As summer starts to wind down and vacation season nears it’s end, it’s a great time to start thinking about the second half of the year, along with the strategies and tactics you’ll employ to end the year strong. With that in mind, here are four things you can do to wrap up the first half of the year and launch a profitable second half:
Review Your Goals: If you’re like most business owners, in the first few weeks of the year, you set some goals and objectives for growth and profitability. Did you meet your projections or did you fall short? Without a crystal ball most of us make assumptions regarding the market, our customers, and our products to make projections about sales, costs, and what it will take to deliver our products or services. Using our experience and track record, we establish goals and milestones. If our projections don’t pan out as planned, it makes it difficult to achieve our goals. The halfway point of the year is a good time to see if our prognostications were correct, or determine if something unexpected happened.
Regroup or Recommit: After you’ve reviewed the first half and have a good understanding of your company’s performance against its goals, you can determine whether or not it makes sense to stay the course or readjust your expectations for the end of the year. This isn’t only true if the first half has been a challenge. Sometimes the stars align and you find your business in the enviable position of doing better than expected.
As a boy I used to spend a few weeks each summer on my grandfather’s farm. He would start the day early and work until nightfall. He thought it was important to “Make hay when it was time to make hay.” In other words, when things are going well it’s not the time to sit back and relax. Rather, he would suggest stepping up the effort to take advantage of the great business conditions to make as much “hay” as possible. At this point in the year, it’s a good time to evaluate whether you need to stay the course or regroup and recommit to a new set of goals and objectives—to maintain your winning streak or to set new goals and objectives based upon unforeseen market conditions.
Review Your Business’ Financial Metrics: As a small business owner I didn’t do this anywhere near often enough, but the year’s midpoint is a great time to sit down with your accountant (or bookkeeper) to go over the important financial metrics that will illuminate whether or not your business is healthy and growing or struggling and floundering. A mid-year review with a trusted financial advisor is a great time to measure progress, set financial goals, and take the pulse of your business’ financial health.
Over the years I’ve become an advocate of transforming the relationship with the company’s CPA (or other trusted financial advisor) from a quarterly transactional relationship, relegated to appropriate tax filings, to engaging them on a more consultative and educational partnership level. Larger companies have a Chief Financial Officer (CFO) who takes this role and responsibility. Most small business owners, if they don’t possess this expertise themselves, rely on contractors or consultants to help them navigate what the financial numbers are telling them. Don’t be misled that having a little cash in the bank at the end of the month is all that is required to build a thriving small business. Dive into the numbers to make sure.
Rally the Troops: Regardless of whether or not you decide to stay the course or regroup, it’s important to get your employees on the same page. The business press talks a lot about “transparency” and how as a business owner you need “visibility” into everything happening within your business. In my opinion, these two words describe two similar, but different, things. Visibility into what’s happening within your business is very important (you could call it a top-down view into your business’ operations), but it’s transparency (or a view from the bottom) that gets your employees engaged and working with you to reach your goals. Let me explain.
Early in my career I worked for a small business owner and his two other employees. At the beginning of every month, we would gather and discuss how we did the previous month and what our goals should be for the coming month. He made it a point to post those goals where we could see them every day. And, because he understood the value of being mindful of where we were on a daily basis, he broke them down into daily and weekly goals to keep us aware of how we were tracking against the monthly objective—along with a comparison of our performance 12 months ago. Giving us transparency allowed us to take individual ownership of the monthly objectives, gave us a little extra motivation to perform at our best, gave us a target to hit and be proud of, and helped him achieve his business goals.
Running a successful small business isn’t really rocket science, but a healthy and thriving business doesn’t just happen. It’s a combination of a lot of hard work and taking regular and calculated strategic steps that help you advance your business objectives. By taking action on these four suggestions, you’ll have a better idea of how your doing, what (if anything) you need to do differently, and can set reasonable objectives for the second half of the year.
Now, it’s time to get back to work.