When you review the first quarter results, I recommended looking at the following 5 items:

1. Revenue. Did you generate more sales in March than January? If not, why? Is your business seasonal with a lot of sales taking place in January or February? They say the economy is in a slow recovery. Do your revenues show this to be true? If you have the ability to see revenue by customer, which customers generated the most sales in the first quarter? Do you expect this trend to continue? How can you keep them coming back to buy more? Which customers did you spend a lot of time on, but didn’t generate much revenue?

2. Accounts Receivables, if applicable. How many days does it take you to collect payment from your customers? Is this trend increasing or decreasing? Do you have the ability to offer discounts for early payment? For slow paying customers, consider creating a repayment schedule and hold them accountable for paying you on time.

3. Accounts Payable. Do you seem to owe your vendors more in March than what you did in January? Why the change? Are you carrying more accounts payable or did you order more inventory or services in the month of March? It is easy to let the amounts you owe others increase when cash is tight, but be careful of using your vendors as a line-of-credit.

4. Miscellaneous Expenses. Take a look at some of the basic expenses, such as office supplies, meals and entertainment, travel, outside consultants, and telephone/cellphone. It is very likely that you can streamline and reduce the amount spent on some of these items a little more than you already have.

5. Prior year. Compare your first quarter of 2010 to the first quarter of 2009. Look at both your Income Statement (aka Profit and Loss Statement) and the Balance Sheet. How are the two years similar? How are they different? Make a list of 5 items where your business could do better, either by increasing sales or decreasing costs. With this list create 2 action steps you can take over the next 2-4 weeks to implement those ideas.

A review of the first quarter is a great place to assess how you are doing and help you create a course to meet your 2010 goals.

Tactical goals would be items such as, decreasing food-container costs by 5 percent, increasing same store sales by 5 percent or managing debt so that it doesn’t exceed 25 percent of assets. Finally, create the organizational goals from the tactical goals. Organizational goals are usually less complex to implement, such as hiring and training new employees, developing advertising campaigns, or pay all invoices within 25 days.

Once the goals are established you can create a plan for achieving them. It is best to start with Strategic goals and work your way down to Tactical then Operational goals. While you can work backwards it is probably more work to do so.

Once you have the plan for how you are going to achieve your goals, establish a time line for completing them. Determine who is going to be responsible for working the plan to achieve the goals. You’ll probably have multiple goals, so spend some time on which goal is most important or which one takes the longest to complete. Once you optimize your goals you are ready to take action.

One of the things that I do to stay focused on my goals is to keep my action plan next to my computer. I look at my plan at least once a week. My to-do list is created based on what I have predetermined are steps that need to be taken to reach my goals.

You should establish your goals and use that information to create your budget for the next 12 to 24 months. My next post will address how to create a simple budget.

Best wishes for a prosperous 2010!

Kelly