A New Year's Resolution for your Business

A few weeks back many of us made personal resolutions- usually to improve something about our behavior, health or relationships. The intention always is self-improvement. It’s a noble effort but one that usually doesn’t get kept for long. It’s likely that the reason for our poor performance when it comes to resolutions is one of incentive. Would we skip dessert, sleep more, be more thoughtful to our significant others if we were compensated?

If you are like me and you think so- then why don’t more of us make a resolution for our businesses? - Where we know there is a financial reward for our “sticktuitiveness” or diligence.


It is easy to make a resolution, but not so easy to make the right one or one we can keep. We could resolve to make more money- or we could resolve to spend less. We could resolve to improve our customer service or our employee relations. But what is the right goal? Is $100,000 more or 15% better the right metric? What is achievable and realistic?

If you are not sure…try this on for size. Do it all, but set a low goal. I call it “The 5% Resolution”. Across every function and every metric, try and get 5% better. Note that I didn’t necessarily say spend or invest- I said get better.

• If your sales increase 5% and your costs are cut 5% (certainly an achievable goal)- you have a net affect on your bottom line of 10%. (Refer to our revenue and cost tress to see the different drivers of each and which you might best exploit). For example you might try and expand a little geographically or sign on a few more distribution outlets to increase revenue, or you might try and use materials more efficiently; sharing storage space for inventory or storing less inventory in the first place- you might even buy in bulk if inventory costs are cheap)

• If you improve customer service by 5%, you will have fewer complaints, higher customer satisfaction. This leads to improved customer retention (they keep using you) and more referrals. Both lead to marketing savings since you now get more business, just by doing business better! (Refer to our “How to price a product” page and see the drivers of value to customer. You could strive to be 5% faster or even 5% more reliable)

• If you improve employee relations by only 5%, this lowers employee turnover, increases loyalty and improves the service your employees deliver to customer (see customer satisfaction above). A 5% improvement could be a coffee machine or creating an employee of the month program (Even better if it includes a free lunch with the boss so you can get the inside scoop on issues and concerns that may never be raised elsewhere).

If you get just a little better or a little more efficient at what you do in multiple areas (not just one like sales) your return doubles and triples. A few percent better in one area and a few percent better in another add up nicely in profit. Not just for this year but every year to come! (I correlate it to compounding interest)

So try it and watch how 5% can add up fast.