The 2008 recession changed how many businesses manage their companies. Strategic plans from prior years were changed and in some cases completely scrapped for a greater focus on reducing costs. As a result, many c-level executives are now beginning to question the importance of a five year plan. Despite this sentiment, we believe strategic planning is effective when done properly and continuously.

The objective of a strategic plan

Many companies follow a strategic plan to guide them on how to allocate their resources effectively to achieve their objectives. Without a plan, it’s very difficult for senior management and employees to work together in achieving company goals. Unfortunately, these plans are sometimes designed with little regard to internal and external factors.

Updating your strategic plan

First, you may be asking why you need a five year plan when it’s very difficult to predict future business conditions. The simple answer is that you need to prepare for unexpected events when building a long lasting company. Typically, it takes several years to achieve results from developing new products, services and competing in new markets. The same holds true when making changes to existing products and services or setting new financial goals. (more…)

Most businesses will experience rising costs in 2014. The economy is expected to grow at a 2% rate, which should offset some of the increasing costs. What costs can you expect to rise the most in 2014?

Health-care costs set to rise again

Employers can expect to pay at least 7% more this year than they did in the previous year as a result of rising health care costs. The health care exchanges should or are intended to keep those costs from rising at a higher rate in future years. However, time will tell on that front. Employers and employees should also anticipate that prescription drug costs will increase.

Prepare for higher shipping costs

Companies should anticipate a 5% rise in delivery costs with carriers such as FedEx and UPS. The shipping leaders have experienced a lackluster financial performance so far in 2013 and labor costs are expected to rise worldwide. Regular mail costs should also rise by a similar rate as the USPS continues to struggle to reach profitability. The USPS should keep pricing fairly consistent for packages.

If you’re shipping using trucks, expect a 2 to 5% increase as companies need to meet new regulations and the demand is currently outweighing the supply. Rail freight will also increase, albeit at a lower rate. The cheapest option for shipping in bulk internationally will continue to be via sea. (more…)