Now's the Time to Prepare for 2023
Real-World Advice for Budgeting, Employees Reviews and More
This MTD exclusive was provided by Dennis McCarron, author of MTD's monthly Business Insights column and a partner at Cardinal Brokers, one of the leading brokers in the tire and automotive industry (www.cardinalbrokers.com).
It’s October and the final quarter of 2022 is in full swing. Everyone is looking to maximize what should have been a very good year for top-line sales and bottom-line profits.
Amidst all the activity of sales and repairs, you also should be doing a lot of planning. Now is the time to get ready to roll out 2023. Let’s discuss some of the more important planning practices.
Sales forecast/budgeting. You can’t just keep adding 5% to sales and 1% to net. That’s not planning. That’s mailing it in. A real sales forecast and budget takes time and thought. You have to answer the question of “What is my business going to look like in three months, six months or a year?”
Take time to forecast realistic numbers and look at things you can control and things you can’t. Things you can control are detailed advertising efforts that coincide with events in your area, including local celebrations, plus national holidays. Does your staff need training on processes or products to be more knowledgeable and helpful to customers? Do technicians have their certifications?
Are there any opportunities that have grown popular over the last year or so that your business could focus on? For example, if food delivery has become very popular in your market, you could get the word out with some services or packages you offer only to those drivers.
Is it time to revisit your stocking program and inventory and rebalance your sales report and what you stock? There are also things you can’t control. Is there any planned road construction in your area or building or parking lot maintenance that may disrupt business for a few days? Are any of your long-term employees going to retire? Are electric vehicles going to impact your location?
There are many things to consider and there is no special way to be able to predict everything. But taking time to think and research what is going to be going on around you lets you build a realistic budget that can then tie into compensation programs and expected profits. If something major, positive or negative comes up that wasn’t predictable, you can always adjust the plan.
Employee reviews. The key to employee reviews is that they are not a surprise. The dates are planned well in advance and the topic should be of no surprise to anyone because as a good boss, you’ve been giving quality feedback all year long.
The term “employee review” is actually misleading, as the time spent reviewing the previous year should dwarf next year’s plans - from sales goals to education and training, plus personal goals as it relates to work, such as wanting more time off or more overtime. Those goals, plus plans for moving up in your organization and how to get there should be the main time consumer in employee reviews
If you haven’t ever performed an employee review or you weren’t providing a lot of feedback during the year, the best course of action is to wipe the slate clean - with no review of past performance - and focus exclusively on milestones and goals moving forward.
Tax strategies. Hopefully, like most tire dealers, you’ve enjoyed some success and improvement this year and were able to put some decent profit numbers on your income statement. Take a moment to call and schedule an appointment with your accountant to figure out if there are any changes to existing laws and rules or if an updated strategy needs to be employed if your business had a decent 2022 performance.
And don’t forget to review your own performance. How did you do as a boss this year? Are your employees happy and productive? What is your work-life balance like?
This time of year, I like to make a list of things I’m going to do in the upcoming year. I also like to look at my current list of things I do and see if there are any items that take up my time and really aren’t helping or improving my work or results. Find at least one specific thing you are going to do differently next year and begin developing an action plan.
Find someone to help you hold yourself accountable, because as the boss, that’s usually the Achilles heel. Find someone who isn’t afraid to tell you when you’re slipping on a goal.
The final quarter of the year is always hectic. With so many holidays, it’s like you lose two whole weeks and still try to do as much work. That’s why it’s so important to begin planning now - when you have just a little bit of time - to prepare for the future. Remember, you’re the only one in charge of what your business looks like financially and physically in the future. Everyone else in the store is employed to focus on today