7 Steps for Business Success in 2019

Do you have a strategic plan for 2019? By this time, you should. Each business has its own unique challenges and opportunities. Whether starting a new venture or growing an existing business, we hope that these seven basic steps help guide you to a more successful year! Remember to keep the organization’s mission and values in mind.

1. Conduct a SWOT Analysis.

Do this exercise with managers and employees for the best insight.

- Strengths

List 2-3 key strengths. What is it that your organization is really good at? Is there something clients repeatedly compliment about your product/service?

- Weaknesses

List 2-3 weaknesses. Ego can sometimes make it difficult to do this exercise, but you’ll be glad you did. What needs improvement?

- Opportunities

List 2-3 opportunities. Will you focus on upselling or new client acquisition? Are there new partnerships that you made this year that could be leveraged to grow revenue in the year to come?

- Threats

List 2-3 threats. Are clients leaving you to do business with competitors? Maybe you have high-skilled employees that are approaching retirement?

2. Determine Key Performance Indicators (KPIs)

There are too many types of KPIs to cover in this article, but here are a few of our favorites.

- Gross Profit Margin

The gross profit margin equation can be used to evaluate whether your goods or services are priced appropriately. It is calculated as (gross revenue – cost of goods sold)/gross revenue. A healthy gross profit margin should be large enough to cover operating expenses and leave you with a profit. Most managerial accountants recommend a gross profit margin between 40-50%.

- Net Profit Margin

This KPI tells you what percentage of revenue was profitable. It is calculated as net profit/total revenue. 15% or higher is favorable. Don’t be fooled by focusing solely on increasing revenue without accounting for profitability. There is a “newer” concept in the business world known as the profit first method. Google it!

- Net Promotor Score (NPS)

This KPI helps answer the question, “How many of your customers like your product/service enough to recommend it to others?” This answer can’t be determined from your financial statements. Surveys are a popular method for gathering data on this KPI. You’ve go to ask, then ask again, and again! More yays than nays is obviously a positive result.

3. Use the S.M.A.R.T. goal approach.

This is a popular method for developing and reaching goals.

- Specific

Set clear expectations. “Make a profit in 2019” is not a S.M.A.R.T. goal. Anyone

- Measurable

If you can measure it, you can manage it. Once you’ve determined what KPIs to focus on, decide next how well you want to score.

- Attainable

The objective should be probable yet challenging. Take a step back. Can this really be accomplished? Is it too easy?

- Relevant

Don’t get lost in the clouds. Does this goal correlate with your SWOT analysis and overall mission of the organization? Can you obtain the resources to reach this goal?