3 Ways To Redefine Your Business In 20165 January, 2016 / Articles
For entrepreneurs, the end of the year is a time to look back, take stock and start planning ahead for how to take their businesses to the next level. There are many great opportunities for improvement going forward, and I’m happy to say that none of them require spending more time at the gym or swearing off chocolate chip cookies. If you’re looking for ways you can work on improving your business starting in 2016, I recommend three areas to consider.
Setting financial goals
The researchers at Statistic Brain report that among the general populace, a top resolution is managing money better — specifically, saving more and spending less. This is one area where the entrepreneurial sector isn’t that so different from everyone else. After all, whether you’re talking about personal or business finance, it’s natural to want to improve. And what better time for a fresh start than the beginning of a new year?
If you’re not sure how to determine the best financial goals for your company, the accountants at Smolin recommend goals based on where you are in the development of your business. If you’re a first-year startup, for example, you’ll want to do some basic work on doing a better job of managing cash flow and creating a budget for your business. If you’ve already got a few years under your belt, though, it’s time to focus on goals for growing revenue and reducing costs. And in that sense, an entrepreneur’s resolutions aren’t that different from everyone else’s at all.
One very specific suggestion from entrepreneurial consultant Barry Moltz is that business owners resolve to learn to fully understand their financial statements each month. When you don’t come from a financial background, and you’re swamped with new business pitches and other priorities, it’s easy to start to think it’s OK to leave the interpretations of profit and loss, cash flow and other financial data to your accountant. But they’re extremely useful for business planning, and resolving to understand them better and use them to make more-informed decisions is a resolution you won’t regret.
Creating an innovation strategy
It’s a good bet that, like many successful entrepreneurs, you’re in business because you know there’s a better way to do something — and you’re the best one to introduce it to the world. An innovation strategy lays the foundation for you to succeed in doing just that. Start 2016 by thinking about what you can do to pave the way for innovation — and resolving to make whatever that is a fundamental part of your company going forward.
Start with a look at what other companies are doing to foster innovation. Fast Company recommends looking at the successful strategies of what it calls big companies that act like startups. Those strategies include tapping outside collaborators to spark creative thinking, taking small steps rather than always waiting for the next big idea and resisting the temptation to invent everything in your company — especially when a perfectly good way of doing something already exists.
And remember, strategy is important, but unless you also resolve to execute on your strategy, it won’t get your anywhere. For example, the top tip on consultant Matt Kingdon’s list of 10 tips for innovation is making sure your business culture supports innovation. You can have the smartest strategy in the world — and I encourage you to strive for that — but unless you commit to supporting it with what Kingdon calls an “innovation environment,” you’ll have a tough time getting that strategy off the ground.
What’s an innovation environment, exactly? It’s a place that has practices in place to support innovation, like the outside collaboration that Fast Company suggests. Different things work for different companies, For some, just giving people lots of free time to think is key. BrightHouse espouses this. Taking it a step further, Google mandates it, requiring everyone to dedicate one day a week to side projects. Think about what your business can do support innovation and resolve to put those measures in place.
Developing a succession plan
Contemplating what your company would do without you probably doesn’t come naturally to you as an entrepreneur. After all, that business is your baby, and you’re the one in the best possible position to steer it forward in the right direction. But let’s face it: Things happen. If the time ever comes that you can no longer lead your company — or no longer wish to for some reason — you need to have a plan in place for what’s going to happen next.
Here at the end of 2015, before 2016 comes roaring in with new pitches, new funding, new hires and all the other things that keep you too busy to think about much else, take the time to give some thought to what you want for your company’s future. The alternative — especially if you ever have to leave unexpectedly due to illness or other circumstances — is a mad rush to figure out what to do. So plan instead to “take the emergency out of emergency CEO succession,” as the executive search firm Heidrick and Struggles puts it.
This is the one you’ll want to talk through with key stakeholders in your company, as well as with your family and perhaps also your attorneys and accountants to help with the finer points of your plan. It’s not the most exciting or enjoyable part of an entrepreneur’s life, but it’s necessary. Commit this year to establishing the plan for your succession and also to reviewing it at the beginning of every year. Companies change, and plans sometimes need to be adjusted to change with them.
Planning and being prepared for change is an important part of being a successful entrepreneur. And the time when we we mark the transition to a new calendar year is a great time to do some serious business planning. On that note, I wish you and your company a happy and prosperous 2016!