By Kenneth Surbrugg, Director of the Center for Entrepreneurship at Missouri Southern State University
In 1987, R.E.M. released the song “It’s The End Of The World As We Know It.” It may not be the end of the world, but it is the end of 2022. As you reflect on the year, it is also time to focus on the year to come.
In his book The Entrepreneurial Mindset, Kyle Garman identifies eight domains that make up the entrepreneurial mindset. One of those domains is to have a future orientation, which means to be optimistic and focus on acquiring the skills and knowledge needed to move forward. These individuals are curious and have a positive attitude now and into the future.
Now is a good time to adopt a future orientation and review the following areas within your business as you prepare to move into 2023.
Goals — What do you want to accomplish in 2023? Where are you now and where do you want to be in the future? Many small business owners get frustrated when they see their competitors grow while their business remains stagnant at best. The business isn’t going to grow for you; growth takes effort and resources. Where do you want to go and how do you want to get there? Be realistic and set S.M.A.R.T. goals (Specific, Measurable, Actionable/Achievable, Realistic, and Time-Bound). Be accountable for your actions, and then work toward your goal.
Budgets — Now that you have set goals, how will you fund these initiatives? What is your budget for 2023? Where do you see growth opportunities, and do you have the flexibility to change your budget in mid-year? I heard of a regional business that had the opportunity to upgrade their equipment by purchasing it from another business that was closing. However, when the opportunity came, they could not afford it. They had too much money tied up in other obligations and no room for additional debt. So, they had to pass it up and let someone else buy the equipment for pennies on the dollar. As the clock strikes midnight for 2023, do you know how much lending capacity you have for opportunities like this? Do you have enough in capital reserves?
Tax Planning — You should have already had conversations with your accountant or your tax preparer about pending 2022 profits or losses. What impact will your goals and activities have on your taxes for 2023? What investments need to be made next year and how will these decisions impact potential tax liabilities? This may not be your central focus as you move forward, but you should be aware of any potential tax liabilities when making decisions about next year.
Insurance — If you are planning to grow, what insurance needs will you have? What changes do you anticipate in your business assets? What are your coverage limits? What is your deductible? When is the last time you sat down to review your insurance coverages?
Human Resource Planning — What skills do your employees have and what skills do you need? Are you anticipating hiring interns or employees next year? What salary or hourly rate will you need to consider as you figure out your human resource planning needs? Are there any certifications or skills training that you can offer your staff? What can you do to ensure compliance within your company?
Customer Analysis — Are you selling to the same people or has the market shifted? Consider the pareto principle: 80% of your revenues come from 20% of your customers. So, which customers make up the top 20% of your business? How diversified is your customer base? Are you seeing inquiries from other customer segments? If you are, are these inquiries worth the time, money, and energy to invest? Who else might need your products or services? Are there other blue oceans for your business to pursue?
Marketing Review — Considering your existing and potential customer segments, what changes do you need to make in your marketing efforts? Are you getting any traction with your social media marketing? Is your website current and easy to understand? Is your message easy to read and understand? Have you talked to your customers about your marketing?
Work / Life Balance — With this being said, are you taking time for you? I heard a local businessman speak about the balance of five several years ago and it stuck with me. He talked about the balance of the five crucial areas in your life: work, family, physical, faith, and friends / community. The balance does not have to come in equal times – but are you spending time in each area to balance yourself? Are you taking time to do some sort of physical activity? Are you spending quality time with your family? Are you taking time for your faith? Are you doing something proactive for your community or spending quality time with friends? What is your plan for achieving some sort of work / life balance in 2023?
That is quite a list to consider as we enter the home stretch of 2022. I hope that this can help you out as you think about what lies ahead for next year.
“The most reliable way to predict the future is to create it.” – Abraham Lincoln