CEO Advisor Newsletter January 2021
Planning for Success in 2021
We are hands-on business, funding and mergers and acquisitions (M&A) advisors that roll up our sleeves and perform desired work with the expertise you need. First, we ask CEOs critical questions about planning and managing their businesses such as:
- Does your company have a Strategic Plan and Forecast?
- Does your company have a defined Sales Strategy to maximize sales?
- A Marketing Plan and Budget to optimize leads and fuel sales?
- A clear path to increased Net Profits?
- An Exit Strategy that enables you to maximize the sale of your company at the right time for you at the optimal price?
Every business needs to plan. Unfortunately, there is a myth that associates business planning with start-ups. As a CEO or owner of a small or mid-size business, can you afford not to plan? Do you prioritize, focus and manage your time, staff and growth proactively? If your answer to any of the questions above is No, call CEO Advisor, Inc. for a no obligation, no cost initial consultation.
When I meet with CEOs of small and mid-size businesses throughout the year, they typically cannot answer the simple question, "What are your goals for this year?" They throw out short answers such as, "Grow the business", or "Sales", but cannot go beyond this and answer the question distinctly with their four to eight primary goals to drive their businesses forward. This is due to a lack of planning, forecasting and goal setting and is a major deterrent to success and profits.
Below are 7 key areas to achieve success in 2021:
1. StrategyStrategy involves taking a hard look at your, A) Products and services, B) Core competencies, C) The strengths and weaknesses in your management team, D) Your target markets, E) Sales strategy, F) Direct vs Channel Sales, G) Geographic sales coverage, H) Your customer size and mix, I) Pricing, operations, marketing, J) Acquisition strategy for growth, and K) Exit Strategy. Bring in the needed expertise to ensure your strategy yields success and optimizes sales, profits and the value of your business.
2. PlanningPlanning doesn't mean just having a meeting with your staff or updating a brief business plan and going back to your daily routine. Business planning is a critical aspect of your business that enables you to rethink, adjust, plan, research, strategize, prioritize, focus and allocate resources to your largest opportunities, while minimizing wasted time and resources in order to excel in the new year.
Planning takes discipline, expertise, the ability to strategize and mobilize around a focused effort in order to accomplish your goals. Execution is the follow-on implementation of your 2021 Plan in a well thought out, concentrated effort. If you are not executing on your Plan, you are wasting time and money, missing opportunities, burning valuable resources and causing irreparable harm to your company, many times on a permanent basis.
3. Proactively Guide Your GrowthYour business will grow or not depending on many factors, including overall economic trends, size of the industry, growth of the industry, specific market needs, your products/services, sales management effectiveness, marketing, proper management of labor, reporting, hard work and other elements. Businesses that plan do it to guide and accelerate their growth to move proactively towards defined objectives, increase sales, profits and higher value when deciding to sell rather than just reacting to business events, which is very risky and costly.
4. ForecastingCreating a detailed monthly Financial Forecast of Sales, Cost of Goods Sold (COGS or costs directly related to providing your products and services), Gross Profit (Sales minus COGS), Gross Profit Margin (Gross Profit divided by Sales), Expenses (Overhead), Net Profit and Net Profit Margin (Net Profit divided by Sales) is paramount to effectively running your business.
A Financial Forecast enables you to compare your actual results to your Forecast, proactively make needed adjustments to your business, eliminate wasted time, money and resources while increasing Gross Profit Margins and maximizing your Net Profits. Without a monthly Forecast, you are flying blind throughout the year with no metrics or financial goals. This, again, will have you leaving a lot of money on the table that will never be recovered.
Forecasting is a straight forward process and a key part of planning for the new year that can be one of the biggest drivers of success and profits. Your Forecast will drive your sales team, sales activity and increase productivity substantially. Seek help from a seasoned business advisor if you do not have a detailed monthly 2021 Forecast.
5. Goal SettingGoal setting should entail all aspects of your business including:
A) Company goals, B) Management goals, C) Department goals, D) Financial goals, E) Sales team goals and individual sale team member goals, F) Sales per Employee goals, G) Gross Profit and Gross Profit Margin goals, H) Net Profit and Net Profit Margin goals, I) Optimizing Financial Ratios, J) Key Performance Metrics, K) Marketing goals and other measureable goals to grow your business to the next level.
Without setting measurable goals, you and your employees may spend the majority of 2021 going day to day in a constant cycle of reactive tasks instead of proactively focusing on and accomplishing your primary goals, executing on your Plan, and maximizing Sales and Net Profits.
6. Manage Priorities and Assign ResponsibilitiesGoal setting also involves focusing your time where it will generate the most Sales and Net Profits. Manage the company by prioritizing your most important goals according to your short-term and long-term objectives and Plan. A Plan gives your company efficiency, accountability and develops organizational responsibilities. Clear accountability and responsibilities drive businesses forward, increase Sales and Profits, and build value for an optimal exit.
7. Track ProgressWith a written Plan, you can track your progress towards your defined goals and measure results. Without a Plan, how can you tell whether or not you are moving in the right direction or measuring success? In addition to your Financials, create a Management dashboard to consolidate your reporting of Key Performance Indicators (KPIs) and Metrics in order to make information easily accessible and to optimize your decision-making and success.
CEO Advisor, Inc. provides expertise and experience to quickly and effectively assist you in planning, forecasting and goal setting for 2021 to greatly increase your success. We address your specific needs with hands-on work, action, expertise and seasoned advice.
Contact Mark Hartsell, MBA, President of CEO Advisor, Inc., for a free initial business consultation at (949) 629-2520, by mobile phone at (714) 697-3370, by email at MHartsell@CEOAdvisor.com or visit us today at www.CEOAdvisor.com for more information.