In small business, and retail in particular, closing out the year can feel like a sprint to the finish. With the holiday peak representing as much as 50% of the year’s sales volume, this timeframe is high-stakes and demands full attention. As a result, it can be easy to find ourselves sitting in January depleted of energy and not ready to even think about the year ahead, but there are small ways to start strategizing for a successful new year without drowning yourself in work.
One of the simplest starting points is assessing: what is working and what isn’t working? Just those two questions provide a lot of information on how to start crafting a strategy. In planning for a new quarter or new year, I like to answer these two questions by categorizing a business into three segments: grow, maintain, decline. Simply establishing these three segments offers a framework for an effective strategy.
Let’s dive in a little deeper to what each bucket represents, and how to identify what belongs in which bucket.
Grow: This category represents potential. It may be products that sold out last year, products that you would like to offer in additional colors/flavors/sizes, products that deserve more shelf space or products that are ready for a larger audience. Knowing your “grows” allows you to nurture those areas of potential and confidently invest more resources like budget, space or time to allow them to thrive. It also helps shed light on possible niche offerings—things that help build value and loyalty for your customers. So, while it is tempting to bucket everything as a “grow”, try to be discerning because enabling growth requires finite resources.
Maintain: Maintain represents the meat and potatoes of your business. While it sounds mundane next to “grow” and “decline”, this is the segment that sustains your business. Your “maintains” are stable, reliable business drivers. They may still be growing, but their growth will not be exponential, and you have a good sense of what these products or services will deliver for your bottom line. This bucket needs as much attention as your “grow” and is an important place to fine-tune things like inventory, SKU offerings, and seasonal pacing.
Decline: Although it may seem counterintuitive, this category is just as important as the other two. Divesting from parts of the business that are not thriving opens the opportunity to reinvest your resources into more promising elements of the business. This is where you are creating the budget to buy more inventory, offer more shelf space or provide marketing for your “grow” category. “Declines” are a natural part of the business life-cycle and are essential to sustaining relevant customer offerings.
Depending on your business, this exercise can be done at the item or category level. Once you identify your buckets, you can consider what actions are needed to drive those outcomes and the necessary steps to bring your strategy to life.
If you are feeling daunted by the approaching new year, or you find yourself feeling adrift throughout the year, this simple framework is a quick and effective way to start building structure around your business strategy. It offers direction and clarity as you allocate your budget, time, and space. Give it a try—even 10 minutes of dedicated effort can have a huge impact on the way you think about your business.
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