Last week, I posted about Budgets. When you are done with your Budget, you might be unhappy with the bottom line results of it. So, the question is “What do we do now?” The answer is Change. It could be some new product or service. It could be a cost saving initiative. The question is where to start and how to create these kinds of initiatives.
If you recall, a few (fire interrupted) weeks ago we talked about a SWOT. That should help get the juices flowing. Look at the Strengths and Opportunities and see if there is something that can be capitalized on by a new initiative. Alternately, you can look at shoring up your Weaknesses and protecting from Threats. A SWOT evaluation can be really effective when combined with a look at your Target Market and Ideal Customer. Is there anything here that helps align the initiative from where you want your best customers are going to come from.
The second thing you can do is look into your Financial Statements. Is the bottom line enhanced better with a cost initiative or a revenue initiative. I have some clients that have extraordinarily lean organizations. For them, it is much better to go after revenue. They have cut costs to the bone, and it gets harder to cut over time. Others might find that it is better to lower costs in a substantial way. There are companies that provide standards for how companies look financially. You can line up your finances against those standards and see where there is variance. That makes a great way of comparing your company against comparable firms and seeing how you stand.
The final source is what is going on in the general market. Internet and Information Technology is dramatically changing the way business is done. How up to date is your firm? What are the local and regional economic trends? What are your local competitors doing? Are there older businesses that might exit the market? Have you heard about new market entrants? What is your local business journal writing about? All of these provide fertile grounds for thinking about something new.
The best thing is to have a moderate list of things that you can do and narrow it down to a smaller list of things you will do. Depending on the size of the business and the size of the initiatives, there should be no more than 3 top level initiatives and for most small businesses 1 is probably a good number. Better to do it really well than to half do many things.
Have a great day!
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