With 2025 fast approaching, it is important that you stay ahead of the curve and plan for the upcoming year to ensure that you are creating and maintaining a successful plan for growth.
Snapshot Summary
A successful business relies on a solid plan with clear financial metrics. As 2025 approaches, it's crucial to stay proactive and plan for the year ahead to ensure growth. By dedicating more time to planning, you can address potential challenges and create a realistic, actionable plan.
Giving more time and scope for planning means that you can put more input into mitigating any potential challenges or roadblocks that may arise throughout the year, and ensuring you have a well thought through plan that is achievable. As part of the planning process, it is helpful to look at insights from the previous and current years in order to assess your progress and make informed future decisions.
Understanding insights from 2024
To begin with, it is important to take a deep dive into how your business is really performing. Start with a detailed review and analysis of your financial statements, such as your profit and loss, cash flow statements, and balance sheet. Were the key financial targets met this year? If some were not achieved, identify what the constraints were. Review any key KPIs related to sales, customer retention, customer satisfaction, operations, and expenses. Drill down into the real revenue and profit growth, and how your margins have been affected by price increases.
A Gross Profit and Pricing Health Check can provide all that information and more. Find out more here to kick-start your 2025 business plan. Did you face any bottlenecks this year? Review how these could be mitigated in the future and have a plan in place.
Market research and customer feedback
It is important to stay on top of market trends and industry developments, businesses can use this to gather valuable information about target audiences and industries. This helps to identify any emerging opportunities and potential threats to your business. Have you obtained any recent feedback from your current clients? Customer feedback is vital in shedding light on areas for improvement. Throughout the year were there any changes in customer trends that increased or decreased sales?
Developing a business plan
- Goals: Have you clearly defined your financial quantifiable goals for 2025? How can these goals then be broken down? The goals you create for the upcoming year should be clearly aligned with your overall vision and growth strategy – for the next 3-5 years
- Deadlines: Your strategic projects that will deliver the plan must be specific and have deadlines. Ensure you are creating them with data in mind, for example, if you need X new customers by the end of the year, how many initial meetings and enquiries do you need per month to achieve this?
- Prioritise: Prioritise your goals and projects, which ones will impact your growth the most?
- Communicate: You need to have the goals at the forefront of your teams’ minds to help drive the business forward. This alignment ensures your team understands the company's direction, and they are more likely to work together to achieve common goals.
Mapping out financial insights
The key is to have a full financial plan. This includes a balance sheet forecast and cash flow view – don't just stop at a profit and loss budget. It is also essential to map out the next 3-5 years on your full financial plan – this gives the business and stakeholders clear direction and also tests whether next year’s plan is in line and helps achieve these 3-5 year financial goals. It is also important to ensure that your financial plan ties in directly with your sales plan. Are there clear breakdowns of how you will get your sales growth, and what is required?
- Budgeting and forecasting: Outlining a detailed profit and loss budget for the coming year is crucial.
- Revenue projections: Forecast revenue based on past performance and future goals and targets. Break it down into customer groups or product areas, to give some strategic focus to your growth.
- Managing costs: Ensure that you have strategies in place for managing and reducing costs where required.
- Give careful consideration to all the items below EBITDA: Owner's drawings, tax, depreciation, donations, etc, as these are all going to impact the financial plan. Cashflow management - ensure that you are staying liquid throughout the year. You’ll need to think about the capital expenditure required, loan repayments, and your working capital requirements for the forthcoming year. For more details on cashflow management click here.
Tracking KPIs
The key to hitting goals is to ensure you are tracking the right KPIs. As one of the most important numbers in the financial plan is your sales number, it is critical to identify what the correct key lead and lag measures are for your sales and marketing teams, which will provide an important direct focus of time and efforts to hit the goals. In our experience, we find that businesses don’t place enough emphasis on the lead measures. For more details on lead and lag measures click here.
Stay accountable and put everything into action
There is no point in having financial goals and plans in place unless you are staying accountable and reviewing your progress throughout the year. At Oldfield, we have quarterly face-to-face or online meetings with our clients to ensure they’re on track throughout the year. If there are any potential challenges, they can be spotted early, and plans can be put in place to alleviate them. We are passionate about helping businesses achieve their financial goals! Is your accountant talking to you about your business and financial plan for next year?
These conversations must be happening now to ensure you are well-prepared for 2025. If you don’t feel that you are getting enough proactive advice from your accountant why not arrange a call with one of our consultants to see how we can assist with your 2025 business planning?
For more information on how we can help you and your business, please contact us via email or phone and we will be happy to advise on the best solutions for your business.
Please note: This article is provided for information only and was correct as at the time of writing (19/09/24). Any lists and details provided above are not exhaustive and are not intended to be full and complete guidance. No action should be taken without consulting detailed legislation or seeking independent professional advice. Therefore, no responsibility for loss occasioned by any person acting or refraining from action as a result of the material contained in this article can be accepted.
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