Advice

Wrapping up Q1

September 20, 2022

Planning ahead is our jam. As we wrap up Q1 at MOD, we are looking ahead to the next year of our business operations. We break it down into three big questions:

  1. Where have we been?
  2. Where are we now?
  3. Where are we headed?

We take a holistic approach to projections and planning. Using our numbers as a foundation, we look at the following:

  1. Prior year financial results
  2. Current operations – clients, projects we’re working on, costs, team, capacity
  3. Future opportunities – prospective clients, relationship building opportunities, investments in the business, cost savings opportunities

Every business is different; every business owner has different personal goals and every business has different opportunities and challenges. As we head into the final quarter of the 2022 fiscal year, here are some things for business leaders to think about as you look ahead:

  • What are your personal goals this year? Be real with yourself. Think about goals from a holistic perspective: financial, mental health/emotional, physical, social, etc. This is your starting point and non-negotiable - if you aren't taking care of your own needs, the business can't be successful.
  • What are the goals of your family members this year? Are there things that your children, partner, others you may need to support that you need to slot in and consider in your planning?
  • What are your business goals this year? Consider both quantitative (numbers) and qualitative (non-numbers factors).

Quantitative considerations:

* Do you have a certain amount of profit you want to make (sales less expenses)?

* Are there $ contributions you've committed to stakeholders you need/want to achieve?

* Sales per province/country/etc.

* Total sales volume

* Total # customers 

* Is there equipment you want to buy?

* Do you want to employ a certain number of people?

* Are there expenses you want to be able to provide to employees (e.g. benefits)?

Qualitative considerations:

* Are there certain marketplaces you want to enter or grow? 

* Lifestyle opportunities for your team for employee satisfaction?

* Do you want to spend time this year developing infrastructure for your business, including processes and procedures?

* What are your company's values? What is your vision?

* Customer satisfaction metrics? (e.g. increasing delivery time)

* Employee satisfaction metrics?

* Business reputation in the market? (e.g. quality of products, brand, etc.)

* What impact do you want to have in your community?

Next, review your financials - look at prior year's results starting with the balance sheet and then moving to the profit and loss statement. The balance sheet will give you an idea of what you own (assets) compared to what you owe (liabilities). The profit and loss statement is a summary of your revenues less your expenses. Understand what happened so that you can plan to make good decisions moving forward.

Following this, plan your financials for the next year - using last year's results, understand what targets you need to hit to make your goals a reality.

* What sales volume do you need/can you achieve? Think annual, per quarter, per month, per week, per day.

* What expenses will you be incurring this year that you didn't have last year?

* What expenses will you still have this year?

* Are there expenses you can/will reduce?

* What investments do you need to make in the business (e.g. buying equipment, brand development, website development, product development, etc.)?

* Which products/services are you selling the most of?

* Which products/services are profitable (making you money)? Which ones are not profitable?

***

This should give you a good start. Projections are a process. It's important that you are comfortable with your goals, targets, etc. If you're not, then you're headed to a path of financial trouble which is not a good spot to be in. 

We can help you plan for the year and then break it down by quarter and by month to help keep you on track. This is a service we offer to our clients and one that is helpful when they have big financial/growth/strategic goals.

As a final note, we highly recommend you poke around The Finance Cafe and even sign up for their financial literacy course. It's a great way to start planning for financial success. They have a weekly podcast that offers a wealth of fantastic information - start at the beginning and make your way through!

Happy planning and projecting!

Links:

Alicia Fowler