As a business owner myself, I have been doing my own year-end business planning.
My businesses have performed and progressed well in 2017, but I have by no means accomplished all of my objectives with any of my businesses so, while I work on improving their performance and accelerating their progress each and every day, I use the year end time to review, assess and evaluate the businesses and to reflect upon and document their performance and their progress relative to plan as I pull all of the accounting and tax records together.
I take note of the milestones that were achieved during the past year and those that weren’t. I take note of where we exceeded expectations for the year and where we fell short. I take note of each of our team members, be they employees or contractors, and who contributed beyond what we invested in him or her and who didn’t. And so forth…
My review is comprehensive, thorough and objective as it needs to be. As I told a good friend this afternoon, while I perform the review myself I undertake the review with the same intensity and objectivity that I would expect if I had retained a professional to perform the review for me.
After I pull all of the numbers together for the past year, I will typically start with a review of the clients we had the opportunity to serve during the past year and what we did for each of them.
My focus is on determining where we can best add value for these clients and others similarly situated going forward. How we can do better; how we can add greater value for our clients.
Clearly some of our clients fit right into our wheelhouse and we are well positioned to add value for them. Truly, this makes being in business and serving these clients worthwhile!
I also look at the clients that we served where our perhaps our representation of the client in connection with the particular matter didn’t make much business sense – where we were operating outside of our wheelhouse. Fortunately none of these clients were in any way disappointed with our service, none of these projects were performed improperly, it is just that we were not able to serve these clients in particular with these particular matters while generating a profit. We lost money on these projects.
Looking ahead, we need to work hard to develop more clients like those who we are best positioned to serve. And to broaden our representation of these core clients. We need to stay within our lane.
I suppose that with some of the clients that we were unable to serve profitably, and some of their projects on which we lost money, we will need to make a decision whether to refer such clients and projects out, whether to add personnel who can more efficiently and therefore profitably serve these clients, or whether to deliberately continue to work for these clients despite the fact that we do so at a loss (so are in essence investing moneys in their future growth and success).
In reviewing clients and projects I also try to assess and evaluate our pricing strategy. In general, at a time when comparable attorneys to any of ours at the larger firms are charging at least twice to three times as much per hour as we do, and are also saddling their clients with inexperienced “help” from less experienced attorneys, I am pleased that we can offer our services as efficiently as we do and that we can offer such a strong value proposition for our clients. For anyone who cares about value, there is no competition between our firm and the larger firms for projects that are within our wheelhouse.
After reviewing the revenue side of the business, I zero in on the expense side of the equation, in other words how we invested our moneys.
We invest moneys on our professionals. I am truly delighted by the strength of our team of professionals at the present time but we do need to think about finding and adding more professionals just like them.
We invest in our administrative staff. Our administrative staff is strong but we need to develop to where the administrative services can be performed more efficiently. Our unique model requires unique and special team members on the administrative side with a breadth of talent and an ability to perform their work both professionally and efficiently.
We invest in facilities and systems and general overhead. Long-term we can use more space but for the moment our physical plant, our systems and our general overheads are all serving us well.
And we invest in marketing, getting the word out regarding the work we can do and our value proposition. This is a continuing challenge but we have made our way over some speed bumps and seem headed in right direction. Years ago I wondered whether business people would look for attorneys to provide sophisticated business law advice and representation online. I no longer doubt that, but getting to where the prospective clients can find us presents its own challenges.
After reviewing all of the numbers in detail, together with the revenue side and the cost/ investment side, I am in a position to evaluate our business and the direction we need to be taking in the New Year.
I recommend that other business owners perform the same type of annual review that we perform, either that or perhaps a review that is more detailed and therefore better.
Watch your thoughts; they become words. Watch your words; they become actions. Watch your actions; they become habits. Watch your habits; they become character. Watch your character; it becomes your destiny. ~ Lao Tzu, Philosopher and Writer