How do I plan?How do I plan?

As 2021 is coming to a close it’s important that you have a plan together ready for 2022. 

 

In this video Kim explains how you should go about putting your plan together for next year.

So schedule some time for you and your loved ones over Christmas to sit down and think about what you really want from life with no limitations if you haven’t already.

  

At KMA we do offer a paid for additional service of a half day workshop in which you produce a one page strategic plan. If you want to take this further then drop us an email to wecare@kmaaccountancy.co.uk if this is something you’re interested in and we can have a further chat. 

 

Happy Planning! 

 

How do I plan?

In truth there are many ways you could plan but only one way to get a bespoke plan for you and you alone. Good planning starts with a blank sheet of paper and thinking about what you really want from life with no limitations. I’d recommend sitting and writing it all down.

 Jot down everything you want to do, to have, you want to go, to own, so that could be for example: –

  • You may want to renovate your house
  • You may want to build a dream house
  • You may want to own a new car
  • You may want to send your children to private school
  • You may want to go on an exotic holiday

Think about the time frames. So, what would you like to do in the next 12 months and out to f5 to 10 years. For example, you may want to build the house of your dreams. But you know that you’re not going to be able to do that in the next 12 months as you need to buy the land.  Then you will need to think about what you want and research the different technologies to heat, power and light the new build. What the building will be made from, the internals, the new kitchen, the flooring, the bathrooms etc.  Getting it designed means that you’re unlikely to be able to in a position to do that, for a good few years.

When you’ve listed out everything you want. Break it down into o to 12 months, 12-  2 years, 3 to 5 years and 5 years plus time frames. Remember back to why you really wanted and why you started your business in the first place.

  • Did you want more free time to go and play golf.
  • Or go on more holidays.
  • Or did you want to build up a nest egg for when you retire
  • Buy a holiday home.

What was it that made you want to start your own company. When you’ve decided what you personally want, spend some time discussing this with your family and your loved ones and come to a collective list of what you want as a family. For example, the children may want to go to Disney but that may never have entered your head previously. And then build it into the relevant time scales.

Like we said the holidays you want, the car you’d like to own etc. Once you’ve done your personal ones you then need to cost them out and find out how much money you will need to take out the business to do all of these things. Remember you may not be taking anywhere near enough money from your business currently and that’s okay I’ll come back to that later.

You now need to either add on your normal living costs. If you’ve not costed those in already! For example the day to day living expenses for food, for your car, for the mortgage etc all the bills you have when you own your own house, and this will then give you the definitive number. For the money that you need to take personally to not only live your current life but the life of your dreams.

When you’ve done this, you can then look at the costs in the business. So what does the business cost you currently. What is the current profit margin and turnover and is it enough to live your dream life? Or will you need to increase the turnover.

  • Will this increased profitability mean you need to expand and do you need to move into new premises?
  • Do you need take new staff?
  • Do you need to install new technologies software buy equipment etc..?

Because all of this will need to be costed in if you do. When you have this information, you will then know what you need your business turnover to be. So, let’s say your turnover is currently £250,000 and the money you take out of the business physically at the moment is £50,000, your profit margin is 30%. If you wanted to take another £50,000 out of the business as long as all things remain equal excluding tax the turnover would now need to increase from £250,000 to probably round about £420,000. So, you would need to increase your turnover, by another £170,000. Now you know what the gap is i.e. £170,000 you can break that down into the new clients that you need to bring into the business or additional sales and then you can start to break that down further into different products or services that you need to sell. And then further by quarter, so that you can get a very bespoke plan, by service line or product line by quarter and by year so you know what you need to do to achieve your goals and dreams personally as well.

If it really matters to you, you are more likely to make it happen.

Know what they say about aiming high. And then you will achieve…. you may not achieve the same level, but you’ll certainly smash your target.

So hopefully that’s helpful in terms of how to plan.

 

It is important that you take professional advice before making any decisions based on the information that you learnt here. While every effort has been made to make sure it is accurate it cannot be precisely tailored to your personal circumstances. This article is for general information only and no action should be taken, or refrained from, as a result of this information.  Professional advice should be taken based on specific circumstances in each individual case.  Whilst we endeavour to ensure that the information contained in the article is correct, no liability  will be accepted by KMA Accountancy which is a trading name of Kim Marlor Associates Ltd or damages of any kind arising from the contents of this communication, or for any action, inaction  or decision taken as a result of using any such information.

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