At the end of each year, it's crucial to reflect on your business’s performance, goals, and progress. This reflection not only sets you up for success in the upcoming year but also ensures that your personal and professional goals align with your business strategy. According to Scott Snyder, the president of the Exit Planning Institute (EPI), there are three key evaluations every entrepreneur should perform annually to identify strengths, weaknesses, and opportunities for growth. These evaluations help to make sure your business is on the right track and ready for the future.
Key Insights from Scott Snyder:
Snyder emphasizes that just like regular health checkups for your body, annual evaluations for your business are essential. If you don't assess your business and personal goals, you won’t be able to plan for a successful new year. Proper evaluation allows you to approach both short- and long-term planning with clarity, positioning yourself for personal, financial, and business success.
1. Evaluation of People and Company Culture
This evaluation involves an internal survey to assess the satisfaction of employees, who are key to the company's value. By gathering feedback, you can gauge the overall work environment and morale within the company. The survey should aim to measure employee satisfaction, stress levels, and the overall health of the workplace culture.
Additionally, you should ask employees to rank the features they would like to see in their benefits package. This helps you understand what matters most to your employees and ensures that your company’s benefits are aligned with their needs. After gathering this feedback, it’s important to measure the performance indicators to see how these changes impact productivity and employee satisfaction.
2. Evaluation of Company Value
Evaluating the value of your company is critical in determining where your business has gained value over the year and where there are opportunities for further growth in the upcoming year. This evaluation also helps you assess if the time is right to sell the company, should that be an option.
For example, if your company is valued at $50 million and your personal wealth goal is $25 million, it might make sense financially to consider selling. Snyder recommends working with a certified exit planning advisor (CEPA) to help assess your company’s value and make informed decisions.
3. Evaluation of Personal Goals
Personal goals are often overlooked by entrepreneurs, yet they play a crucial role in shaping business success. If your business is headed for growth and your advisory team is advising increased investment, ask yourself: Are your personal goals in alignment with your business's direction? Do you have the time, money, and resources to commit to your business growth? If the answer is no, it’s important to address these issues before proceeding with any major business plans or changes.
Personal reflections should include evaluating your work-life balance, long-term financial goals, and the personal sacrifices required to achieve business growth. Without aligning personal goals with business strategy, your growth plans may become unsustainable.
The Importance of Planning After Evaluation
Once you’ve completed these three evaluations, you will have the right insights to begin planning for the new year. Snyder recommends developing both short- and long-term strategies based on the evaluations.
Here’s how to structure your planning:
Think Long-Term (3-5 years): Start by thinking about the next 3 to 5 years and have meetings to discuss your company’s vision and future direction. Based on the information gathered from your evaluations, assess if your company is in a growth phase or requires adjustments.
Create a Two-Year Written Plan: Next, develop a written plan for the next two years, outlining your strategic and financial goals. Don’t just set numerical targets—describe the mechanisms and strategies necessary to achieve them. Ensure that each department leader understands the steps required to achieve these goals in collaboration with other executives.
Focus on the Upcoming Year: The final step is to create a detailed plan for the next year, identifying short-term goals, opportunities, risks, and revenue generation strategies. This plan should be the most detailed, with specific actions and resources needed to achieve your goals. It’s important to address the essentials like technology upgrades, strategic partnerships, or operational changes. You should also consider whether you're planning to exit the business and how to maintain or increase the company’s value if you plan to do so.
Conclusion:
According to Snyder, each new year brings limitless potential for growth, innovation, and success. However, to maximize these opportunities, entrepreneurs must ensure they have a strong, data-driven plan in place—rooted in their annual evaluations. These evaluations allow you to refine your business strategy, align your personal and professional goals, and enter the new year with a clear vision and actionable steps toward success.
By taking the time to evaluate your business’s health, values, and culture, as well as aligning your personal goals, you’ll set yourself up for a successful and prosperous year ahead.
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