1. Revisit every fixed cost in the business and make sure it’s as hard as it can be.
2. Look at every discretionary cost and check what value added it gave the company in the last year.
3. Look at your market to gauge how you sit margin wise. Can this be moved up a notch” You need to be sensitive to what’s going on in your field.
4. Do you need to attack your market in a different way this year” You know the saying: “If you keep doing what you have always done you get what you have always got”” Well, if you didn’t get what you wanted in 2010, this may mean you need to consider either your route to market, your product or service offering, your pricing, your operational procedures, or even your terms of business.
5. Now to look at your sales and what you need to do. Bearing in mind the above expenses and process review, what’s the critical figure required to deliver that important bottom line (be it profit or, even more importantly in this climate, the cash)” Whatever number this comes out at, run some sensitivities with at least a 25 per cent margin either side and revisit the overheads again.
6. Then do a best and worst case scenario and a break-even budget. Agree to reforecast these quarterly (at worst) and monthly (at best).
Then pray to your particular god.