Phew… it’s been a big year.
And from chatting to others and looking around my news feed, it seems I’m not the only one to feel that way.
It was a year of ups and downs (aren’t they all), a year which pushed boundaries, and a year which showed us all that we were ready to close off the decade and start fresh.
Which is exactly what 2020 feels like – a fresh start.
But before you get too far ahead of yourself, take a moment to do a complete review.
Because there is no point repeating the things which aren’t getting you results (they are probably taking up large chunks of time and energy that could be going elsewhere).
Instead, we want to look for the bits that are working for you, getting you results, and better still, making you happy.
Check out the list of things to review below, and I’ll share how mine went at the end.
4 things you should look at as part of a great review,
1. Find your profit margin
Yup, I’m going to start with the money, because businesses make money. If you want a hobby, that’s fine, or if you want a Not For Profit that’s fine… but I want a business, one that pays me a wage and makes a great profit.
You can do this with a profit and loss statement. (P&L)
These would normally be run monthly, but if you haven’t done one in a while, now is the time.
A P&L usually has five main components:
- revenue (sales/turnover) – this is all the money which came into your business
- cost of goods sold (COGS) – this is the physical cost of the things you sold. It includes production costs, labour, materials etc (so the printing of the book), but not other costs like shipping or marketing
- gross profit (revenue minus COGS)
- expenses – this includes all of your expenses. Depending on your business structure, this may or may not include your wage, please check with your accountant for personal advice
- net profit (gross profit minus expenses)
You should know your net profit (that’s the money that was left in the business after ALL the expenses have been paid).
You will be required to pay tax on your profit, so this your net profit is pre tax.
If you’re unsure about any of this, it’s worth talking to your bookkeeper or accountant, and getting sound financial advice.
If you don’t have any profit, you need to seriously look at the way you run your business.
And if you’re not happy with your profit margin, then this is the perfect time to review your COGS and expenses.
2. Know where your profit came from
Are there certain products or services which are making a profit, and others which aren’t?
This is often the case with businesses. It doesn’t mean you need to stop offering something neccessarily.
Supermarkets and big box retailers call the items that make them no money “Loss leaders”.
These are the items that might be on sale for a great price, or even just the everyday items which are priced very cheaply. You go to the store to buy these products and end up buying everything else as well.
You might use the loss leader strategy in your business too, using products or services which don’t make a profit to attract new leads and build your client base…
But, this needs to be intentional. We don’t want you to be selling hundreds of something, only to find there is no profit in them at all (or it costs you money to sell them).
If you’ve got products or services which produce a great profit margin, review where they sit in your business strategy, and how you can increase sales of these items.
3. Review how you feel about your business
It’s all well and good to be making a profit, but if you hate what you do, what’s the point?!
The change of year (and the change of decade) is the perfect time to take stock and work out what you really want to be doing.
If you’re feeling a bit stale in your business, maybe you can look at offering different products or services… or maybe change niche…. or maybe leave it all together and look for something new.
The wonderful thing about being in business for yourself, is that you get to chose what you do.
You are in control of what you offer, when you offer, the strategy you use and even how you deliver the end outcome.
If you’re not loving it, change it.
And if you are loving it – awesome, keep doing it.
Note: This is a great moment to think about what you want to do with your business… not the things that you think you should be doing, or could be doing… but the things you actually want to do.
4. Review how you are using your time
Your inbox will never be empty (well, I love to run an inbox zero, but I am aware that it always refills)
Your to do list will never be blank
There is always more to do and more to achieve
But are you using your time wisely, or are you just busy a lot.
I’ve promised myself that for 2020, I will work an average of 20 hours a week. That’s Tuesday to Friday, 9:30 – 2:30. (Plus, I intend to eat in there, so even that’s not all work time). I’m realistic… I know some weeks there will be lots of work to be done and I pull some extra hours in the evenings, but I also plan on going away during the year, so there will be weeks when very little gets done.
But I do know that I don’t want to be stuck at my computer all week, or stuck to my phone mindlessly scrolling… which is why I’ve been specific about it.
Do you feel like you work too much? Do you feel like you spend too long looking at a screen? Do you feel like you are always busy, but not getting anywhere?
This is the perfect time to review how you spend your time, and think about putting boundaries in place for 2020.
Is that it…. ?
Not necessarily.
As you reflect back on the year that was, you can review each and every part of your business.
You might want to look at the way you present yourself on social media… or the platforms you are using.
You might want to review your website, and if it is serving you in the best way possible
You might want to review your policies and procedures and make sure that you’ve got the structure in place to support you and your growth.
But if nothing else… take a moment to make sure that things are working, before you start next year repeating your own mistakes. (Trust me – learn from past Sam here, she’s made plenty of mistakes.)
And what did I learn?
Although I’d love my turnover to have been higher (it was one of my smaller years since starting business) I was realistic about this during the review process, as I took 4 months maternity leave, have looked after a baby at home full time since March, and for the first 10 months of the year, I also had a toddler at home 3 – 4 days a week.
Despite this, my profit margins are great. I’ve bootstrapped lots of things along the way across the years, and I run a lean business. My expenses are low, and I value my time, so my profit margins are great.
My review also let me see that there were some things I was running that I didn’t want to run any more (this program has already closed) and there were new things I wanted to be doing (this program has already launched and started, but more are still to come).
Taking the time to review these aspects of my business means that I know my time will be well spent next year as I work on growth and building new products and services.