2019 has been a banner year for most businesses. Sales are
up 8 to 22% but upon review many profit margins are not keeping track with last
year’s forecasts. It is critical that you review your 2019 profit and loss statement
then plan for 2020. There are many aspects to your profitability. Increased
sales are critical but you must control your costs and stay within your P &
L Plan to create a greater margin towards profits.
Analyze your business performance through your 3rd quarter
as to Sales TY VS LY and 2019 plan; cash flow analysis, cost control and
finally your P & L statement.
Forecast your 4th quarter with the actual you have up to date, then show your End
of Year projection.
Many of the questions that you must ask yourself are as
How you are going to measure your Success: Sales,
cost control, margin…profit? Many businesses have increased sales but no
increase in their margin or profit.
What generated our greatest sales increase: new
product/service, online vs. store line or in person sales?
What products/service did not sell well? Should
we reduce slow moving products/service in the new year?
What was the cost of the increased
sales…discounts, Groupon sales, coupons, …
What can we do to reduce costs and increase
Are you in control of your Accounts Receivables?
Has your sales team met their goals and if not
have you removed your sleepers?
What did our competition do vs. our business:
sales, increased advertising, online vs. standard retail sales.
Internet sales were up 22% in many companies
this year. Where do we stand as to our plan to capture that market share in
You should have prepared a Business Plan in September
2019 for your 2020 year based upon an Incremental Budget. Now you must prepare
a revised plan with a Zero Based Budget.
Plan for 2020 once you have analyzed 2019 statistics and
answered the questions above. It is critical to have a plan for each aspect of your
business plan in order to reach your goals and generate a greater profit. Many
of my clients are very skilled in generating sales but dreadful in cost control
Your Sales Plan and Budget are a living manuscript
that requires to be monitored and if need be restructured throughout the existence
and cycles of your business.
Business forecasting is most effectual when it’s monitored daily
and constantly. The process of analyzing the progress of your Sales Plan and Business
Plan with the ability to adjust as need be will assist for your continuing
success and provide your business’ profits in the upcoming years.