult to navigate, take those into consideration.
On the other hand, there is a tremendous amount that you can control.
- Your strategy definitions (the value you offer, your market, and your profit).
- Your growth mindset (sometimes you have to break things)
- Your customer service and responsiveness
- Your internal and external communications
- Your choice to add value at appropriate times
- Your choice to take risks and be radically different
- Your choice to eliminate some of your offerings
- Your willingness to fund growth rather than reduce taxes
- Your willingness to ensure that you are not the ‘face’ of your company
- The extent to which you value your employees and see them as an equal partner in revenue and profit growth.
- Your commitment to having a life outside of the company.
Next year: Great or Same Old, Same Old?
Are you so busy running your business, that you don’t make take time to think, analyze, learn, and improve? The time to stop is now.
Ask yourself: In one year do I want to be one year older and one year more tired? Or do I want to be wiser and wealthier?
If you’d like help analyzing this year’s results and developing powerful strategic definitions and plan with your leadership team, email me to schedule a complimentary discovery call. We’ll spend 30 minutes on the phone and I guarantee you’ll get at least one great idea on how to build your business next year.
Strategic Review of 2019
The key to success in the next year is the review of this year. Here are 7 questions to answer about this year:
- What quantifiable results did you deliver to your clients? How? This is a huge competitive advantage for you as long as you know what they are and understand how you achieved them.
- What percentage of revenue came from repeat customers and clients vs. new clients? Repeat business is the most important indicator of long-lasting success. If your percentage is under 50%, you’ll want to understand why, and plan to increase it next year.
- What percentage of revenue came from improved or innovated products or services developed this year? This is positioning your company top of mind for your buyers.
- How much of a profit increase did your revenue generate? Did the increase match your increase in sales, fall below, or exceed?
- How did you help your employees meet the expectations of your buyers, support your strategy, and the development of new products and services? Employees are the key to successful growth, and they need your ongoing support.
- How did you improve the flow of information both forward to front line people and vertically to decisions makers? This is about a combination of automated reporting, making time for conversations and well-run meetings.
- How was your personal growth as an owner and a leader? Every stakeholder takes their cues from you. When you grow, they all grow.
- How much did the value of your business increase in this past year? Your personal wealth grows with the value of the company.
- Did you increase your operational capacity this year? Think about it? Reject it? Why? Money, time, energy, knowledge?