New Year’s resolutions aren’t only for personal goals and projects. Your business can also benefit from you setting and working on achieving a few resolutions. The type of resolution you make depends in large part on what your company’s goals are for the year ahead. Think about what you’d like to change about your business or where there is room for growth as you resolve to do things differently in 2018.
Resolve to Manage Cash Flow
Although your company’s profits might be in the black, your business can struggle if you don’t have enough cash on hand to pay bills and other obligations. “Ran out of cash” is actually the second most common reason why startups that don’t make it failed, according to a CB Insights survey.
Resolving to better manage your company’s cash flow is one way to keep your business afloat in 2018. One way to improve your business’ cash flow is to speed up the time it takes for customers to pay you. You might consider offering discounts or better terms to customers who pay within a certain time frame, to incentivize early payments. Another option is to offer to accept more payment methods, making it very easy for customers to get your business the cash it needs.
Another way to increase cash flow in the year ahead is to focus on increasing your business’ sales.
Resolve to Delegate Tasks or Hire More People
Feeling that you or a small core group of people need to be responsible for every task or project at your company can be holding your business back from growth. 2018 can be the ideal time for delegating tasks, outsourcing certain responsibilities, or hiring more team members. The option you choose depends on your budget and needs. You might not have the money to hire on a full-time chief financial officer, for example. But working with an outsourced CFO can help your business better handle its finances and figure out how what to spend where to reach your goals.
In some cases, bringing on a full-time or part-time employee is the appropriate choice. If your team is scrambling to get through its daily tasks, leaving work on unfinished, and you have a positive cash flow, bringing on a new team member might reduce your burdens significantly, giving your room to focus on growth and change.
Resolve to Explore New Ways of Raising Capital
Is your business making use of all the capital options available to it? Or, is it making the best use of the capital it does have? In 2018, it can be worthwhile to investigate different or novel ways of raising capital for your company. Perhaps there are investors you can connect with that you haven’t already, or perhaps your company can benefit from crowdfunding.
Depending on the age of your company and its current financial picture, it might be that certain types of debt financing would be a good fit for you in the year to come. Consider what you want your company to accomplish of the course of the next year when considering how much capital you’ll need and where to get it.
Resolve to Re-evaluate Your Business’ Strategic Plan
Nothing stays the same, including your business. As the world around your company changes, so should your company’s approach and planning. A strategic plan lays out what you want your company to achieve in the future while also including detailed information the steps you should take to follow the plan.
Strategic plans are static documents, though. They should change as your business changes and as the demands of the outside world change. For example, if your plan involved opening new factories to produce a certain product or expanding into new markets, but demand for your product or service suddenly drops, you’ll want to revisit your plan and find a way to pivot or change course.
Once you’ve made New Year’s resolutions to transform your business, the tough part is sticking to them. The team at New Direction Capital is available to work with you to help you make resolutions and put together a plan to keep them. To learn more about how we can help you, contact us today.
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16 Nov 2017
Year-end employee reviews or evaluations — as a manager or business owner, you might be dreading them more than your team members. Figuring out what to say to your employees, especially employees who might not be performing at the level you’d like, can be challenging. You don’t want to drag them down by focusing on the negative. But, at the same time, you don’t want to sweep major issues under the rug in an attempt to keep everyone happy.
Employee evaluations are important, though, as they help you fix problems before they become major. Your team can learn a lot from their annual reviews. For some employees, these reviews can be a chance to make sure everyone is on the same page and to discuss their career goals. These tips will help you make the most of your year-end evaluations.
Prepare in Advance
There can be the temptation to just “wing it” when it comes to employee evaluations and to go into the review relatively unprepared. But you and your team members will get the most from the evaluations if you approach them like any other work project and do some advance preparation work. The last thing you want is to get into a meeting with a team member and completely blank on what you wanted to discuss with him or her.
Preparing for the evaluation can take several forms. If the employee has been with the company for more than a year, you can look at notes from past reviews to refresh your memory of what you discussed or to get an idea of what was discussed if you didn’t conduct the evaluation. Another option is to speak with the employee’s direct supervisors and others who work closely with him or her to get an idea of overall performance.
You might also ask each employee to complete a self-evaluation, which can give you an idea of where they stand or how they think they are doing. There might be differences between how they think they are performing and how other members of your team perceive them. You can address those differences during the evaluation.
Remember not to focus solely on the negative during a review, even if the employee is struggling. You should be able to find at least one positive thing to say about him or her — otherwise, why would you keep the employee on?
Keep it Conversational
Evaluations and reviews should be conversations you have with individual employees, not monologues. You want to give the employee as much a chance to speak as you have, while being careful not to let him or her dominate the discussion. Ask open ended questions about things the employee could do better. Present the evaluation as an opportunity for the two of you to work together to help the employee succeed or continue to succeed at your company.
Focus on a Plan for Employee Growth
The review at the end of the year is a great time to work with your team members on a plan for growth. Specifically, you want them to map out a plan for their own growth. That can mean outlining a couple of goals to work towards in the year to come as well as looking further into the future and making a plan for long-term goals. It might be helpful to ask your employees to come to the meeting with a list of goals for the next year. You can also look at last year’s review to get a sense of what your employee’s plans for growth were then.
Make a Plan for the Year Ahead
Don’t let the review end with out briefly sketching out a plan for the upcoming year. Pencil in check in meetings a few months in the future (such as at the end of winter or end of spring), so that you can touch base with each employee and see how they are doing with various goals. The check in meeting can also be a chance to address any ongoing issues with your team members or to note any positive changes in their performance.
Employee evaluations are just one thing to check off your end-of-the-year to-do list. To learn more about how a virtual CFO can help you prepare the upcoming year, contact New Direction Capital today.
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11 Nov 2017
Several things that were once essential for running a business have gone the way of the dinosaur. Almost nobody uses a typewriter anymore and it’s relatively rare for a company to send or receive faxes these days. Next up on the chopping block might just the traditional office. As technology has made it easier than ever for employees to communicate and connect, even when they are miles apart, the remote office seems to be the workspace of the future.
But remote work isn’t always the best option for every company. If your company is considering offering remote work as a perk or options, take a look at the pros and cons of it before making the switch.
Pros of Remote Work
Perhaps the biggest benefit of offering remote work is that doing so makes your company more attractive to employees. About two-thirds of employees would like the option of working from home, as it would eliminate the need to commute and allow them more time for their family or other non-work obligations. Giving your team the option to work remotely also helps lower your rate of turnover, as employees who are satisfied with their work conditions are going to be more likely to stick with a company.
Reducing turnover leads to another indirect benefit of making the switch to remote work. Doing so can save your company money. If fewer employees leave, you’ll spend less trying to replace them. You’ll also be able to grow your company without having to lease larger office space or without having to lease an additional office.
Another “pro” offering your team the option to work remotely is that you can expand your hiring pool. Instead of only hiring people who live nearby, you can look for new employees across the country. If you end up hiring someone who lives far away, you don’t need to offer to cover the cost of moving him or her, as the employee can remain in his or her current location.
Cons of Remote Work
One of the drawbacks of remote work is that it does blur the line between “home” and “work” for some people. In some cases, that can mean that you have employees who feel that they need to be available and need to response to emails, texts or calls at all times of day or night. In 2014, the New York Times reported that people worked remotely worked 9.5 percent longer than those who worked in an office.
Of course, it’s also possible for productivity to slip when people start working remotely. Some employees need the structured environment found in a traditional office space to help them concentrate on their tasks and get their work done.
Another major drawback of remote work is that it can create division among employees, especially if some employees work in a traditional office and some work from home. Those who work at home might feel out of the loop while those who come into work might feel that they are the ones carrying the weight and doing all the heavy lifting. To keep that division from becoming an issue, it might be a good idea to take an all or nothing approach to work remote. Have each employee stay at home and work — managers included — at least once per week.
How to Tell if Remote Work Is Right for Your Employees
If your employees are asking to be allowed to work from home, that can be a sign that allowing remote work is going to be a good option for your company. You can try it on a trial basis, giving your team the option to work from home for a month, to see if there is an improvement in satisfaction and productivity or not. Offering the option to work remotely might also be a good idea if your company is growing by hiring new people but doesn’t want to rent additional office space.
New Direction Capital can help your company find ways to save money as it grows. To learn more about working with a part-time CFO and how it can help your business, contact us today.
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02 Nov 2017
Budgets aren’t things that you create one day, put in a drawer and promptly forget about. A budget is a living, breathing thing that is subject to change as the needs of your company change. As the end of the year gets closer and closer, it’s a good idea to take the time to review your budget and see where it was on point in the past year and where it might have missed the mark. It’s also a good time to rethink your budget and to adjust it so that it can help your company grow and reach its goals in 2018.
Take a Look at Your Current Budget
Now’s the time to take your current budget out, dust it off and see how it stacks up when compared to the financial realities your business faced this past year. This is a good time to sit down with your virtual CFO and your accountant and review how your business’ actual revenue and spending compared to what you projected for it or compared to amounts you allocated for certain categories.
It might turn out that your company had an excellent year and brought in more revenue than expected. Or it might be that you underestimated costs in several areas and ended up going over budget for certain categories.
Make Changes Based on the Past Year
Once you know how your past year budget compared to reality, you can make changes to it for the year to come. If you ended up earning more than you expected in 2017, you might want to adjust your revenue predictions upward. If you ended up spending more than you thought you would, you might want to consider why that was and either adjust certain categories to account for an increase in spending or consider ways to reduce what you spend.
Consider Ways to Cut Your Expenses
Provided that your business isn’t operating on an extremely lean budget to begin with, there may be ways to cut a number of expenses for 2018, if needed. Really pore over you budget and consider each expense carefully. There might be some costs that you can eliminate entirely. For example, if you’re regularly buying fresh flowers for the office, that might be an expense that you can cut without anyone noticing.
This might be the time when you carefully review and assess your current vendors. Are you getting the best service, the best price or the best product from them? If you can’t answer yes to at least one of those questions, it’s probably time to do some research and seek out other vendors, who might be able to offer a better price or an improved product.
Think About Your Goals for Next Year
As you go about reviewing last year’s budget and creating one for next year, really consider what you want your company to accomplish in the upcoming year. You’ll want to create space for those goals on your budget, whether they are growing your team by 10 percent or opening a new office in a new city or state.
When considering your business goals for the upcoming year, rank them by how important they are to you and your company. You’ll definitely want to make sure there is room in the budget for the essential goals, but might need to put off less pressing needs until your company is in a different financial position.
Set Up a Schedule for Reviewing Your Budget
If your business is going to be focused on growth and achieving its goals in 2018, it’s a good idea to take a step back and review the budget more than once a year. In fact, you might want to re-evaluate it monthly or quarterly, so that you can make sure you’re on track or make any adjustments to it. Although you can look at the previous experience and performance of your business to get an idea of what lies ahead in the future, it can be difficult to predict what revenues will be like in the coming months. Regularly reviewing your budget will let you make appropriate changes as the need comes up.
Whether we worked with you to help you put together this year’s budget or you’d just like a fresh set of eyes on your budget as you get ready for 2018, New Direction Capital is here to help your company achieve its goals. Contact us today for more information.
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A strategic business plan isn’t something you put together, put on a shelf and forget about. As your business grows, it often makes sense to revisit and review your strategic plan, both to make sure you’re still on track and to make sure the plan you created is still relevant to your company today. There are several benefits to reviewing your strategic plan, as well as times when it makes sense to adjust the plan to better fit your company’s needs or the business environment around it.
When to Review Your Strategic Plan
There are usually three times when it makes sense to check in with your company’s strategic plan. The first instance is to run an annual, semi-annual or quarterly review. Evaluating your plan at the end of the year or quarter lets you directly see where you met your goals and where you didn’t. It also allows you to make any adjustments to predictions you made in the plan, using actual revenue and expense figures.
Another instance when it makes sense to review your company’s strategic plan is when you’re experiencing a period of growth. Perhaps you’re about to launch a new product line or introduce a new service. Maybe your company is planning on opening a new branch or office space. Checking in with your strategic plan means you can adjust it to accommodate the growth in your company or the changes your company is experiencing.
Finally, the third instance when it makes sense to review your company’s plan is when there is an upheaval or change in the economy or market, particularly a change that affects your company. Perhaps a new product came out that makes the products your company offers obsolete. There could be a downturn in the market or a major catastrophe, like the housing crisis, that has a major impact on your company’s ability to grow.
How to Know If You Need to Make Changes
Any major change within or around your company is usually a sign that it is time to adjust your plan. For example, if you bring on a new executive or if you’ve recently elected new members to your company’s board, you may revise the plan to accommodate those changes.
Another sign that you need to adjust your company’s plan is if you’ve pivoted away from your initial goals or mission. Perhaps when you wrote the plan, you were expecting one product to be the “star” product of your company. But it turns out that the item you expected to be less popular is actually the more popular of the two. You might adjust your plan to focus more on the second plan and less on the initial product.
In some cases, you may need to change the plan because issues have cropped up that you didn’t anticipate. An issue with a supply chain might make it difficult for your company to achieve a certain goal within the timeframe you originally expected, for example. In another example, the funding environment around your company might have changed. Perhaps you wrote the plan in the midst of a recession, when there wasn’t that much debt financing to be found. It might be that there are more lending opportunities today or that your company is in a better position to receive loans from lenders.
The Benefits of Reviewing Your Strategic Plan
There are several benefits to reviewing your strategic plan. For one thing, doing so keeps your company on track or lets you know if a change in direction is worthwhile. It might turn out that the goals you set when you wrote the plan were too lofty and not in line with reality. In that case, you can adjust them so that they are achievable. It might also be the case that you didn’t aim high enough when you wrote your plan and mapped out the moves your company will take over the next few years. If you are exceeding expectations, going back and reviewing your plan can allow you to see how you can adapt it to best suit your company’s needs today.
When’s the last time you took a look at your company’s strategic plan? If it’s been a while, contact New Direction Capital for a review and assessment of your plan today.
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