Updating business plan annually keeps focus on growth

Kathryn Cargo By Kathryn Cargo

Jan. 21, 2018 at 10:30 p.m.
Updated Jan. 22, 2018 at 6 a.m.

Ashley Henderson, owner of Cotton Belles Boutique and Co., talks with Nancy Robison.

Ashley Henderson, owner of Cotton Belles Boutique and Co., talks with Nancy Robison.   Madelynne Scales for The Victoria Advocate

Ashley Bures Henderson's main goals in 2018 for her business, Cotton Belles Boutique and Co., are to be more active on social media and to create a website.

Henderson, 30, is one of many business owners re-evaluating her business plan for the new year and brainstorming goals for 2018.

Not all business owners go over their progress yearly as they should, said Joe Humphreys, University of Houston-Victoria Small Business Development Center executive director. Of the ones who do, most owners conduct their evaluation at the end or start of the year.

For Henderson, January is the most hectic month of the year because she's finishing bookkeeping and end-of-year inventory and has to put in spring orders for Valentine's Day and Easter.

"I just really sat down this year and looked back on this previous year — what can I do different, what can I do to better the store, things like that — to have a more positive outcome," she said.

Henderson would like to be more active on her Facebook and Instagram pages and is considering taking college classes because she's not very tech savvy, she said.

Henderson has also thought about building a website for her boutique for about two years and would eventually like customers to have the option to order online. First, she'll set up a website to encourage people to come to her store. She's not sure on the timeline of when she'd get the website up and running.

"I've learned to sit back ask questions — really do my research," she said. "That's what I'm trying to do before I jump in and do an online website."

As for bookkeeping, Henderson had to learn the hard way in September to check her paperwork as soon as she got her merchandise instead of a few weeks later, she said. One time she waited and then realized some vendors were overcharging her.

"For me, I learned staying on top of the bookkeeping, that aspect, and paying attention to those details could save me money," she said. "I was being overcharged for certain merchandise."

Most businesses have a business plan, but each one is different, Humphreys said. The plan tells owners where they want to go. When businesses look back at their progress at the end of the year, they should look at the key performance indicators — for example, how quickly inventory turned over.

The standard for convenience stores is to turn their inventory over every 30 days. If a store has more than that, the owner has too much inventory on the shelf, which takes away funds, Humphreys said. Business owners should know what the key performance indicators are for their type of business and compare their progress to the industry.

Business owners can crunch numbers to determine how much it costs them per day to be out of sync with the industry, he said.

"If your goal is having an inventory turnover of 30 days and your business is 60 days, you're out of round by 30 days," he said. "There's going to be a percentage there that you're off."

Although comparing one's business to the industry is good, owners don't have to match it, Humphreys said.

"If a business owner (is) complaining about something — 'I am busy. It looks like I'm making a profit, but I don't have any cash in the bank' — it will go back to how the business is actually performing," he said.

Business owners often focus on minimizing taxes and don't focus enough on making a profit, he said. They should let an accountant or tax attorney worry about the taxes, Humphreys said. They should also use historical numbers to plan for the future and figure out where they can improve.

"If you don't have goals, it's so hard to obtain anything," he said.

Contrary to Henderson, the Janaks don't have a process to evaluate their business, Janak Plumbing, yearly but look for more opportunities to improve every day. Brian Janak Sr., 58, who owns the business, would like to pass it onto his son, Brian Janak Jr., 36.

"I've never thought of it comparing one year to the next," the father said. "I've always thought of it as progressing - doing all that we can to get bigger and better."

Unlike most plumbers, the senior Janak has several certifications so he can work on septic systems, propane, back flow testing and public water systems. This year, he'd like his son to get the same certifications he has.

Every year, the father has to go to continuing education classes to continue his licenses, and he usually takes the upper-level class instead of the basic class to have more certifications.

"When you are dealing with gas leaks, there's an incredible amount of liability in what we do," the junior Janak said. "Everything has to be perfect; we have to have the million-dollar insurance policy. We're crawling under houses and over attics."

The Janaks have an accountant who does their bookkeeping. They also keep customers' information on file for warranty purposes and maintenance contracts.

"Our main objective is to try our best," the senior Janak said. "Him and I have been the kind of people that want to help people. I've always taken a lot of personal satisfaction in going to someone's house at midnight and stopping their water leak. People are desperate at those times."


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