The quiet days at the end of December are a natural time for small-business owners to take stock and set goals for the new year.
By crafting effective resolutions now, owners will have a road map to better guide their companies through the twists and turns that will inevitably crop up next year.
With that in mind, we asked three local small-business leaders -- and owners -- for their top resolutions for 2007: Gene Hale, chairman of the Greater Los Angeles African American Chamber of Commerce; Bonnie Nijst, president of the Los Angeles chapter of the National Assn. of Women Business Owners; and Rick Sarmiento, chairman and chief executive of the Latin Business Assn.
Gene Hale: Be sure to watch the economy
Hale, recently appointed to the governor's Small Business Board, is focused on the bottom line when it comes to New Year's resolutions. At the chamber, and as president of G&C; Equipment Corp. in Gardena, he keeps a close watch on finances.
That will be particularly important for his company next year, he said, when he expects the construction market in which he operates to slow and inflation to put pressure on prices.
His five recommendations for 2007:
* Manage your budget process throughout the year. Preparing a budget is a great first step, Hale said. But to be effective, a budget has to be revisited regularly, a step small-business owners tend to overlook.
"Have at least weekly or monthly budget meetings with different departments to make sure they are on course with the guidelines that have been set," he said.
Hale meets weekly with his employees to determine where to reallocate resources and where to cut back to ensure the company is meeting its targets.
* Identify market trends. Your company's ability to meet its goals will be affected by changes in the economy and the competitive landscape in which it operates, Hale said. He recommends that companies create a market forecast at the beginning of the year that includes a variety of scenarios and that they track economic trends throughout the year.
That information, for example, could help a company make crucial decisions about how much inventory it must carry or how big its workforce will need to be to meet demand for its products or services.
* Keep an eye on cash flow. Without cash, a company's options are limited. Don't be passive about steps you can take to keep more cash in the company's coffers, Hale said.
One such step is to negotiate more-favorable terms with your vendors. If a vendor wants 40% down on an order, try to negotiate a deposit of 10%, Hale said.
"If the market cools down, you need that cash to sustain you until the market turns up again," he said.
* Collect your accounts receivable. When times are flush, it is easy to be lax about collecting what your company is owed. If the economy slows, this habit can put you in a hole quickly, as your customers may be slower to pay as they try to conserve their own cash.
Hale holds weekly meetings at G&C; Equipment to make sure accounts receivable remain a priority.
"You know the old saying, 'You can do all the business in the world, but if you don't collect the money, you might as well not be in business,' " Hale said.
* Develop new clients. Hale recommends that companies resolve to develop two or three major new clients each year.
"There's a lot to keep your eye on when you are an entrepreneur," he said, "because it really doesn't take much to go sideways."
Bonnie Nijst: Small steps can push you forward
Nijst is president and chief executive of Zeesman Communications Inc., a marketing, design and advertising firm in Beverly Hills. She recently completed a UCLA course on management development for entrepreneurs that has helped her shape her New Year's resolutions for small-business owners:
* Take the small steps that can make a big difference for your business.
"It's less of a thing to do than a frame of mind and a way of approaching things," Nijst said.
She has learned, for example, to take incremental action on everything that comes across her desk, rather than just stick most of it into piles.
The goal is "to keep it moving forward," Nijst said.
* Refocus your marketing efforts. Business owners spend a lot of time and money to create brands, she said. A more effective approach is to find out what customers love about your business and sell that.
Rather than a product or brand, it may be the experience they have when doing business with your company or the people they deal with, she said.
"That's what you deliver on every day, without thinking about it," Nijst said.
A small-business owner who has a clear understanding of what his or her company is great at doing is ahead of the game when it comes to winning new customers, she said.
Rick Sarmiento: Set strategy and track results
Sarmiento, CEO of Ultimate Partnership, a Valencia-based consulting company, is a firm believer in strategic New Year's resolutions.
He sets goals for himself, his company and the Latin Business Assn. and tracks the results throughout the year.
"New Year's resolutions are an opportunity for companies to revisit what they accomplished this year and to determine what the opportunities are for the upcoming year," Sarmiento said.
Under his leadership this year, the business association met its goal of boosting revenue and membership levels and improving its website. The revamped site averages 250,000 hits a month versus 1,000 before the redesign, Sarmiento said.
To achieve similar results at a small business, his top recommendation is to resolve to revisit your strategic goals. Spend time each week, preferably away from the office, to outline and update where you want to be at the end of 2007.
You might hire a consultant for a day or two for an outside perspective on your goals and the steps necessary to achieve them. Or tap the resources of business groups such as the Latin Business Assn.
"You want to be a $500-million company? Well, that's great -- so does everybody else," Sarmiento said. "How are you going to get there? Do you have the strategy to get there? Is it realistic? What are the key things you need to get there?"
Most owners leave out strategic planning, dooming themselves to the ranks of small businesses that fail within their first few years, he said.
"In the small-business world," Sarmiento said, "I am a true believer that goal setting is a top priority."
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These local organizations offer free or inexpensive advice to help entrepreneurs set and meet their New Year's resolutions:
Greater Los Angeles African American Chamber of Commerce
5100 W. Goldleaf Circle, Suite 203
Los Angeles, CA 90056
(323) 292-1297; www.glaaacc.org
Latin Business Assn.
120 S. San Pedro St., Suite 530
Los Angeles, CA 90012
(213) 628-8510; www.lbausa.com
National Assn. of Women Business Owners
Los Angeles Chapter
900 Wilshire Blvd., Suite 404
Los Angeles, CA 90017
(213) 622-3200; www.nawbola.org
Source: Times research