It's August, and if you're worrying about how you will hit your company targets by the end of December, you're not alone. You've probably revisited the budget you developed in the beginning of the year and questioned whether it is too high. Or, perhaps you are re-examining your company's strategies in order to exceed the revenue goals.
Whatever feelings or actions describe your situation, it is important to know that there is still time left to try and hit your budget—both on the revenue and cost side. These three, tangible strategies can be employed over the next 90 days, which can help set you up for year-end success.
1. Forecast future cash flow for the next 90 days.
Cash is king, regardless of the product or service your company provides. When I invested in public companies as a research analyst, I always examined the company's cash position. And while I now provide advice to small-to-medium private companies, I think examining the current and future cash position is still a critical exercise to figure out the various levers that you can pull in order to improve the company's position.
For instance, one exercise you can employ is to build a future cash flow model for the next 90 days, wherein you forecast various revenue and cost scenarios. While the company's overall performance falls on your shoulders, share the responsibility with the rest of your management team so that there is alignment in meeting the targets. You can share the future cash-flow scenario with your entire management team and get their feedback on which scenario is feasible, and discuss the pros and cons of pursuing one scenario over another. You may have to carve out dedicated time outside of your normal meetings to ensure that this happens in a thoughtful manner, but it can be helpful in hitting your revenue goals by the year's end.
2. Explore targeted sales as a means to meet your revenue goals.
After you go through the future cash-flow management exercise, it may become somewhat evident as to which scenario puts you in a position to reasonably hit your revenue targets.
Consider determining the expected monthly sales figure to reach the ideal revenue scenario in your budget, and working backwards to determine what effort is needed to hit the figure. In my experience, it is often too late to make dramatic changes to the sales strategy, especially if your business has a long sales cycle. Small tweaks, however, can have a positive effect if the entire management team is all focused on employing the tactics to meet the overarching strategy.
Take this for example: If you are selling a product to multiple audiences, consider focusing on one audience for the next 90 days. Examine the marketing budget you developed as well as your business development efforts over the previous six months, and figure out what has worked from the data. Again, sharing the findings with your entire management team can help. You can ask the team whether they would be willing to commit to all focusing on one audience for the dedicated 90 days. Focusing your team's efforts on one audience that has previously proven to generate more sales for the company than others may help boost your revenue.
3. Make dedicated investments in your business.
Finally, if you go through the future cash-flow management exercise and realize that you are going to exceed the original budget, perhaps you are well positioned to make a few dedicated investments in the next 90 days.
Now, this strategy potentially forces you to use more cash this year, which may result in the company achieving (instead of exceeding) the annual budget. As an example, you may choose to make an additional hire or work on a strategic initiative, both of which are investments to potentially secure more revenue in the next year or longer.
Making dedicated investments often requires full alignment with the management team and the board, particularly if the dollar value exceeds a certain threshold. Speak with them honestly about what these dedicated investments will bring to the company, and have the return on investment calculations and projections to back up your decisions.
Either way, consider asking yourself the following questions:
- Is your management team and board willing to just meet (and forgo exceeding) the annual budget in order to position the company for long-term gain?
- Are there any additional costs that you can forgo, or take on, in order to make these dedicated investments to give you cushion in case they do not work out as anticipated?
- How do I get my leadership team on board with this direction?
It helps if you have already set up a compensation system that aligns the company's goals with your management team's performance. If not, you may want to make it a priority for next year so that you can have aligned incentives to accelerate your growth going forward.
Taking action now to execute well over the next 90 days can help you hit your revenue goals. Irrespective of the industry you serve, forecasting future revenue, exploring targeting sales and making dedicated investments can help you minimize the year-end stress and hopefully set your company up for success this year and also over the long run.
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