Find time to focus on closing out the sales year and take strategic steps to set up your business for a fast and clean start in January.
“What is the best use of my time right now?” is the constant management question being asked on Main Street. And in no other part of the year are we more challenged than in December, when we’re faced with allocating time to two very powerful imperatives: The tactical focus on closing out the sales year as strongly as possible, while simultaneously taking strategic steps to set the business up for a fast and clean start on January
In his book Blue Highways, William “Least Heat Moon” Trogden said his Osage Indian grandfather once told him, “Some things don’t have to be remembered, they remember themselves.” It’s a natural law that the year-end sales push doesn’t have to be remembered, it remembers itself. But as we come to the two-minute drill in the last quarter of the marketplace game our business plays all year, committing precious time and energy to preparing for the future requires the discipline to remember it ourselves.
There are many areas to focus on this month to help you start the New Year clean and fast. Here are five to get you started.
Throw Stuff Away
Even if you’re not a pack rat like me, you’ve accumulated stuff you don’t use anymore. For example, one of the markers of a 21st century office is the digital graveyard. Unused or broken computers, monitors, etc., may have some value, so call a tech recycler and convert it into cash. If you can’t sell it, give it away or throw it away, because it’s in your way.
Empower Producers & Cut the Dead Wood
Year-end is also a great time to take stock of employees who’ve demonstrated leadership and engagement. Recognizing the performance of those individuals will motivate them to a fast start in the New Year.
The only thing worse than firing someone is letting an unproductive employee hold your team’s performance hostage for another year. A byproduct of identifying those who perform is it also shines a light on those who don’t. You owe productive people the most effective organization possible, which means you have to let the unproductive pursue their careers elsewhere.
Classify customers by gross profit into four groups, from the most profitable A’s to the least profitable D’s. Worship the A’s, cater to the B’s, encourage the C’s and teach the D’s about self-service. When the cost of a customer’s expectations encroaches on your profit margin too much, allow them to join your unproductive employees—elsewhere.
As with customers, take a new look at your products and inventory by identifying the most profitable A’s to the least profitable D’s. Stock all the A’s, a few of the B’s and maybe a couple of C’s. But never let a D spend one night under your roof unless it’s paid for. Remember, profitable inventory management means just-in-time, not just-in-case. And write off obsolete and damaged inventory. Take the hit now.
Face A/R Reality
Take another hit by writing off uncollectable accounts receivables now, so you can start January with a clean list. A/R write-offs are tax deductions this year, and if you wind up collecting them next year, it’s gravy. The only thing more troubling to a banker than uncollected A/R is a customer who doesn’t have the discipline to deliver a clean balance sheet.
Each New Year deserves to have the maximum opportunity to be successful, so don’t saddle it with obsolescence, waste and bad decisions. By taking these steps—and others from your own list—you’ll prove to yourself, your team and your banker that you have the discipline to make the critical decisions for which successful managers are known.