If you don’t know where you want to go, how do you know which direction to head off in? sounds simple doesn’t it, but I know for a fact that most businesses don’t have a plan and start in business because it seemed like a good idea at the time.
Let’s not go mad, but start by setting out 5 things you want to achieve this year relating to income, markets, clients, systems etc. Then try to think about some overall objectives for the next 2 years, before you know it you will have a strategy for the next 3 years.
Then you can set some milestones and regularly check if you are on track.
If only it was that simple, I have seen lots of profitable business killed by cashflow. One of the major causes of this is slow paying clients or none paying clients, the problem is often made worse by having to pay staff and suppliers quickly or needing to invest in capital equipment.
It is true, that in time, profit will become cash, but be careful not to over trade and take on more work than your cashflow can sustain.
In short, if there isn’t any return, why are you doing it? what could you do instead?
It may seem odd, but many people go into business with no plan and no idea what return they might make, unfortunately, the reality is that without a profit sooner or later your business will die.
I know there are somethings you have to do, like pay tax and other compliance activities, but even these have a return because they save you from fines or worse.
So before you spend money ask yourself this question – what is my return on investment?