Happy new year! It's almost new years and everyone is excited to finally get 2023 over with. As a fractional CFO, here's my list of often neglected, but super important things business owners should commit to doing this year if not already implemented.
1) Improve Efficiency in your Finance Department
Whether you have 5 employees or 100+, your business cannot afford to have an inefficient finance department. A poor finance department can struggle with even the basics. Whether it's inaccurate information or things taking forever, if you know your finance department is struggling, start there. You need to assess and figure out the problem to get yourself set up for success. Looking for a stretch goal? The best finance departments not only report timely, accurate information, they also help you understand and most importantly improve your businesses capital flows. Timely insights about your business are critical to getting ahead and beating your competition.
2) Start Tracking your Performance
Does you business have an established budget, goals or key performance indicators? If so, awesome! If not, why not? How can you understand your business and where it's headed if you aren't tracking performance in a meaningful way? As a fractional CFO, I see lack of performance tracking all the time. It's such a wasted opportunity because regular performance tracking can really help you zero in on issues and opportunities in your business. This year, think about what success looks like for you and your business and track against that. Your goals could be around cash flow, customer growth, leads, users, inventory management, production efficiency, you name it, all businesses are different so take some time to think about it. Caution: Don't go overboard with your performance tracking, but simply looking at your monthly income statement isn't good enough.
3) Plan out your Year
You'd think that planning out key things in a business would be pretty standard right? Wrong. As a fractional CFO, I often see business owners reacting to business opportunities and challenges rather than planning around them pro-actively. The reactive nature of many business owners leads to poorer overall business choices and lost opportunities. Lack of planning is also one of the key reasons why more than 70% of all businesses fail within the first 10 years. You don't have to go crazy with planning, but you should be implementing a lean business planning process. Evaluate and plan out things like staffing, equipment needs, changing demand or economic, etc. A lean business plan should be looked at semi-yearly if not quarterly. In case you're interested, I wrote more about lean business plans and keeping one up to date HERE.
4) Revisit your Marketing Plan and Strategy
If you manage your own marketing, have staff for that, or outsource your marketing to an agency, I challenge you to look at your strategy again early this year. Things are changing and things are changing fast. Your website likely isn't converting like it use to, your agency might be spending your budget unwisely, or your staff could lack up to date training or insights. What used to work, probably isn't working as well anymore. If you don't already know, track how all your leads get to your business and what those leads cost you. This information is critical for making informed decisions about spending and where to direct time and energy. If you've been complacent for a few years on your strategy, commit to reviewing this regularly to improve your results.
5) Look for Free Money to Use in your Business
2020 certainly has been a banner year for government and other stimulus, but if you think that's going to stop or you no longer qualify, think again. Even without the pandemic, the government and other organizations were stimulating business in countless ways, but the truth is, business owners often don't even know what programs are out there. This year, I challenge you to find an opportunity that's right for your business. It could be a hiring grant, security on a new business expansion loan, a regional grant, or a tax incentive. There are literally hundreds of things that are out there. Start by poking around on the government of Canada's Business Grants and Financing web page. This resource lets you find programs and grants that could be a fit for you.
6) Work on your Business NOT in your Business
A common ailment I see in business owners is that they gravitate towards managing all aspects of their business. I find that owners of businesses between 10 and 30 employees are particularly bad at going from fire to fire instead of focusing on the boarder, strategic, more important picture. By the time companies gets to 30+ employees, through one way or another, even business failure, most business owners realize they can't be everywhere and do everything. This is a really hard lesson to learn, especially if you've been working "in" your business for years before you finally figure this out. If your business is still really small (less than 10 employees), I urge you to think to the future. Plan resources, get mentors, and put some strategic people and pieces in place to help keep you out of the weeds and the big picture in mind.
6.5) Take Care of your Personal Finances
While not really a business resolution, your poorly managed personal finances will ultimately impact your business in a negative way. This year, I'm encouraging all business owners to consider their personal financial situation. Things to consider are tracking personal finances, budgeting, cutting wasteful spending, working on your credit scores (if not good already), saving some money for retirement, establishing an emergency fund, etc. A stronger personal financial position will help you with things like loan guarantees, establishing credibility, avoiding business capital from being used personally, etc. Your personal financial situation is definitely something to keep in mind as you run your business.