In our last article, we talked about how New Year's Eve has always been a time for looking back to the past, and more importantly, forward to the coming year. How it's a time to reflect on the changes we want (or need) to make and resolve to follow through on those changes. We also conceded that while reflection is an extremely powerful step in the planning process, a resolution is simply a determination ("to resolve" or "to determine") to do something.

Once you are clear about your resolutions, you need to convert them to an action plan. In this article, we will walk you through what it takes to see those resolutions become a reality using an example.

Let's say one of your resolutions for your business is to increase profitability in 2010.

First, we suggest you brainstorm a couple of general ways that you could increase profitability. The good news here is that you must already be profitable, so we can limit the brainstorming (at least initially) to the financial aspect of your business.

You may have come up with the following:

1.Cut costs.

2. Increase revenue.

Now that you have some general ideas on how to move this forward, it is time for some research and analysis.

Gap Analysis

This may be:

1.Internal (i.e., analysis of spending over the last 12 months both on an annual basis and on a month-by-month basis, inventory turnover ratio, sales, etc.).

2. External (i.e., new technology that could increase efficiency within the business, industry benchmarks, global, regional, industry and short-term trends).

The purpose of this research is two-fold: Your resolution right now is still just a conviction. We need to turn it into a goal (that is, give it some more specifics). Second we need to determine the gap between where your business is now in a given area and where you want it to be (the goal). In some cases, you may be able to set the goal prior to carrying out the research (aka "gap analysis") whereas in other cases, as in the example that we are using, you do not.

By carrying out research prior to actually setting the goal, you can get a sense of how high you can reasonably set the goal before it becomes unrealistic given the current condition of your business.

In addition, as a result of this analysis, you may find that you need more than one goal to really see your resolution become a reality.

Set Goals

For the resolution that we are working with, let's assume that you determined that you want to set the following goals:

1. Increase monthly inventory turnover by 15 percent, beginning March 2010.

2. Reduce travel costs by 20 percent for calendar year 2010.

3. Launch new product by July 2010.

Now you can see that your goals are moving beyond the financial aspect of your business into the marketing and delivery areas. This is the case because your resolution relates to the "bottom line" of your entire business.

We find some business owners forget that they can keep the planning simpler by limiting business resolutions to specific areas of the business and then as they become more comfortable with the overall system, move up to firm or company-wide goals and resolutions.

When goals affect more than one section of a business, particularly if the business has management staff, it is important to be aware of goal conflict. If, for example, our business owner in the example we have been using needs to travel to visit with vendors or obtain training for the new product he or she intends to launch, we need to be sure that the travel cost budget amount is sufficient to cover this new initiative as well as any other mandatory expenses.

Assign Responsibility

Now that you are clear about your goals, it is time to ask the following questions:

1. Who? (who within or outside of the firm is required to take action).

2. What? (what does this person need to do/achieve and by when?). This may require monthly task lists for more than one person and may require coordination among various departments.

Finally, this will require regular communication and measurement so that adjustments can be made as needed. We recommend that some formal reporting method be created, even if you are reporting to yourself).

Seek Help

As a result of reading this article, we hope that you can see that there is much more to seeing a resolution come true. This is the case in your personal life as it is the case in business. It requires a real commitment and dedication to do what is required.

If you find yourself overwhelmed at any time, we encourage you to think about hiring a business coach or an adviser to keep you on track. In addition, there are many online resources that just might work for you. Don't give up - get resourceful.

Patterson Partners Ltd. is an international wealth management firm specialising in the provision of cross-border tax, estate, investment and strategic planning services to dual citizens of the USA and Bermuda, their families and businesses. For more information, visit www.patterson-partners.com or contact Jennifer A. Patterson, CFP®(US), CIMC™, CIMA®, TEP via email at infopatterson-partners.com or phone 296-3528. Asgill Post Ltd. provides assistance with Business Valuation, Financial Strategy and the Purchase and Sale of Companies. For comments or queries, contact Kumi Bradshaw MBA, CBA, BVAL via email at kumiasgillpost.com or phone at 295-3301.