By Marla Trollan, SBA Utah District Director
The new year brings fresh anticipation and optimism. If you’re a small business owner, it provides an opportunity to reflect on where your business has been and to determine where you will take it in 2022. The last couple of years have presented unique and significant challenges for small business owners, requiring adjustments in the way they operate. Now that 2022 has arrived, it is time to take a further look at your business.
Take time at the beginning of this new year to update your business plan. A business plan is the foundation of and blueprint for your small business. It is not something you need and update only when applying for a loan. The plan needs to be constantly adjusted to account for changes in the business environment as well as within your own organization. Look at your business from all angles – as a customer, employee and owner. Make sure to address the following areas as you establish attainable goals for the new year that will improve your employees’ lives, your life and your business’s financial health.
Complete an Annual Financial Review for Your Business
Did you meet your business goals last year? Did you meet the financial goals you set? It is important to focus on sales and revenue goals, but you also examine how you have been managing expenses. Make sure you have financial goals and a solid budget that allows flexibility to adjust your spending if you must make up for possible dips in revenue.
View your profit and loss reports for the past few years. Look for trends and see how expenses have changed from year to year. An increase in cost is expected, especially if your business is growing. However, you want to always keep an eye on expenses and see where you can cut or save. For example, do you have recurring expenses or subscriptions you don’t use or that don’t increase productivity?
Complete SWOT Analysis
Not only have external factors changed due to the COVID pandemic, but many small businesses were forced to change internal operations, including strategic planning and management.
Take time to complete a new SWOT Analysis for a thorough external view of the different opportunities and threats that now exist. Next, take an honest look internally and review your strengths and weaknesses to create goals that highlight your strengths and improve any weaknesses.
Modify Customer Personas
Customers have changed since January 2021, not to mention modifications made due to COVID that could become permanent. How well do you “know” your customers? Has the pandemic altered their purchasing trends, and will those new behaviors stick around? Review your customer personas (or take time to create them if you never have!) to see if you need to pivot any of your business processes in order to continue to meet your customer’s needs and expectations.
As you are reviewing your customers-based take time to consider if you have any customers that aren’t ideal. When businesses start, they often will take on any paying client. As your business matures, maybe you will find there are customers who cost more than the revenue they bring. Don’t be afraid to refer them to another business that may be a better fit.
Revamp Personal Brand
Look into the business mirror and ask yourself:
- How have I changed as a business owner in the last 12 months?
- Does my small business reflect my transformations?
- How have my customers changed?
Study your answers and make a list of modifications that will maintain your small business’s cohesiveness. Use your new Customer Personas to help create marketing strategies that will speak directly to them. This may include new messaging that rings true to your brand and the emotional goals or pain points of your customers. Are there new ways to communicate that message to them? What marketing channels will reach your specific customers best?
Develop or Review Employee Incentive Program
Businesses are struggling to find workers, so do not underestimate the employees who work to make your business successful. As you are reviewing your workload and task force, keep in mind not all duties need to come from W-2 employees. Many small businesses don’t need full-time bookkeepers, accountants, website or social media experts, etc. Can some tasks be outsourced so you or your employees can focus on revenue-driving responsibilities?
Happy employees lead to happy customers. Now is the time to find out what your employees need to be able to perform at their highest level. Studies have shown that an incentive program increases overall profits and employee motivation. Remember, incentives are not always monetary.
Incentive programs can be as simple as making sure they have time for a proper work-life balance and time off to take a break. Being a 24/7 entrepreneur, you also need to remember to take time for yourself. Schedule it! Vacation time for employees and you is essential for maintaining morale, which directly correlates to increased productivity. Even if it is just a few days, a vacation will relax and rejuvenate your mind, body and soul.
Create a New Revenue Stream
The new year can be the springboard for a new product, service or audience. Build a new revenue source by creating a new customer by selling to the government or offering products and services internationally.
Utah’s Procurement Technical Assistance Center (PTAC) provides the guidelines and assistance to compete in the government marketplace. PTAC offers free in-person one-on-one counseling.
The World Trade Center Utah is essential to navigating the international business market, including research, advertising and much more. Last year, the World Trade Center received from the SBA a $1,050,000 SBA STEP Grant to help Utah businesses export their products and services. The STEP Grant can reimburse businesses up to $15,000 on their eligible international business activities.
Spending time reviewing your small business from top to bottom gives you an in-depth view of your customers, competitors and employees. Although I only touched on a few areas of an annual business check-up, remember that all aspects of your business plan are important. Knowledge is power and, by reviewing your business and making new goals each year, you will keep the competitive edge needed for your small business to succeed in 2022 and beyond.
If you need assistance on any area of your business plan, free business mentoring is available at Utah’s Small Business Development Center (SBDC), Women’s Business Center of Utah (WBCUtah) and SCORE Utah.