Even though it has been a long haul since the recession, it’s nice to see more optimism as we close out this year and head into a new one. A November 2014 report by Kiplinger asserts that economic momentum is back on track. Growth is projected to continue at a 3 percent rate, consumer confidence is gaining strongly, hiring is on the rise, and job openings are at a near record level.
According to earlier studies from Forbes Insights, many entrepreneurs and small businesses not only feel the lessons learned during the past few years have helped them survive, but the recession also exposed flaws in their business strategies that they were able to fix. Here are some recommended strategic planning initiatives, culled from multiple studies, that you can apply to your business in the New Year:
Better Cash-Flow Controls: Obviously, falling income over the past years put additional pressure on small business cash flow. Some companies turned to cutbacks over boosting financial reserves; others focused on reducing overhead and expenses. But you need a balanced strategy, along with new lines of credit and financing.
More Focus on Strategic Planning: Small business owners now recognize the importance of planning amid the new economic environment and want to spend more time doing it. Less than half indicated they had a strategy in place during the recession, or to guide growth during the coming recovery period. This should be core for you.
Fight for More Government and Policy Support: Small businesses now believe they have played a key role in the U.S. economic recovery, but in spite of, rather than assisted by, support from the federal government. You can join the fight for action, particularly for even higher Small Business Administration (SBA) loan limits.
Continue to Increase Operating Efficiencies: A majority of small business leaders intend to be more aggressive going forward by implementing a range of actions to advance their businesses. Many cited a greater focus on cost cutting and efficiency as the number two step to achieving growth, with increasing sales still number one. See where you can maximize this type of profit.
Add New Revenue Streams and More Aggressive Marketing: At the same time, most small businesses plan to spend more on digital marketing in the year ahead, and pursuing new revenue streams is seen as a top priority for transforming bottom line profits. This approach will help you diversify and broaden your business’s product lines and services.
Grab Market Share from Competitors: A large majority of respondents to these studies acknowledged that the old way of doing business no longer works and that they need to find new ways to take advantage of market opportunities. Many are planning to be more aggressive in grabbing market share from competitors, and you should, too.
If small businesses tackle these initiatives, we will be supporting economists’ forecast and moving the U.S. economy toward a self-sustaining and continuing economic expansion. A healthy manufacturing sector, likely to gain even more strength in 2015, is creating an impetus to invest. Recent drops in gas prices are now extending to diesel and even home heating oil.
The National Federation of Independent Business’s Small Business Optimism Index is now up to 96.1, and is working its way back to pre-recession levels. This was led by a modest increase in the net percent of owners who plan to increase capital spending and more who expect higher sales in the next few months. But overall, small business owners are still looking for more clear direction to drive their optimism.
My take on all this is that entrepreneurs are seeing some light at the end of the tunnel, and the light is no longer a freight train heading straight at them. We always learn more when times are tough, and we should come away with more strength and determination, as well as real results. It’s time to soak up the optimism, do some real financial planning, and push the limits on all business fronts.