I just love a New Year. Don’t you? As a business owner, it’s a chance to freshen up on all the ugly things that bringing my business down. Something that you might be working on this time of year: how to make more money (or how to make smarter money). I want to walk you through a few things that you should be doing right now to get yourself ready for 2017.
1 // Do a financial review
How did your business do in 2016? This is where accounting software can be helpful. Print out your profit and loss report and examine the following:
- Income – is the money you earned in line with what you wanted?
- Expenses – is the money you spent in line with what you budgeted?
- Net Income – this tells you how profitable your business was… did you earn money from your business? Is it what you’d like to earn? (And thinking forward to April: what might you owe in taxes?)
If you don’t use software, you can gather this information on your own:
- Sales booked in 2016
- Expenses paid in 2016
- Net income equals sales minus expenses
Once you become more skilled at doing this, you’ll start to see trends from month to month, quarter to quarter, year to year. Make a plan to review your finances once a month.
2 // Fix what’s broken
Make a plan to fix what’s broken. A lot of times, we examine what we did last year and keep doing the same things. If you want to improve upon the year before, dig deep to fix what didn’t work:
- If sales were low, examine your marketing strategy
- If expenses were high, look at what choices caused you to spend more money
Become an investigator to make links into the weaknesses in the business. And make plans to improve.
3 // Make goals for your money
This is a KEY step in making the most of the New Year. You need to set goals for what you want your money to do. This is what financial planning is all about:
- How much do you want to earn from this business?
- Set sales goals (how may events do you want to do at what price?)
- Set an expense budget (how much will you spend on what?)
The key to setting the sales goals and creating an expense budget is ensuring that your marketing plan and your operational plan align with those financial plans. If you say you’ll do 20 weddings, how will you get those weddings? How are you promoting your business to do so? If your goal is to do 20 weddings, who will staff those weddings? Do you have an operational structure in place to service those 20 clients?
Finances need to play well with marketing and operations in order for your business to be viable and sustainable.
Keep your plan part of your monthly financial routine. A plan is ONLY as good as you use it! Bring it out every month and see how you are doing. Are you hitting your marks? If not – adjust your plan going forward.
Happy New Year!
May it be a fulfilling and prosperous one!
About the Author: Michelle Loretta is a consultant for wedding and event professionals and founder of Sage Wedding Pros. She blends her past as an accountant for Deloitte, a sales and marketing manager for DDLA, a merchandiser for Coach, and a stationery entrepreneur to help entrepreneurs better their businesses. Sage Wedding Pros produce The Simple Plan Workshop, The People Plan Workshop, and Be Sage Conference. Michelle has been asked to speak at NACE Experience, NAWP Conference, Biz Bash Live, and a number of other seminars and workshops.