By Michael Hess
Forget about going to the gym -- that resolution is typically only good for about a month. What are you going to do for the fitness of your business in 2011? Here are 10 places to start.
10 New Year's Resolutions for Entrepreneurs
10 New Year's Resolutions for Entrepreneurs
1. Do a little less flying by the seat of your pants
Measure as much as you can. This is one of my toughest personal challenges, even though I know that anything that gets measured is likely to improve. You don't have to succumb to analysis paralysis, but find one or two things you don't study closely and study them.
For starters: Do you know how profitable your key customers are? Most small business owners don't, and many don't know who their "best" customers really are.
Flickr photo courtesy of caitra, CC 2.0
10 New Year's Resolutions for Entrepreneurs
2. Find even more ways to save money
There are always, always ways to reduce costs in any small business, and it's incumbent on us to find every penny.
For starters: Take a close look at all transaction costs (bank fees, e-commerce charges, credit card processing, etc.). These things generally become more competitive every year. If you have a million-dollar business and reduce expenses by just 1 percent — not hard to do — you've just put ten grand back in your pocket.
Flickr photo courtesy of KrissZPhotography, CC 2.0
10 New Year's Resolutions for Entrepreneurs
3. Sell, sell, sell
As my father used to say, "sales cure all ills." If you don't already have one, make a plan for the year to find every way to grow your top line, and execute.
For starters: Don't try to do everything and chase every opportunity (I've learned that lesson the hard way too many times). Identify the single biggest growth prospect you have — and have the ability and resources to pursue — whether it's a new customer, new product or new market. Laser-focus on it until it happens.
10 New Year's Resolutions for Entrepreneurs
4. Stay focused on your people and their ideas
Make sure you are getting the most out of your employees and they are getting the most out of you. You may have a formal process for this or a more casual approach (my preference is the latter, but it doesn't work for all businesses).
For starters: Have open New-Year conversations with employees, either individually or in groups. Do the best you can to create a non-threatening, no-consequences environment for the discussions — these are not performance reviews. If you have a small group, do it over a nice long lunch. See what your people thought of the past year, and share as much as you feel comfortable about the business. Try to pick up a few ideas on what you can be doing better for each other in the New Year and plan/act accordingly.
10 New Year's Resolutions for Entrepreneurs
5. Never stop paying attention to cash
You know that cash flow is the only thing that pays you and your bills. So are you doing everything you can to maximize it (payable/receivable management, improving inventory turns, proper use of financing)? The sooner you can get every dollar and the longer you can hold it, the better.
For starters: It's business 101, but how often do you talk to your suppliers about payment terms? Perhaps if you agree to a minimum order level you can get an extra 15 days to pay. Or maybe your vendor will let you place a blanket order and draw from it as needed over time, to reduce your cash tied up in inventory. If you're a good customer with a flawless payment history, chances are the good companies you work with will be open to finding ways to help each other out.
Flickr photo courtesy of liewcf, CC 2.0
10 New Year's Resolutions for Entrepreneurs
6. Analyze everything about your customers
Deal with problem accounts, find ways to reconnect with idle customers, and identify opportunities to grow your best prospects.
For starters: Take your top 10 customers and study every detail about their business with you for the year just-ended. Odds are you'll find some problems and some opportunities. Build a plan for each customer for the New Year, and if possible, meet with them to discuss it. Customers know you want them to do more business with you, so put it out there. Tell them what you're hoping for and what you can do to help make it happen (if you don't know, ask). Always make it a two-way street.
Flickr photo courtesy of Lazurite, CC 2.0
10 New Year's Resolutions for Entrepreneurs
7. Freshen up your marketing materials
Is all of your collateral material up to date? How about your Web site? If you're like most companies, you've probably got boxes with old addresses on them, or Web pages that are way overdue for updates.
For starters: Get fresh eyes. Have a handful of people outside the company (friends, family) put your website through its paces. Ask them to visit every page they can, try forms and transactions, and evaluate the general browsing/shopping experience, as appropriate. I've never seen a website without glitches, so enlist some help in finding as many as you can. Give your testers something nice for their time.
Flickr photo courtesy of Jason Pratt, CC 2.0
10 New Year's Resolutions for Entrepreneurs
8. Master your inventory and product line-up
Do you have the right products in the right quantities going into the New Year? Bad inventory only gets worse, so it's rarely a good idea to try to inch your pricing down to move it. Solve inventory problems decisively — the sooner you can get rid of bad stock the better, so take your medicine and start with whatever markdown you think will sell it.
For starters: Build a list of companies that buy overstocks of products like yours, and send an attention-getting but to-the-point "special buy" newsletter every month or quarter. This can be very effective, but again you must be prepared to lead with a price that will solve the problem. Surplus buyers can be a huge help, but only with merchandise that is priced to move. That's the nature of their business.
Flickr photo courtesy of thisisbossi, CC 2.0
10 New Year's Resolutions for Entrepreneurs
9. Adjust your pricing to keep your business healthy
It does no one any good to boast about having the best price if the best price means you don't make money. Have you kept up with pricing to keep your all-important gross margin healthy?
For starters: Model all your pricing and look at what your real margins are, after all discounts. If your gross margins won't support your net profit goals, and you do a good job controlling expenses, chances are you need to raise prices. Better to raise them a little now than a lot later.
Flickr photo courtesy of Vagabond Shutterbug, CC 2.0
10 New Year's Resolutions for Entrepreneurs
10. Think about you
Are you managing your time and life as well as you can/should? What can you do to make your work life and personal life better?
For starters: Take a few quiet days off, disconnect as best you can, and do an honest appraisal of how your business affects your life and vice-versa. Can you make the two mesh better next year and get more of what you want? You became a business owner for a reason — is it "happening" for you?
Have any resolutions of your own? Please share them. I wish you a happy, healthy and successful New Year.