Start the New Year with a 2017 Profit Plan
Are you ready for 2017 to be even better than 2016? If so, take a few minutes to reflect on the questions below and take action to set your 2017 profit plan. Question 1: What were your three best business moves in 2016? No need to re-invent the wheel. If you knocked it out of the park in 2016, can you wash, rinse and repeat these items in 2017?
If you’re having trouble thinking of three things, here are some hints:
What apps saved you time and money?
Did you make some good hires?
Did you let go of a bad hire or two?
Was there a marketing campaign that really worked?
Were there any events you went to that generated great ideas?
Did you add or remove products and/or services?
Did you buy new equipment or open a new location?
Summarize the three best things that happened in your business for 2016 and think about how you can repeat them to enhance your 2017. Question 2: What were your three worst business happenings in 2016? While we don’t want to dwell too much on our failures, we do want to learn from them. Think about the three things that are causing you to lose time, money or gain stress, and decide if you can make changes for 2017. Question 3: What vision do you have for your business in 2017? At the end of 2017, what has to have happened in order for you to have a successful year? Think in terms of metrics as well as intangibles, such as peace of mind and happiness. Once you know your destination, the fun is in creating a roadmap to get you there. Your 2017 Profit Plan If your vision includes financial goals, then creating a profit plan is one way to measure your progress throughout 2017. Start by deciding how much profit you want to make in 2017. From there, you can compute your revenue goal and make a plan. Then you can add expenses to complete the budget. Here’s an example: Let’s say you want to make $50,000 in profit for 2017. You can do that in a number of ways:
Generate $500,000 in revenue and $450,000 in expenses.
Generate $2 million in revenue and $1,950,000 in expenses.
Generate $150,000 in revenue and $100,000 in expenses.
And so forth.
From your profit number, you can create a revenue plan. A revenue plan should include how many items you need to sell. Like this:
Once you have your revenue plan, you can fill in your estimated expenses. You might be thinking that this sounds a lot like making a budget, and it is. But it’s far more fun to work on something called a profit plan than a budget. If you need for us to do the number-crunching part, please feel free to reach out any time. Here’s to a very happy and prosperous 2017.
About the Author - ECS Financial Services' shareholder, Tobey Wilson, is a Certified Public Accountant (CPA) and Certified Lease and Finance Profession (CLFP). He joined ECS Financial Services in 2002 as an accounting intern, after receiving his bachelor's degree from Indiana University. Tobey became an ECS shareholder in January 2015. Tobey's expertise includes financial statement compilations, reviews and audits, ERISA audits, financial projections, business and personal tax preparation, and management consulting, as well as personal and corporate tax planning. Tobey likes working at ECS because he enjoys the people and feels they are like family. Tobey is active in his church, where he holds the position of Treasurer, and he enjoys spending his free time with his family traveling and visiting presidential museums and homes. Their goal is to visit every state!