Setting personal goals in the New Year is the thing to do. However, for CEOs, COOs, and business owners, it’s absolutely necessary for growth. Consider adding these nine goals to your 2020 growth strategy.
It’s the New Year and many businesses are setting business goals for 2020. Most goals will center around growing their companies. However, with the day-to-day pressure and demands of running a business, thinking strategically about growth isn’t easy. Planning for growth is difficult because many factors influence growth and it’s hard to know where to focus your limited time and resources. Yet, not planning isn’t an option either. Unplanned growth puts pressure on operations, staff, and cash flow and puts you at risk for taking tasks without having the skillset or technology.
At Verity Commercial, we consult with business owners to make commercial real estate work for their business growth goals. To make the process a bit easier, we’ve listed nine goals we often discuss with our clients when it comes to growing their business.
1. Update your business plan – First and foremost, update your business plan in 2020. It is absolutely critical that companies establish and keep a current business plan. In our experience, most business owners have one but the plan is irrelevant because it’s so out of date. Use the plan to set goals and objectives for growth. Set Specific, Measurable, Achievable, Realistic, and Timely (SMART) goals and use metrics and key performance indicators (KPIs) to gauge how well you’re meeting goals throughout the year. Communicate the goals with your team. Having the entire company on the same page will increase your growth success in 2020.
2. Plan for your next capital raise – One of the biggest issues facing business owners during growth periods is lack of cash. Failing to plan for your next capital raise will hurt your company. Since raising capital is disruptive to your business, start early by identifying your target investors and begin qualifying them. You need cash to grow your business and how quickly you can access cash will affect your future growth.
3. Establish credit line – Begin a good relationship and build a strong credit history with your bank by applying for business credit so you have access to cash when you need it most. Credit lines work like a personal credit card and are great for short-term money solutions during growth periods. It can help you bridge account receivables and payables or help if you’re short on payroll. Use the credit line before you need it to establish a good credit history with your bank. Be aware that just like a personal credit card, there are stiff penalties for overdrawing or paying late.
4. Manage cash flow better – Cash that flows in and out of your company directly impacts your growth capabilities. As expenses increase from hiring additional staff and expanding operations, the way you manage your cash is extremely important. Find ways to improve and shorten collection time. The slightest error or holdup in account receivables and payables could greatly risk growth strategies.
5. Invest in talent –Finding the right people can be difficult. Administrator of the Small Business Administration, Linda McMahon, stated in MSNBC’s Small Business Outlook for 2020 news report that the pool of skilled workers is shrinking. This makes it harder and harder for businesses, especially small businesses, to compete for good talent. McMahon suggests working with technical schools and community colleges to influence curriculum geared toward your industry or setting up partnerships with colleges for intern programs. Also, if your business model allows it, consider opening up the pool of candidates by implementing a distributed workforce (also referred to as telecommuting or remoting) model. That way, you’re not limited to hiring only within your geographic location.
6. Reassess cost and pricing of products – With the newly implemented tariffs and new trade environment, 2020 is the time to reevaluate cost and pricing strategy. If it’s been a while since you raised prices, you will want compare your prices with your competitors. Pricing will affect your ability to grow so evaluate the value of products sold and cost to deliver.
7. Attend more networking events – It’s hard to get away from the day-to-day operations in a growing business. However, the growth of your business relies heavily on making the right connections. Through networking, you can meet new clients and find new talent. Also, build lasting relationships with other professionals so you can rely on each other for a resource or referral.
8. Improve work-life balance – The impacts of growing a company affects more than just your company. Even for top CEOs, it’s a struggle to balance work and personal life. Consider combining work calls with walks outside or use business travel time to read a book. Finding time for rest, relaxation, exercise, and family and friends boosts your energy, creativity, and productivity. Perform at your best both in your professional and personal life to bring about success in the New Year.
9. Negotiate a lease that gives you the greatest flexibility – Growth will have a direct impact on your current and future space. Allow enough space to grow with your business as you need it. You’ll want to negotiate space reconfiguration flexibility to ensure you get buildout or tenant improvement allowances put into your lease agreement.
All nine goals mentioned above begins with a current, solid business plan. If you can only set one business goal this year, make sure it’s to update your business plan.
Don’t forget to plan your commercial real estate has part of your growth strategy. Contact Verity Commercial today for advice.