WELCOME TO BUSINESS 2021!
I think it is fair to say that we all hope 2021 brings in change for us, that we can live and run our businesses with more normality.
How to Make Powerful Business Decisions in 2021
The time to plan is now. The New Year is a great time to set or revisit plans, not for making new years resolutions (which often fall by the way by the end of January), but for considering this: Decisions x Actions = Results.
What decisions do you need to make to optimise what 2021 will bring to your business? And do you know the key to making your decisions more powerful? Support those decisions by writing down the key actions that need to happen to implement the decisions. Then set a timeline for those actions. Finally note who is responsible for making sure those actions happen. This does not have to be the person “doing”, but someone needs to be accountable for the actions.
And you know what, suddenly you have powerful decisions, with action steps and accountability!
To the person accountable in your business (including you), support them by letting them now that they can let accountability be their friend! They (or you) know what has to be done, and by when. Simple, clear, powerful.
Link your decisions to your financial results – YES, you should do a Budget!
Once you have made your plans, you should update your budget to include:
Resourcing the plan – your actions steps may involve increasing or decreasing investments in particular areas of your business. By including expectations in your budget, you can track the financial impact of your plan, and you might even refine your actions as you see the impact.
Reporting against budget – the most effective way to improve the power of your budgeting is to establish reporting to measure variations from budget, and a rhythm within your management team for reviewing this. This may include your finance manager, or your external business adviser / accountant. By setting these reviews in concrete, you and your team remain accountable.
Flexing your budget – It is ok to update your budget through your reporting period, but you should always refer any changes back to your original budget. This means you can retain the relevancy if there is significant change, but also understand in your review process what has changed from the original budget.
The next budget cycle – you should include the ability for you to add notes to your budget, so that come next budget cycle you can use those notes to guide your new budget development.
The difference between a “Budget” and a “Cashflow Forecast”
Often these two are referred to in the same way, but what if you had a budget of $3M in sales, spread evenly over the year, but your clients changed from paying you on 30 days to 90 days due to their cashflow? That’s a $500,000 cashflow difference! You should always understand both your budget, but also your cashflow.
We are fortunate that the uptake in Cloud Software has improved the availability of software that can provide budgets, cashflow forecasts and management reporting using real time data.
If you would like help setting your plans for 2021, including action plans, but not forgetting budgets and cashflow forecasts, please let us know!
Is there a place for Love in business?
When business owners reflect, I am sure there are many aspects of their business that show a place for love in business.
Love is about relationships, and business owners who neglect relationships can find themselves without loyal customers and employees, so I hope you agree relationships matter in business.
I am sure the business owners out there can remember “courting” customers, and likely too is that great “first dates” with prospective customers stick in your mind.
Once the customer is won though, here are three ways you can keep the “spark of love alive”:
- Great service– This will mean different things to different businesses, but one thing you can do that can build your relationship is simply do what you say you will.
- Communicate often– You might think that your customer does not want to hear from you, but if you give them a reason to listen or read, then regular communication is a great way of building your relationship.
- Surprise + thrive – keep your customers exited by your actions, an unexpected card or gift might warm their heart.
Don’t forget to love thy self
Self care (or love) too, is vital for business owners, and I don’t just mean giving yourself a bonus.
Rather, think of this quote from Mathatma Ghandi: “If you want to change the world, start with yourself”, words that go well with this quote from George Bernard Shaw: “Progress is impossible without change, and those who cannot change their minds cannot change anything.”
The start of a new year is a great time to put some effort into developing yourself.
Not Just Customers
Love those around you. Beyond your customers, don’t forget to give your team some love too. This might be through beefing up your communications, letting your team know you care, and helping them deliver results too!
And finally, as a business owner, you are uniquely positioned to “Love from Afar”. The opportunities today to give to those in need may well be endless, we support a number of different local sporting clubs, as well as an initiative started by our founder, Stanley J Canny called Best Buy Books where we supply books to all of the school children in the northern suburbs of Geelong to ensure that they have book packs as well as books in their school library, but surely a great characteristic of love is to give without any expectation of receiving.
Find a charity that resonates with you, and let your customers, suppliers and team know what you are doing. You might be surprised at their reactions.
So, yes, I believe love has a place in business, but perhaps beyond how you may have thought.
Canny loves Business
Yes, Canny Loves Business, so if you love your business and want it to thrive, we can help you set your goals for 2021 and beyond.
Our Business Advisory Team can assist with advice on your systems, support for your budget development, cashflow forecasts, management reporting, and even become part of your team that reviews your performance against budget on a monthly or quarterly rhythm.
If you love your family and want to set them up for success after you are gone, then come and see our team about estate planning.
If you love fishing, or travel , then link up with our financial advisers to understand and optimise your savings and investments so you can do what you love sooner than you might have thought.