Touted by some as ‘the worst year in history’, 2016 even inspired a parody horror film, due to a seemingly endless slew of environmental, geo-political, technological, cultural and social bad news.
The year itself became a meme and it was commonplace to blame misfortunes on the ‘curse’ of 2016. But many of the issues that arose over the last twelve months are set to follow us into 2017.
Far from doom-mongering, however, I want to focus on the positive – and on the things that we can control. If nothing else, 2016 has taught us that anything can happen, so my advice for this New Year is simple: small businesses need to get into the best possible shape to prosper, while building resilience to cope with change.
So where to start? As with so many things in business, it begins with data.
Time to crunch the numbers
With potential challenges ahead, there are clear benefits in taking time to ensure that a firm’s current products and services on offer are working hard. Business leaders can use product and accounting data to calculate the margins on products and the profitability of services, which may have changed since the last review. Of course, pricing strategies can be subtle and complex, including a mix of loss-leading products or services designed to attract customers, or premium pricing on perceived high-value items. What matters is that there is a logical and planned strategy in place.
Other useful hygiene checks include a SWOT analysis (anticipating strengths, weaknesses, opportunities and, crucially for 2017, threats to the business in the coming year). A profit and loss review will also help owners to see where the business is potentially wasting money.
Time to rethink relationships
The most effective profit and loss reviews assess existing supplier costs, as well as relationships – from utilities and IT, to product suppliers or consultancies that the business employs. Big organisations have formal tender processes to get the best deal possible – without these, small businesses may be missing out, so tools such as price comparison sites can be useful.
There is a lot to be said for tried and tested suppliers, especially where strong relationships exist, but unless you look around, or ask; you’ll never know if you’re getting the best deal.
Suppliers can be critical for small businesses; there may even be possible sales opportunities within the current supply chain. Professional services suppliers such as accountants, lawyers and consultants can be particularly useful when it comes to making introductions to their extended networks, to help generate new opportunities.
Time to put yourself out there
The New Year is a good time to think about enhancing a business’s credibility and reputation. Marketing and PR can be expensive, but there are options to put the word out on a budget and small businesses are master of invention, whether using social media, leveraging strategic partnerships or creating grassroots campaigns. The key is that marketing activities must align to your sales goals and business objectives if they’re going to really deliver a return on investment of time and money.
Any fresh start presents a great opportunity to think bigger by being ambitious in a strategic and considered way. This doesn’t have to mean overzealous spending, or a ruthless mission for profits – 2017 could be the year of smart and targeted growth.
To find out how KPMG Small Business Accounting could help your business think bigger in 2017, request a callback for a quote today.
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