The beginning of a new year is the perfect time for businesses of all kinds to make a few important operational or financial changes. Businesses across the world will resolve to improve cash flow, increase revenues, or find other ways to improve their bottom line. However, while creating resolutions is undeniably a productive step in the right direction, having these resolutions will not mean very much unless you take active measures to change.
Fortunately, making real and lasting changes may be much more within reach than you initially assumed. In this article, we will discuss some of the most effective ways your business can push itself to achieve its 2020 objectives. By focusing on what you hope to achieve and making the fundamental changes you need, your business will be in a position to unleash its full potential.
Use the SMART Goal Planning Model
The “SMART Goal” Planning Model recognizes that the best resolutions (and general goals) will each have five specific qualities. Your goals should be “Specific, Measurable, Attainable, Relevant, and Time-based.” The system was developed out of the recognition that while many goals, such as “improve our business”, are worth pursuing, it can be difficult to know how to actually pursue them. Rather than broadly claiming that your business will “improve”, you’d be much better off resolving to “increase net income by at least 10 percent by the end of the year by reducing secondary expenses and consolidating operations.” Developing goals such as these will still not guarantee anything actually changes, but they will at least bring light to what the best next step forward might be.
Revisiting Your Financial Statements
Rather than trying to improve your business by taking dramatic leaps forward (for example: what does it really mean to “disrupt” an industry or become a “global innovator”?), you’ll be much more likely to improve by making small adjustments over time. When left unchecked, the seemingly countless $1, $5, and $10 expenses you accrue over the course of the year can have a major impact on your ability to produce sustainable profits. Instead of expecting a dramatic transformation, get down into the trenches of your financial statements and look for the small adjustments you could potentially make. Even doing things such as purchasing ink, envelopes, and checks via an economy of scale may be what propels your business to finally begin producing a net profit.
Exploring the Possibility of Outsourcing
From a short-term perspective, many business owners will make the decision to keep seemingly all operational responsibilities entirely in house. They’ll choose to manage their own books, to process their own payments, and to maintain control of virtually all other elements of their business. On paper, this may make sense for a limited period of time. But any business that hopes to grow and continue expanding its reach will eventually need to look for some sort of outside help.
There are seemingly countless operations that a business could potentially choose to outsource. Choosing an outsourced check printing company can help your business begin reducing marginal costs while also improving the quality of all checks and other types of payments being issued. If the cost of issuing a check could be reduced from $3 per check to $1 per check, for example, it would naturally be in your best interest to make the decision to outsource. These are the sorts of small-scale choices that can steadily improve your bottom line over time.
Using an Opportunity Cost Perspective
Regardless of what operational or financial choices your business ends up making, you’ll want to be sure to do so using an opportunity cost perspective. In addition to thinking of how much you’ll save on paper, you should also account for the total benefit of making such a decision. For example, using the payment processing example featured above, in addition to the $2 you’ll save per check, you’ll also save whatever amount of time it takes to create, print, and issue these checks entirely on your own. If this time could then be used to improve the revenue-generating components of your business (such as gaining new clients or increasing sales), then it will appear that the initial decision to outsource was even wiser than anticipated. Viewing all possible opportunities with an opportunity-cost mindset will make it much easier to make choices that are objectively good for your business.
Before you begin hastily creating resolutions for the new year, be sure that you are creating these resolutions with a business-appropriate approach. While these tips will not transform your business overnight, they can help you begin moving in a much more productive direction. After all is said and done, 2020 may be your most effective year to date.