Money in the Bank? Spend it Strategically This Year
Written by Kevin Martlage
So, you had a successful year as the owner of your tree care company. In 2023, you increased sales, managed your expenses, hired a few new employees, allocated raises for those employees, bought some new equipment, and are now ready to move into the ‘off season’ and start to plan for 2024. That move to the off season may seem exciting due to the profit margin you drove last year and the ‘extra’ money you now have in the bank at the end of your fiscal year. As a business owner, that situation, while exciting, can also add extra stress as you try to determine what to reinvest back into your business as you work towards your mission and strategy.
I have the honor to facilitate strategic planning with various organizations across the country. Part of that planning is that I always encourage my clients to ‘take a deep breath’ at the end of every year, celebrate the success, but then refocus on the long-term sustainability of their company and employee support. This refocus and planning can be done in numerous ways, but the important thing is that you are strategic in how you approach your annual planning and budget allocations for the next year.
As an entrepreneur and owner of your own company it is sometimes difficult to stay strategic regarding planning and reinvestment back into the company especially if you had a great year. Why mess with a good thing right? Additionally, it is sometimes difficult to stay strategic if you happen to be managing your business from your checkbook or your next invoice, perhaps not reaching all the goals you set for the year. Regardless of how successful you are and the year you just had; it is important to stay strategic in determining what you are going to do with the “money in the bank” as you advance your company. My recommendation is to determine how to spend it strategically.
So, how do you start to strategically decide how to use that extra ‘money in the bank’ to further impact your organization? My suggestion is that you spend some time with your management team and use two of my favorite consultant tools known as, ‘start, stop, continue’ and good old fashion prioritization. By using the ‘start, stop, continue’ method you can begin to look at your organization critically regarding what’s next, what works, and what doesn’t. This review will ultimately help you determine what your strategic areas of focus should be as you reinvest in your company and your team. Once you begin to categorize your business into these areas you can then begin to prioritize next steps based on various factors such as budget, impact, resources, and effort.
The easiest way to begin this analysis is to think of your company in three critical areas: People, Process, and Product. As you review each category, ask yourself the following questions about each:
- Start – What do we need to start doing that we haven’t done in the past?
- Stop – What do we need to stop doing that is negatively impacting the company?
- Continue – What do we need to make sure we continue to ensure sustainability
By reviewing these questions for each of the three critical areas (People, Process, Product) you will start to see trends and common themes that can be addressed. Once those themes have been identified, you can start to prioritize the items by looking at 4 additional areas of strategic review. Those areas include:
- Cost / Budget
- Start – What will it cost for us to implement the item(s)?
- Stop – How much will we save if we stop the item(s)?
- Continue – What is our return on investment if we maintain the item(s)?
- Organizational and Strategic Impact
- What is the overall impact this will have on our organization?
- How does it align with our mission and goals?
- Start – What resources will be needed to make this happen?
- Stop – What resources will we save by eliminating the item(s)?
- Continue – What resources are currently being used to maintain the item(s)?
- Organizational Effort and Energy
- Start – How much effort will be needed by the current team to implement?
- Stop – How much time will it save the team if we no longer offer the item(s)?
- Continue – How much energy is currently being devoted to the item(s) to maintain?
Completing a deep-dive review of the various areas you can then start to prioritize what is next and where you want to adjust to strategically impact your organization. There are numerous ways to prioritize, but a process I like to use is a simple exercise that requires you to compare each item individually against every other item being considered. This will help you identify the priority in how you want to strategically proceed if you are having issues in deciding. Typically, when you go through the start, stop, continue exercise and 2nd level review, it is clear the highest priority. However, if you are having issues in determining what is next, you can use the provided worksheet as a guide.
Having money in the bank is a good thing. Determining what to do with that extra money can be exciting, but also daunting, especially if you are new to the ownership / leadership game. Thinking critically and strategically about your organization is difficult especially when you factor in the emotional ties and effort in building your company from the ground up. To help facilitate this review process, I encourage you to look at identifying a trusted advisor or outside consultant to help you navigate through this process and strategic advancement of your organization. While this typically requires a financial investment to contract with a consultant, the return on investment regarding the impact the outside support will provide typically pays for itself when done properly. This is especially true as you continue to reinvest in your team and their development while aligning their skills with the strategic direction of your organization.
The great Walt Disney once said,
“We don’t make movies to make money, we make money to make more movies.”
This quote is very relevant as you continue to strategically evaluate your tree care company. Sure, we all want to make money, but it is the top-level tree care work that allows you to make that money to then reinvest in your company, your people, your equipment, and ultimately your customers. It is my humble opinion that the strategic stewardship of your profits, assets, resources, and team should be the focus of any owner/entrepreneur as they continue to impact their customers and the industry they love. That strategic focus and reinvestment will allow you to effectively advance your company, while building a sustainable foundation for continued ‘money in the bank’ and organizational impact.
If you are interested in having a conversation, or learning more, about how the Arborisk Thrive program and Consultants can help you strategically review and advance your company, please check out our Thrive website at: https://arboriskinsurance.com/arborisks-thrive/