If you are like most business owners and are optimistic about next year, you can make 2016 amazing by defining your Revenue Strategy. Perhaps one of the most overlooked strategies, the Revenue Strategy falls under a business’s Fiscal Policy. A Revenue Strategy defines how a company will maximize its value by balancing short term revenue needs with long term revenue opportunities.
At IA Business Advisors, we have talked to hundreds of business owners with a great vision for their company. What separates a vision from a Revenue Strategy is the intentionality of focusing on both long term opportunities and short term needs. Below are 4 reasons why defining your Revenue Strategy will make 2016 amazing.
1) Defining your Revenue Strategy should align staff efforts and financial resources to meet short term goals while investing in future potential payoffs. Decisions like whether to invest in a website or join a chamber of commerce should be made with careful consideration of your Revenue Strategy.
2) Defining your Revenue Strategy puts you in the driver’s seat so you won’t be reacting to money demands all the time. A great Revenue Strategy will forecast expenses and force you to calculate the expected payoffs.
3) Defining your Revenue Strategy forces accountability of historical efforts. It will make you think about what generated revenue in the past and how long it actually took to realize a profit. This will help you realistically determine how long marketing or business development efforts take to turn a profit.
4) Defining your Revenue Strategy makes your cash flow more predictable. I have heard many business owners say “I am having cash flow issues!” Instead of constantly going from cash shortfall to cash shortfall, a Revenue Strategy, over time, will help to even out the ebbs and flows of business.
Without a Revenue Strategy, your business and its decisions will inevitably become reactive. What’s worse, you could be chasing all long term opportunities and run out of cash. What are some other benefits of defining your Revenue Strategy?