One of the biggest mistakes business owners can make is not dedicating enough time for business strategy and future planning. When this happens, companies miss out on opportunities to protect their revenue and maximize their growth. By taking a step back, reviewing the year to date, and considering some goals for the future, business owners can set up their team for success. Investing time in business strategy planning can yield one of the highest returns possible! Get a jump start on your 2020 business strategy planning with some of our tips, below.
Create SMART Goals
As you are starting your review prior to year-end, review current year-to-date business information, including financial statements. Consider any changes in your staff, customers, and other data you’ve collected since the last year-end. Do you notice any patterns or insights from the data that you didn’t expect? Is your company meeting its growth goals? Consider what could have been done differently, or any extenuating circumstances that may have affected your numbers.
Based on what you accomplished in the last year, set some realistic, actionable SMART goals. SMART stands for Specific, Measurable, Achievable, Relevant, and Time-Based. By using this framework to set goals, you’ll be able to break down a huge annual goal into strategic, smaller steps that can be accomplished over time. “Acquire more customers,” for example, is not a SMART goal because there is no measure of success. How many more customers would be a measure of success?
An example of a SMART goal:
“We will secure 15% more contracts in 2020 than we did in 2019 by increasing our monthly internet ad spend by 5%, hiring an additional sales representative, and asking our network for referrals.”
This goal is specific and measurable because you’ll know if you reach it. This goal is also time-sensitive, and relevant to the ultimate goals of the business. By declaring what steps you’ll take to reach the goal, you’ve also made it actionable. Increasing ad spend, hiring a new employee, and asking peers for referrals are all projects that your team can break down into steps.
Plan your Tax Strategy around your Business Goals
When a business has an expert CPA in their corner, the opportunities to maximize tax deductions increase significantly. Once you’ve set the business goals, you can plan your tax strategy accordingly.
Some businesses hesitate to take advantage of credits, and deductions for fear of getting flagged for an IRS audit. However, these elements are part of tax law for your benefit, and your business has no reason not to take advantage.
At DMA, we believe your ultimate business strategy should guide how you plan your financials, not the other way around. If your business doesn’t need a new delivery truck, don’t buy the latest model just to take advantage of a tax deduction. There may be other ways to your goals.
Our team can help you be more strategic with your business decisions. For example, if you plan to hire a new team member, do not just consider the wage expense. Also consider the additional payroll tax, benefits, travel, and office supplies expenses. How will the new employee be compensated – hourly, salaried, commission-based or some combination? Will your new hire generate additional revenue to cover the additional expenses or will he/she reduce the workload on another team member so they can generate additional revenue? How long do you expect this process to take and do you have the cash flow to cover the start-up period? How will this new employee fit into your current structure and how will you expect current team members to react? As you can see, there are a lot of variables to consider for this one strategic action, and many of these variables impact your business revenues, expenses, and tax outcome.
Our team can help guide you in making tax-related decisions that support the growth of your business. To learn how we can help you plan a strategy that supports your business, reach out to us today.