Can you believe we are already closing out on the 3rd quarter of 2015? If your company has had a year like ours, probably not—but that is likely great news! As we’ve been flying through the months, we have hardly had time to look forward to 2016—but look forward we must now if we want to stay ahead of the game in our planning and business strategy. While this list isn’t exhaustive, these are some things to think about when getting together your 2016 planning initiatives.
Draft Your 2016 Annual Budget
Annual budgets are an interesting animal. Every company has them but not many really seem to take the time to establish them properly. If you have revenue growth projections or upcoming changes to your cost of services, your budget needs to reflect the resources and allocations you expect to drive them. Did you see a tremendous uptick in your social media-driven conversions? If you’re planning to follow that this year with more budget, you will need to consider all the resources that go into your spend and update your entire 2016 budget accordingly. This may put more sales staff into place, require new reporting and analysis systems or increase your content budget. Just remember that nothing exists in a vacuum.
Benchmark Your Revenue Growth
It is one thing to aim for revenue growth—it is quite another to chart it out. Have you regularly grown year over year? What has driven that growth? Does it translate to additional growth in the upcoming year? If you are building out marketing channels, support lines or products, you will want to accurately forecast your revenue growth so you can predict and prepare for the upcoming year’s needs.
Review Your Cost of Goods or Cost of Services
Now is a good time to check on your cost of goods or cost of services. Are there upcoming industry events that may alter the price of materials that factor into your cost of goods? Do you expect adjustments to your payroll that may directly affect your cost of services? These figures are the underlying factor in your gross profit—a number that is of critical importance to your business success. Make sure you know your true costs today and you know what may affect them in 2016.
Established Your Projected Gross Profit
If you have crunched the numbers for your cost of goods or cost of services, you will be well equipped to deal with your projected gross profit. This number will help you look forward to new investments or purchases you may be considering, help you determine how much capital you have to invest in your business, and play a key role in evaluating your business success.
Inventory Your Resources and Fill Any Anticipated Gaps
Last but not least, take time to survey your resources—across IT, software, human capital and intellectual property—to determine if you have what you need to bring your plans to fruition in 2016. Do you have enough sales staff? Are your servers prepared for your data needs? Do your vendors have the scalability to serve your growing requirements (for example, do your accounting services have the add-on capabilities for your deferred revenue and prepaid expense reporting that you plan to add next year?) All of these questions need to be asked well in advance of when you actually need the resources available so you can be sure to be ready when you do need them.