New Years Checklist
The beginning of the new year is a time for reflection, planning and those pesky New Year's Resolutions. Here's a checklist of things to consider reviewing during or after the holidays, as we move into a new year.
With the New Year on the horizon, we tend to start reflecting on the year just closing, thinking about those New Year's Resolutions, what we want to accomplish in the New Year and how to make a "clean start" as of January 1st. "Exercise more" and "eat better" tend to top the personal resolutions list, but when you have a business, there are more things to consider. Planning, improvements, corrections, and—not to be forgotten—taxes. Here is a checklist of some of the things to consider when you are making your New Year plans for your business.
Review Your Business Plan
Now is the time to pull out your business plan and look it over. Are you sticking to the plan? What are the next steps to take in 2018 to move forward on your plan? Have things changed, making it advisable to update or change your business plan?
If you don't have a written business plan, you probably (hopefully) have some sort of plan in your mind. Set aside some time to put it down on paper (so you can refer to it when next year rolls around). If you want to get official, check out the articles on how to write a business plan from the Small Business Administration, Entrepreneur.com and BPlans.com (A Google search for 'how to write a business plan' will bring up many additional resources as well).
Review past year sales, expenses and profit
Print a profit and loss or sales report from your accounting software (or go through your receipts) to see how you did financially over the last year. Did you make a profit? Did you make enough to pay yourself (or intentionally put your profits back into the business)?
Next, take a careful look at which products sold well and which didn't. You should seek to identify what is really working for your business, what is just marginal and where you are losing money. Which products sold the most? The least? Did certain scents do better than others? What are the profit margins on each of your products?
By carefully reviewing your numbers, you should be able to tell which products to keep in your product line, where to expand and what to drop. If the numbers tell you a particular product or scent isn’t doing well, remove it from your product line. Yes, it can be hard to drop a product that YOU really love, but go by the numbers, not by your emotion.
Plan your new products for the coming year
If you want to expand your product line (and it is in keeping with your business plan and your financial review), set your goals for new product development. Did one particular scent do so well that you want to add other products in that scent? Are you going to branch out into lip balms or lotions? Start a bath fizzie line?
To make it a little easier, Sara Wagner’s article, "Developing New Products," gives a basic guide to carrying out the research necessary to come up with new products.
Prepare your taxes
With your profit and loss statement in hand, you have already taken the first steps in your tax preparation. Using Dave Yoshida’s article, 'Tax Time is Coming!', finish up getting your taxes ready. If you think you are going to need help with the tax returns, make an appointing with your tax person now to make sure you get everything together that he/she will need.
Even though your tax return won’t need to be filed until April 15 (or March 15th if you have an partnership or S-Corporation), knowing your tax situation in advance gives better financial prediction.
Figure your manufacturing requirements
Moving right along, with your business plan in hand, records of what sold last year, plans for new products and your current inventory (which you should have done for your taxes), you have the basis for making some predictions for your manufacturing requirements for 2018. Do you expect to make 100 bars of soap? 1,000? 10,000? More? Do you have space for the materials and production? Is it time to increase your production scale? See Kenna's article, "The Ins and Outs of Masterbatching," which discusses the benefits of masterbatching.
When figuring out your manufacturing requirements, also consider whether there is any other equipment that would be cost effective. Masterbatching is one option, but also think about larger mold sizes for your soap production or bigger maxing containers. If you are making enough lotions, a lotion filler might be a good idea; changing over malibu tubes to tubes and a sealer can also reduce time per product if you have sufficient quantity to warrant the cost.
Another factor to take into account is raw material and finished product storage. If you are upping your production, do you have space to take advantage of larger bulk purchases of ingredients?
Pull your brand together
Do you have print materials? Signage? Labels? Take a moment to review them and make sure they all meet the standards of your Brand Book or Style Guide. No Brand Book? Take a day to really consider your brand and document your brand standards in written form. For some guidelines, check out How to Create a Clear and Concise Brand Identity Guide and How to Create a Brand Style Guide or do a search at Google for terms like "write a brand book" or "style guide" for other resources—there are many articles and examples online.
If you have a booth you use for craft shows or farmers' markets, make sure your presentation there is also fitting with your brand. If your brand look is "country handmade" and your target public is baby-boomer hippies, then you probably don't want glass and chrome shelving, sparkly bling or glossy signage. On the other hand, if your products are 'upscale luxe' and your target public is nouveau-rich, professional retired baby-boomers, you probably don't want wood crates, craft paper and raffia.
Whatever your chosen brand style and look, make sure it matches with your business plan and that your presentation to the public is consistent.
While you are at it, take a quick look at all your labels to make sure they also meet your brand style and are legally compliant. The Legal and Compliance section of the HSCG How-To Library has several articles that can give you good guidance on label requirements in the US.
Review your website
You only have one chance to make a first impression. If your website is your first impression to new customers, it's imperative that you make sure it creates the best possible impression. The start of the new year is a good time to step back and take a new look at how others see you on through your website.
Go to your website as if you were a customer searching for your products. Is the website understandable? Are there any typographical errors? Is the information complete and correct? Are your products displayed and described accurately? Is your shipping correct? Make a note of everything that you would like to add, remove, improve or correct so you can address it as soon as possible.
In addition to the outward appearance that the customer sees, what Google sees and what's under the hood can also make a big difference. Technology today seems to change at the speed of light. For example, over the past several years website security standards, Google search algorithms, and the number of people using mobile browsers have all changed dramatically. If you have your own website, all those factors (and many more) can affect how easily customers can find your website in a search at Google, and how well your website will function for them once they get to your website. Jere Matlock’s article "Website Inspection" gives you a method to grade your website so you can see where you stand and get an idea of where you might make improvements.
Check your overall web presence
Your presence on the web is more than just your website. There’s also Facebook, Twitter, Yelp, Google+, Pinterest, your HSCG Soap & Cosmetic Directory listing, images in the HSCG Soap Gallery and HSCG Cosmetic Gallery—anywhere that you have public interactions on the web.
Again, go to each of those sites as if you were a complete stranger. If necessary, use an incognito browser window so Facebook, Twitter or whatever site don't recognize you (and so display as if you were a stranger). What do you see? Is the presentation fitting with your brand style guide? Is the tone and content in keeping with the way you want people to see you and your business? Are your pictures a good representation of your products?
Unfortunately, there isn't much you can do about things already posted to social media sites, but you can adjust your content and presentation for future interactions if you think it necessary.
Prepare an annual budget
With everything you've done so far, you should have most of the information you need to prepare a general budget for the coming year. It's an unfortunate truth that sometimes funds are limited and it isn't possible to do everything that you want to. If that's the case, set priorities and work out what you can (or should be able to) afford based on your projected income.
Make a plan
Finally, make general plan for the New Year! After reviewing all the steps above, set out goals for what you want to accomplish, and in what order. Create do-able targets to move you on your way toward reaching those goals, and then start making those goals a reality!
(Originally published in Soap Guild Journal of Jan 2009.)