While the business world always shifts when a new leader steps in, this political season caused more chatter and anxiety than most. As business leaders adjust to what seemed like an unlikely election outcome, their optimism for the year ahead is something to take note of:
In meeting with clients and colleagues around the world over the past few weeks, I have seen an unfamiliar trend in budget cycles. Many companies are delaying their budget planning to February, giving them time to adjust appropriately to the upcoming economic shifts. The presidential election result is causing a ripple of optimism in the business world, leading to larger budgets and investments for 2017.
Business leaders are planning for capital expenditures — adding numbers to their sales and support teams, putting extra money toward development of new solutions and planning to get products out the door in 2017 that were slated for 2018. While this is an exciting time after years of disappointing revenue growth since the recession, here are a few tips to move forward wisely in these uncharted territories.
1) Proceed with caution.
If you were planning on growing 8%, for example, but now think you could grow 12%, why not settle on a target of 10% to keep from overshooting? The current optimism isn’t unwarranted, but be careful not to set yourself up for failure. If you want to increase your spending by 2%, awesome — but watch to see how the first half of the year goes and allow yourself the opportunity to readjust in June after assessing performance trends.
2) Have an upside contingency plan.
You may be used to having a downside contingency plan, but now is the time to institute the opposite as well. Over the last decade business leaders were prepared to miss their numbers, but now, if the optimism produces its predicted results, you should have a plan in place if you happen to exceed your numbers.
3) Be prepared to grow your sales team.
A common mistake I see too often is sales leaders unprepared to hire new talent. If you are just getting your hands on your budget for new hires, between the recruiting and interviewing, it will be June before you fill your team. You should constantly be recruiting — keeping your eyes and ears open for the right talent at all times. Even if you do not officially have the headcount to hire for several months down the road, you should have relationships built and candidates in your pocket, so when the time comes, you can move efficiently and quickly. This will allow your team to keep its forward motion. Spending weeks or months waiting to add vital sales professionals to your team could cost your company missed sales and opportunities — a big loss, especially in a good year.
Unlike popular belief, the recession (or at least the ripple of it) is still being felt. Our research has proven that these past few years have been hard on businesses of all sizes. In 2015 29% of Fortune 500 companies had negative revenue growth, and 40% grew at a less than 2% rate [see our revenue performance report]. We hope 2017 will bring a turnaround, the uptick many companies desperately need. But in your optimism, move forward wisely.
Want to talk about how to develop a revenue performance plan to make 2017 your best year yet? Contact us at information@mereo.co