Start Your New Year With a Profit Plan

Start Your New Year With a Profit Plan

Are you ready for 2018 to be even better than 2017? If so, take a few minutes to reflect on the questions below and take action to set your 2018 profit plan.

Question 1:  What were the three best business things about 2017?

No need to re-invent the wheel. If you knocked it out of the park in 2017, then can you repeat your success in 2018?

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 2017, then think about how you can repeat them to enhance your 2018.

Question 2:  What were the three worst business things about 2017?

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 or money, or gain stress, then decide if you can make changes for 2018.

Question 3:  What vision do you have for your business in 2018?

Finally, ask yourself this question: At the end of 2018, 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 2018 Profit Plan

If your vision includes financial goals, then creating a profit plan is one way to measure your progress throughout 2018. Start by deciding how much profit you want to make in 2018. From there, you can compute your revenue goal and make a plan. Then you can add expenses to complete your profit plan.

For example, let’s say you want to make $50,000 in profit for 2018. You can do that in a number of ways:

  1. Generate $500,000 in revenue and $450,000 in expenses.
  2. Make $2 million in revenue and $1,950,000 in expenses.
  3. Generate $150,000 in revenue and $100,000 in expenses.
  4. And so forth.

From your profit goal, you can then create a revenue plan. This should include how many items you need to sell. As a result, it should look something like this:

  No. of units Price Revenue
Widget A 3,000 $200 $600,000
Part B 100 $2,000 $200,000
Service C 700 $1,000 $700,000
Total     $1,500,000

Once you have your revenue plan, you can fill in your estimated expenses.

You might be thinking that this sure 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 it is a budget. And if you need us to do the number-crunching part, then please feel free to reach out to us at Innovative Financial Services, LLC any time.

Here’s to a very happy and prosperous 2018!

By | 2017-12-18T15:34:41+00:00 December 18th, 2017|Categories: Best Practices, Small Business Management|Comments Off on Start Your New Year With a Profit Plan