The pivotal fourth quarter of 2019 is here. In preparation for prospecting 2020, now is a good time to ask yourself the following question:
What worked (and what didn’t) in 2019?
For the things that worked, the answer is simple: Do it again and more often.
The tougher part of this evaluation is looking at what didn’t work, what that means, and what the next steps are. Evaluating failure is difficult because you must discern whether you should continue to tweak a product line or strategy; or cut bait and focus on a different tactic, idea, or measure.
Some aspects of your business that you will evaluate include:
- Distribution: There are many ways that your product can be delivered or provided to your customer. Some are better than others; for example, is it more economical to provide a service live or via an online platform? Do you provide services one-to-one? If so, it’s more costly to travel to various customers unless this is part of your unique value proposition which makes you stand out from competitors. You may need to evaluate what is more important: profitability or reputation?
- Employees: Occasionally companies will hire during transition periods when growth is anticipated or new company departments are forming. For example, hiring a salesperson to help expand in a retail market for your products. However, what happens if the retail market begins to underperform or your employee is not what you expected? Take a look at the circumstances surrounding an employee hire and evaluate if you would hire this person today in the current business environment that you’re operating in. If the answer is no, then tough need decisions need to be made involving reassignment or termination.
- Overhead: Let’s say you’ve had the same relationship with your medical insurer for the last several years, and you’ve never reviewed the policy. Or perhaps you moved your business to a location with twice the needed square footage because you anticipated growth within the next 24 months — that has not yet occurred. Or lastly, you’ve had the same IT helpdesk supporting you, but you are questioning whether they have provided any value. Examining behind-the-scenes “auto-renews,” etc. is important to see if there are areas to cut costs and evaluate services provided.
In all of these examples, it is critical to take an analytical (and not emotional) view of what to do next. It’s never easy to potentially change vendors with whom you have long-term relationships, or tell an employee that they will no longer be working with you. Yet, when it comes to operating your business and making it profitable, business owners need to move the needle in the right direction.
It’s always scary to go into a new market or take your company in an unfamiliar direction; however, to ensure your company reaches its full potential, these tough decisions need to be made. There is too much on the line to make these decisions in a vacuum. Look to another professional, like your CFO or COO, to bounce ideas off of. Ultimately, in order to ensure the sustainability of your company and the employees that work for you, these decisions must be executed expeditiously to ensure a strong start to 2020.
Take-away: When faced with hard decisions for your business, it’s important to bring in a partner or unbiased observer to assist in the analysis. Reach out to AcceleratingCFO if you need assistance in preparing your 2020 budget or to brianstorm key strategic decisions.
Co-founders & Managing Partners