Have You Made Your Plan For Next Year?

What are you waiting for? Your plan must be formulated immediately so it is active January 1, 2011. If it’s not then you will be working with an 11-month plan and will only get eleven months of results.

Here is the drill:

• Involve as many people as possible in the planning process. Certainly all your managers, charging each one to come up with a plan to maximize profits and control costs. Included will be projected productivity, projected additional employees, requirements required to reach your projected goals and/or additional equipment, etc.

• A sales and marketing plan must be assembled with appropriate budgets and schedules, i.e. what and by when. Internet development is mandatory and must be budgeted for if not already included.

• An operational plan and budget must be created, adding key indicators as well as teams, training and cross-training.

• You need a financial plan and pro forma cash flow for the company for the year. Any cash or credit requirements falling out of this plan need to be identified and resolved or a new plan with fewer requirements needs to be designed. Do your pro forma cash flow and all projections accurately, do not provide “conservative” or lower than expected revenues and higher than expected expenses just to be certain you can beat your estimates. This is not the way to plan. Put your best estimate forward and then make it happen.

• Your managers should start from a zero budget position, not last year’s budget. Force them to recreate and defend every aspect of it.

• You must establish overall company goals and the managers must define how these goals will be met and supported by each departments appropriate contribution. The company must be balanced with cash, marketing and production all capable of delivering the projected requirements and with no excess people, equipment or spending in any way, balance is the objective.

• No overtime should ever be allowed, increase productivity first.

• Include a paycheck for the owners, a rainy day fund for the company, and still show at least a 10% profit or don’t do the plan. Make it work following these parameters or you are wasting resources and time.

• Cut payroll first and increase productivity–this works.

• Use the Internet for marketing and cut traditional media buys. Reinvent your business, emphasizing profit not volume.

• Tighten controls to stem waste.

• Of course, do your debt workouts if you haven’t already. This is a basic requirement for successfully navigating the downturn. Make certain this is taken care of and add to the cash flow reasonable expectations for financing the debt workout as well as making certain you are in default on all payments now.

Get ready, a new year is on top of us and now we have some experience and know what next year’s economy is going to be like–just like this year’s or possibly even worse, not better. Get ready, get profitable. Plan today.