However you voted in December, and whatever your preferred outcome, we know the UK will be leaving the EU on 31st January. The clock starts on the transition period… but don’t worry, this is not a Brexit rant! The start of every New Year is the perfect time to restock your thought-bank, recharge your batteries and do some planning.
Here’s how you can put your STAMP on your business in 2020 by focusing on these 5 important areas:
Most small businesses do not have an up-to-date business plan, which means they tend to focus only on shorter-term outcomes. And as the Cheshire Cat in Alice’s Adventures in Wonderland once said, “If you don’t know where you are going, any road can take you there.” The classic result is an initial feeling that you are responding to the market and widening the range of services you provide, but this soon develops into a business spread so wide that it’s impossible for potential customers to define what you are really good at. Sound familiar? Then it’s time to update your 5 year business plan, and ideally get some external input to the process.
A strategy without a plan is just a pipe dream. Once you know what you want the business to look like in a few years from now, you need to break this down so the different functions in the business are all working to achieve that same goal. That includes being realistic about the costs that will be incurred in order to achieve growth, and the timetable.
And this means targets. Every business is different and it may mean daily or weekly targets, but as an absolute minimum the business must have monthly targets, whether this is for sales, profitability, gross margin achieved or numbers of new key accounts opened.
If you do not fully understand the financial accounts of your business, this section is here to scream at you to do something about it. A study in the US in 2018 suggested that 82% of small businesses that fail do so because of cash-flow problems, which means that many of those failures could have been prevented had the owner managed their cash position better.
This is not just a gentle prod to start the year with a clear understanding of your financial accounts, it is a proper kick. Talk to your bookkeeper or accountant about how you might work together to improve the reporting so it is clearer. Maybe take an online course on business financial management. Do you know which customers are the most profitable? How much does it cost you to acquire a new customer? What is the average spend of your customers? Who are you highest value customers? Do you understand the costs in your business, and the profit margin for every product?
And, as it’s up-and-coming, make sure to submit your own tax return before the 31st January 2020 deadline.
Marketing is a core area of the business and one where many people struggle. Although it sounds gobsmackingly obvious, it is shocking how often companies are not able to succinctly describe what they do. Add in ‘who’ they do it for, and ‘why’ customers buy from them, and it starts to expose more than just cracks.
I am a big fan of the value proposition, and have been working with companies for over a decade to help them develop a clear set of messages that describe what it is they do, who they do it for and why they should buy from them rather than someone else. It is rarely straightforward and it is exceptionally hard to do on your own.
The process of developing a value proposition also forces you to clarify who you are targeting. Don’t be tempted to go broad and try to have an all encompassing value proposition. Much better to be focused and niche. It is perfectly acceptable to have several variations of your value proposition, for different segments of customer.
Once you have clarity on your value proposition, and the target audience for that message, developing a marketing campaign to reach that specific segment becomes much more straightforward.
Now while a business must have a clear strategy, without great people it’s meaningless. Peter Drucker famously said: “Culture eats strategy for breakfast” and it is absolutely true for companies both large and small. The people in your business make it work, or break it. It is never easy, and it never stops evolving. Structure can help, but the single most important factor is a set of values that genuinely governs how you work. It must emanate from the leadership team, and it should define who you employ. Sure you need skills, but do not hire on skills alone. Probe and test people about the cultural fit, and if they are wide of the mark do not hire them, however smart they are on paper.
Putting a STAMP on your business on your own is hard, which is where UKBA can help through the use of independent business advisors.
If you’d like support planning your business in 2020, we offer our TwentyTwenty Insight Review, which provides a snapshot of the health of your business with recommendations for a programme of improvement. Contact Gavin McWhirter on 077 3606 0230 or firstname.lastname@example.org to find out more.
Gavin McWhirter has over a decade of experience working with SME’s to develop sales, marketing and market research strategies, and supporting the execution of those plans.