As we look back and reflect on the whirlwind year 2022 has proven to be, it is time now to look forward and factor this reflection into a positive plan for success in 2023.

Here, Andrew James of James, Stanley & Co and The Catering Accounting Company breaks down exactly how to do that, and what steps are necessary to achieve success in the new year.

The three important steps to look at and consider are:

1. Goal setting
2. Reflecting on 2022 and our performance
3. Planning for 2023

Goal setting

This is a term that can often be shrugged off as a bit too ‘dreamy’, or something people may feel isn’t particularly relevant to them – both of these stipulations are completely false. It is a statistically proven fact that business owners who think carefully about their goals, write them down and then take action to achieve them are considerably more successful in business.

You should consider your personal goals first, such as:

• What do you want from life?
• What do you want more of?
• What do you want less of?
• How far are away are you from achieving those goals?
• What actions do you need to take to get there?

Once these have been considered, it is time to construct your business goals and to ensure that they align with and help you achieve your personal goals. These could be factors like:

• What level of income do I want?
• How many events will I need to attend or how many hours will I need to open to achieve the income I want?
• Does this give me sufficient time for family time and holidays?
• What does my business look like when it’s finished?

Reflecting on 2022

We all need accurate financial information for 2022 at our fingertips in order to make this part of our business planning successful. With this information, we can look to answer questions such as:

• Which events were the most successful for me?
• Which days of the week was trading strong?
• What gross margin did I make and is this in line with my competitors?
• Which of my products gave me the best margin?
• How much did I spend on staff costs and compare that to my sales?

It is important when considering these questions to focus explicitly on the profit made at the end of the day – this means factoring in all the costs involved to leave you with a clear picture of exactly how you did.

Planning for 2023

Now we have set our goals and reflected on what went well and what needs improvement from 2022, it is time to build our plan and forecast for 2023.

It is always best to start with a sales forecast to record month by month what you would like to achieve in 2023. This gives you a target right from the start, something to aim for and compete against. Make sure you can physically meet your sales targets and as a starting point, if you are an event caterer, I would immediately book on your five most successful events completed in 2022.
Doing this gives you a great head-start and will give you calendar dates to plan around, so your year is already shaping up well.

Next we want to look at our cost of sales and gross margin, with a view to increasing the margin a couple of percent in 2023. You can do this by putting together a team budget factoring in how many members will make up the team and think about how are you going to reward them?
Last but not least, you must be mindful of your overheads that may include insurance, repairs, travel and motor costs and professional fees.

Finally, you will be left with the net profit you achieve as the business owner. Make sure that the income you are left with meets the requirement you wrote down as part of the goal setting process. It is important also to budget in your tax liabilities too, whether income tax as a sole trader or corporation tax for the limited company.

Yes this may sound like hard work, but the work will be ten times harder if you fail to plan effectively. Use your time wisely and get a plan in place before the start of the year and you will be so glad that you did – 2023 is there for the taking.

To find out more about The Catering Accounting Company click here. For more latest updates from the sector, click here.