Before you break out the New Year’s Eve bubbly with your friends and declare your small business venture a success, you have some homework to do. We’re all in the depths of year-end analysis and setting expectations for 2018. If you want to be able to boost your profit margin — and avoid repeating the mistakes you made this year — you should do a postmortem analysis of your 2017 business goals. You did create those, right?
What Should You Evaluate?
There’s more to a business than profit and loss statements. It’s important to know if you’re spending more than you’re bringing in, but you also need to take a wider look at your business. I try to focus on four categories: finances, happiness, customer growth and work/life balance.
In addition to tracking your income over the previous year, determine if you were able to work the same amount of hours. Did surgery or illness take out a chunk of your workdays? Or did a big, one-time client or project skew your average income?
I also like to dig into the number of pieces or projects sold versus income. One of my goals for this year was to scale my business by increasing my income while completing fewer projects. I needed to secure more high-paying gigs to trim hours from my work week so I could fit in more self-care time — and I’m happy to report that this shift was successful.
Do you actually like what you’re doing? I know you were in love with your career when you launched, but do you still wake up with a positive feeling most days? If you don’t enjoy the process of growing and running your business, you’re headed for burnout — or worse, business closure.
Sometimes all it takes is a pivot in services or products to amplify your happiness factor. As I evaluate my 2017 progress, I’m eyeing a particular revenue stream that makes money, but gets kicked to the end of the week over and over again because it’s tedious and a low earner. It might get dropped in 2018.
3. Customer Growth
This factor isn’t as cut and dry as increasing customers to increase sales. In some businesses, you have a few repeat customers, and the goal is to get them to hire you for more projects.
Look at the number of projects and number of customers you invoiced in 2017. Are they moving in the direction you want? Both should be on the upswing, unless you’ve hit your maximum capacity and you’re turning away business routinely.
4. Work/Life Balance
For me, this is the biggest factor to evaluate, even above money. I know. This sounds crazy to my number-crunching, left-brained friends, but I’m a firm believer that your biggest and most fragile business asset is your health.
When you work 24/7 and never give yourself time to relax, be social or take care of your mind and body, you’re putting the future of your business at risk. You are your business, and if you burn out, your business goes up in flames. Did you have a healthy balance of on-the-clock time and free time in 2017? I break up my desk time with yoga classes, lunches with my husband, short naps, reading books and catching up on housework.
Creating Small Business Goals
As I lift my pinky to the up-turned corner of my mouth Austin Powers-style and declare my intent to earn one million dollars in 2018, I know it’s just not realistic. I’m a one-person business with no intentions of expanding my crew beyond my faithful office pets. So, I tend to look at my bookkeeping records over the year and base my projections on how much work I can reasonably complete.
To do this, I analyze how productive I was each week and how that translated into dollars. Then, I look for productivity gaps on my Google Calendar and tighten those up. What can I outsource? What can I cut? How can I spend more of my working hours on billable tasks rather than unpaid business operations? For example, you can use an app like Buffer or Hootsuite to pre-schedule social media posts to go out to your business pages during your workday so you don’t get sucked into watching funny goat videos each time you log in to post to your business pages.
Giving Yourself Some Extra Motivation
Some of my friends and family think I take this small business ‘thing’ too seriously. Why would I spend time crunching numbers, reviewing my previous year’s output or make plans for next year? Hello, this gal has bills to pay and a career to nurture.
When you’re a solopreneur, you have to continually motivate yourself, whether it’s with financial bonuses, extra time off or that new pair of boots you’ve been eyeing. There’s no boss lingering over your shoulder or year-end wrap up meetings complete with financial projections for 2018. You have to create the positive momentum yourself and stick to it if you want to make progress.
When setting expectations for the upcoming year, aim high. Challenge yourself. You took the plunge into this lifestyle, now it’s time to own it. Bring it on 2018, we’re ready for you!