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Start the New Year with a 2017 Profit Plan

12/19/2016

 
​Are you ready for 2017 to be even better than 2016?  If so, take a few minutes to reflect on the three questions below and take action to set your 2017 profit plan.  
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Question 1:  What were the three best business things about 2016?
 
No need to re-invent the wheel. If you knocked it out of the park in 2016, can you wash, rinse and repeat these tasks in 2017?
 
If you are having trouble thinking of three things, here are some hints: 
  • What apps saved you time and money?
  • Did you make some good hires?
  • Did you let go of a bad hire or two? 
  • Was there a marketing campaign that really worked?
  • Were there any events you went to that generated great ideas?
  • Did you add or remove products and/or services?
  • Did you buy new equipment or open a new location?
 
Summarize the three best things that happened in your business for 2016 and think about how you can repeat them to enhance your 2017.  

Question 2:  What were the three worst business things about 2016?
 
While we do not want to dwell too much on our failures, we do want to learn from them.  Think about the three things that are causing you to lose time, money or gain stress, and decide if you can make changes for 2017.  
​
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​Question 3:  What vision do you have for your business in 2017?
 
At the end of 2017, what has to have happened in order for you to have a successful year?   Think in terms of metrics as well as intangibles, such as peace of mind and happiness. 
 
Once you know your destination, the fun is in creating a roadmap to get you there.  

Your 2017 Profit Plan

If your vision includes financial goals, then creating a profit plan is one way to measure your progress throughout 2017.  Start by deciding how much profit you want to make in 2017. 

From there, you can compute your revenue goal and make a plan. Then you can add expenses to complete the budget. 

Here is an example: Let us say you want to make $50,000 in profit for 2017.  You can do that in a number of ways:  
​
  1. Generate $500,000 in revenue and $450,000 in expenses.
  2. Generate $2 million in revenue and $1,950,000 in expenses. 
  3. Generate $150,000 in revenue and $100,000 in expenses. 
  4. And so forth. 
 
From your profit number, you can create a revenue plan. This plan should include how many items you need to sell, like this:

Product/Service
Widget A
Part B
​Service C
No. of Units
3,000
100
​700
Price Per Unit
$200
$2,000
​$1,000
Revenue
$600,000
$200,000
​$700,000
Total Revenue:  $1,500,000

​Once you have your revenue plan, you can fill in your estimated expenses. 
 
You might be thinking that this sure sounds a lot like making a budget. And it is. But it is far more fun to work on something called a profit plan than it is a budget. And if you need us to do the number-crunching part, please feel free to reach out any time. 
This is general information and should not be acted upon without first determining its application to your specific situation. Please contact your CPA or tax advisor for additional details.

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    Author

    Successfully meeting the challenges inherent to new and smaller businesses provides me with a special type of satisfaction. 

    Supporting businesses that have the potential to become amazing – from both the perspective of owners and team members as well as their clients – is what I enjoy. 

    I hope to use this blog to provide information specific to businesses that are growing from small beginnings into exceptional companies.

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  • Home
  • Why Us?
    • Reviews
    • Open Positions
  • Client Services
  • Resources
    • Save on QBO Subscriptions!
    • Tax Refund Status
    • Gusto Year End Checklist
    • Videos >
      • Business Taxes >
        • 2019 Business Tax Highlights
        • 7 Ways Small Business Can Save On Tax
        • Taxes for S-Corp Owners
        • The IRS Loves Businesses
      • Personal Taxes >
        • 2019 Tax Highlights
        • Five Yearly Tax Essentials
        • 4 Common Tax Surprises
        • Retirement Can Be Taxing
        • Advance Child Tax Credit Reconciliation - 2022
        • Make the Most of Your Donations
        • Five Great Tax Secrets
        • Renting Your Property Tax Free
        • Ideas to Audit-Proof Your Tax Return
      • The Tax Cuts & Jobs Act >
        • The Tax Cuts & Jobs Act: What You Need to Do Now
        • The Tax Cuts & Jobs Act: Are Itemized Deductions A Thing of the Past?
        • The Tax Cuts & Jobs Act: The New Child Care Tax Credit
      • Tax Topics >
        • Tax Season is Coming!
        • The New World of Deductions: What Everyone Needs to Know
        • Proving Your Deductions
        • How to Fix a Mistake on Your Tax Return
        • How Long Should I Save It?
        • Tax Credit vs Tax Deduction
        • Understanding Effective Tax Rate
        • Understanding Marginal Tax Rate
      • Life Events >
        • Life Events: A New Birth
        • Life Events: Marriage
        • Life Events: Divorce
    • Articles >
      • Accounting & Bookkeeping >
        • How to Get the Most Out of Your Accounting Fees
        • The 10 Biggest Money Leaks in Your Accounting System
      • Business Factors >
        • IRS Rules for Classifying Workers
        • Checklist for a Healthy Cash Flow
        • 12 Ways to Improve Your Business Profits
        • 10 Step Annual Business Check-Up
      • Tax Topics >
        • Tax Guide for Self-Employeds
        • 15 Things Every Tax Payer Should Know
        • Disaster Casualty Losses
        • Travel & Entertainment Deductions
        • Tax Guide - A Deduction Checklist
        • What You Should Know About Tax Audits
    • Newsletters >
      • Newsletters - Monthly Editions >
        • Newsletter - Monthly Edition
      • Newsletters - Quarterly Editions >
        • Newsletter - 2019 Fall/Winter
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    • How To's >
      • How To - Dext
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