Plan Now for the New Year
With the end of the year just around the corner, it’s time to plan now for the new year. Special considerations should be made about tying up loose ends and getting everything in order for the end of the (tax) year. It’s also a great time to do some serious strategic planning and competitive analysis, regardless of how large or small your business is.
Here we break down the 7 main factors to consider this December and early January, to nail your 2018 planning. Please note that we are not certified financial planners or tax experts and offer this only as options that may or may not be appropriate for your business.
1. Get your inventory in order before the tax year ends
It’s important to think through your inventory situation before the end of the year to avoid any surprises at tax time. Now is a good time to talk to your tax advisor and determine the best strategy for you. Some companies find that they can reduce their income, and therefore their tax liability, by stocking up a little on inventory for the coming year. Of course, you and your tax advisor or CPA are the only ones who know if this is a good strategy for your company. You certainly need to balance the amount of cash held in inventory with the amount of cash you need to run your business, so a bit of planning now can pay big dividends later.
2. Get stock before winter weather prevents shipping
Winter is starting in earnest around the US and this means travel is becoming a steady headache. We recommend getting your products in the door before blizzards block the shipping path. In previous years snow has prevented UPS from making any deliveries or pickups in our area of Portland, and ideally we can avoid that by getting winter orders in early.
3. Business Plan Review and Market Analysis
Now is the perfect time to review your business plan, or create one for the first time. What is your brand about, and what is its unique value proposition? Is this clear to customers?
Review what has worked and what has not this past year, understand your budget and spending habits, allot resources to product development, marketing, and anything else you anticipate needing. Make sure to understand trends in your specific market and the beauty industry as a whole. How will your brand address these things? What will you need to do in the upcoming year to bring your plans to fruition?
4. Talk to your customers
Check in with your customers and make sure you understand how they feel about your product. What are they looking for in the future? Send out surveys, ask on social media—perhaps you have a closer relationship with one customer and you can get an honest opinion. Let this feedback guide you as you consider adapting your products during your new year business planning.
5. Conduct a competitive review
Make sure you spend a little time reviewing who your competitors are and what they are doing. There is no need to rush out and copy exactly what they are up to, but it is worthwhile understanding who their customers are and how they keep them coming back. Can you improve your branding? Your customer service? Perhaps there is a new product line that no one else has tapped into, just waiting for your creativity. Either way, understanding other businesses you compete with will help you strengthen your business in the new year. The holidays are noisy from competing offers, so eavesdrop on what you like best.
6. Assess your vendors, any upcoming price increases, and margins
It is worth checking in with your main vendors to see if price increases are coming in the new year. As the organic and natural skincare market expands there is increasing demand on ingredient suppliers, and everyone down the line from them must foot the bill. At Essential, we are experiencing price increases from our suppliers around the world, so don’t forget that traditionally the end retail user is most able to foot the bill. This is another reason to stock up on product sooner rather than later.
Consider that you may have to raise prices somewhat in the new year to keep your margins where they need to be. Explaining to your customers that you use high-quality ingredients sourced from reliable suppliers with high demand can be enough to allay any price shocks.
7. Technology, website, and digital tool review
Key to success in fast-changing markets is staying on top of changes in technology. Embrace what is needed to stay relevant to consumers, and invest in making your website, if you have one, easy to use and very clear. If you use any analytics or other digital marketing tools like automated emails, educate yourself on upcoming changes. There are many online tutorials and short courses available for you to maximize the effectiveness of most tools, and there is no reason not to dive in.
Now is your chance to maximize the end of year opportunities and make the most out of 2018. A little planning and forethought goes a long way, and we are happy to help you in whatever way we can. Happy holidays, and a very happy new year to you!