Focus on resolutions about processes or habits that you want to pick up and about how often you’ll perform them.
As you were reading our last blog post on taking a look at your year in review, you might’ve been getting the feeling--the nagging suspicion, as it were--that we were setting you up for a discussion of New Year’s resolutions. Well, we were. Just during this week, not last. (It’s all about the long con.)
And now that you’ve done your year-end review, you’ve probably got lots of ideas that you’d like to implement during 2022. But not so fast, Sparky. Everyone knows that people break their New Year’s resolutions right and left. We tend to set vague goals that focus on a nice or attractive result--”lose weight,” we’re looking at you--or, even if we do focus on a process, we don’t get specific in terms of frequency--”going to the gym,” we’re looking at you next.
So when you think about making your New Year’s resolutions for your business, don’t make those same mistakes. Focus on making resolutions about processes or habits that you want to pick up and about how often you’ll perform them. DON’T make resolutions about some idealized result, and DON’T be vague about timing. Those are escape hatches that will let you wiggle out of holding yourself accountable.
You can probably think of lots of New Year’s resolutions that fit these criteria if you try, but here are three--just a measly little three, not a heavy lift, don’t worry--to get you started:
At Haven, we have a big bias in favor of small business coaches. When you want to get better at something, you hire a coach. Want your kid to get better at basketball? Put him on a team with a good coach. Want to improve your golf swing? Take a lesson from a golf pro. Want your kid to get better at playing piano or violin? Better find a good music teacher. Want to improve your ability to run your business as well as you possibly can? You get the idea.
Try making a resolution to talk to a small business coach even just one time this year. (More would be better, but just get that first meeting on the books.) The beauty of this resolution is that it isn’t some vague outcome like losing weight. It’s a process goal, not a result goal, so it’s easier to achieve it, but as inputs go, this one makes it more likely that you’ll achieve a good result. A small business coach will help you think through your business from a perspective that you haven’t seen before, will help you identify opportunities for improvement, and will hold you accountable.
Don’t know any small business coaches? No problem! Reach out to us here and we’ll help you find one in your neck of the woods.
We threw you a softball for your first New Year’s resolution to get things started, but now let’s up the ante a little bit. For your second resolution, we recommend committing to producing financial statements for your business on a monthly basis. If you’re already doing this, then just skip ahead to Resolution No. 3, but otherwise, be honest here. Do you just dump receipts and expense tracking your accountant right before tax time and have him figure it out? If so, then it’s time to acknowledge what that practice is costing you.
When you produce your financial statements monthly, they’ll never become a gating item preventing you from getting a loan on a timely basis when a lender expects to see them before making that loan. You may not need access to credit all that frequently, but trust us that this one is a big item. Cash management can be a killer for small businesses. So make sure that you’ve done the homework necessary for getting access to credit when you need it. If you hit a rough patch, then this could be what helps your business survive. And in the meantime, having monthly financial statements will really help you with--spoiler alert--Resolution No. 3 below.
But what if you really hate, hate, HATE accounting? (And if you aren’t an accountant, then we’re betting that you probably do.) Well, your kids probably hate eating vegetables, but you still make ‘em do it, right? Same thing here, but not quite as bad. Your kids can’t really pay someone to eat their vegetables for them, but you can get someone to help you with the accounting if you dislike it that much. Tons of small businesses hire bookkeepers for this very reason. And if you’re using Haven, then Haven’s general ledger will automate the bookkeeping for simple items like accounts receivable and cash receipts. You can also give your bookkeeper or your accountant access to Haven so that they can just handle any difficult accounting issues for you. So stop putting off the accounting; grab some broccoli and chow down.
Once you start producing your financial statements monthly, you’ve also removed the largest obstacle to keeping Resolution No. 3, which is reviewing your key performance metrics on a monthly basis. Start by thinking about whether your business is a volume business or a margin business. Then start keeping track of these nine key performance metrics. You’ll notice that some of them come right off your balance sheet or your income statement, or can be easily calculated based on numbers on those statements, so sticking to Resolution No. 2 is going to help you out here.
Once you start reviewing your key performance metrics on a monthly basis, you’ll start gaining new insights into your business. Spending all of your time working in your business tends to focus you on doing the same things over and over, but when you’re taking a step back and looking at your key performance metrics, you’ll start to spend more time working on your business. You’ll start to see new opportunities for growth and greater efficiency, and your business will get stronger as you start taking them.
So talk to that small business coach, start churning out those financial statements, start tracking your key performance metrics, and start discussing both of those things with your small business coach and you’ll be off to a great start for 2022 and beyond!