Make Big Plans for The New Year
Originally published: 12.01.09 by Ruth King
Forget resolutions. Instead, commit to doing things differently.
I hate New Year’s resolutions. Everyone “resolves” to lose weight, quit smoking, get their finances in order, be profitable, or any number of other wishes. Few people are serious about them. Within a few weeks into the New Year, most people are back to their old habits. However, it’s the thing to do at the end of each year. When it comes to your business, forget New Year’s resolutions. If you want a better year in 2010, you must act differently than you did in 2009. Changing habits is hard. We are comfortable the way we are, even if it hasn’t produced the results we want. I’ve seen company owners go to trade shows, attend seminars, and sit in meetings; and come back excited about change. They take the initial steps tomake the changes and think they have succeeded, but the discipline isn’t there to ensure that the changes continue. Most of the employees accept changes for a few weeks and then go back to as it was before the seminar. Many times when I start working with a contractor who has decided that things have to change, and means it, the
Here are the questions to ask to start the 2010 planning process:
Goals and Objectives
• What went right in 2009? What went wrong?
•What did you learn from the rightsand wrongs?
• Do you want to change your mix ofbusiness?
• What did your competition do thisyear?
• Are you happy with the personnelwho work with you? If not, what areyou going to do about it?
• How many did you have at the end of2009?
• What is the goal for 2010?
• What is your renewal rate?
• Do all employees understand the importanceof service agreements/contracts to the business?
• Did you, as a leader, pay attention tothis part of the business in 2009? Or did you lose focus? Why or why not? What did you learn from this?
• What ads worked in 2009?
• What didn’t work, and what did you learn?
• What public relations activities willyou do?
• Did you generate one new customerper day in 2009?
• What direct mail activities are yougoing to do?
• What other media are you going toplace?
• Is your tracking system in place?
• Did you have a budget in 2009? If so,did you meet it with respect to revenues and expenses?
• What are your sales goals for 2010 (bydepartment if departmentalized)?
• What are your gross margingoals for 2010 (by department ifdepartmentalized)?
• What are your net operating profitgoals for 2010 (by department ifdepartmentalized)?
The answers to these questions giveyou the starting point for change in 2010.After considering your responses andidentifying areas where behavior mustchange, get your employees involvedin setting the goals for the company .If you involve employees, they will be more likely to work toward the goals. If the goals are forced on them, they areless likely to participate. They also wil lappreciate the chance to give input intothe direction of your company. It showsyou care about their opinions.After setting goals, plan marketingand advertising activities around these.Put your chosen actions on a one-page spreadsheet and post it on a wall where everyone can see it. Track results. You’ll see what is working well and what isn’t. Determine how to change what isn’t working.The final piece is a budget for 2010. Commit to investing 30 minutes at the end of each month to review your financial statements, your goals and objectives for the month (and whether you met them), and your marketing activities. Are you on track? If not, wha tare you going to do the next month to getback on track? It takes discipline to do a monthly review. However, reviewing your statements and acting on what you find will help you break through the status quo and achieve the goals that you want to achieve in 2010 and beyond.
Ruth King has over 25 years of experiencein the hvacr industry and has workedwith contractors, distributors, andmanufacturers to help grow their companiesand to become more profitable. She is president of HVAC Channel TV and holds aClass ll (unrestricted) contractors license inGeorgia. Ruth has authored two booksThe Ugly Truth about Small Business andThe Ugly Truth about Managing People.Contact Ruth at www.hvacchannel.com or770-729-0258.
Articles by Ruth King
Understand Your P&L Statement: Gross Margin, pt. 2
Gross margin should not vary more than a few points each month. If it does, then you must find out why the margin is varying.
Understand Your P&L Statement: Gross Margin
Understand Your P&L Statement: Cost of Goods Sold
However you decide to categorize expenses in your P&L, it's important to be consistent.
Understand Your P&L Statement: Sales vs. Revenue
Sales are critical to survival — when revenue is actually generated is even more critical.
The 20 Percent Profit Myth
For a realistic goal, include owners’ compensation in the net profit equation.