Congratulations! You’ve reached mid-year and things at your company are humming along. The planning is done, your financials are in order, and your processes are in place. humming along. The planning is done, your financials are in order, and your processes are in place.
Now is the time to start planning further ahead and come up with your path to profitability over the next two to four years. Although that seems far off, you’ll be there sooner than you think. So how do you guide your business to the point you’d like to reach on the horizon?
Create a projection
Start projecting where you want the business to be in two years—from the people and place to the profit margin. Creating an organization chart helps you plan for that flourishing future.
- Visualize what your organization will look like and the roles you’ll need to add or fill: upper management, mid-level management, departmental employees, and support staff.
- At what revenue or customer level will you need to add employees?
- Also plan for the space you’ll need to accommodate future growth, be it a larger office, a relocation, or new construction.
- Don’t forget business technology upgrades and expansions that you’ll need as your business and staff grow.
Evaluate your mix
Review your vendor and customer lists. A too-heavy concentration among a small number—or even one—will negatively affect your business if that vendor or customer leaves.
- Customers: If one customer represents the majority of your income, imagine how catastrophic it will be to your business if that customer goes elsewhere. A broader customer mix safeguards your company’s long-term financial health.
- Vendors: If you buy raw materials or goods, what will happen if a key vendor goes out of business, moves to a different region, or can’t supply the products you need? Diversifying your vendor list reduces risk.
Check out the competition
”Keeping up with the Joneses” (your competition) is a good thing for business and eclipsing the Joneses is even better. Look at what your competitors are doing to keep up with industry or market trends. Are you in step with them? And, what can you do to stay a step or two ahead?
Think about ways you could differentiate your business or add services that offer more to your customers—and draw in new ones. Today, many service providers are offering services beyond their core business; for example, payroll companies now offer workplace retirement plans and insurance policies.
If product or service expansion isn’t possible, you can beat the competition with superlative service that adds value and generates strong customer loyalty—another way to remain highly competitive.
>Bonus tip: check that your own service providers are keeping up with their industries and staying competitive in their fields: Not doing so could cost you money needlessly.
In Part 2, we’ll give you some tips on using this exploratory time wisely, both inside and outside of your company. Stay tuned!