As I write this, lots of folks who organized their businesses as S corps, C corps and even LLCs have an inbox full of reminders from their accountant about third quarter estimated taxes. By the time this piece publishes, those same folks will be already thinking about the year end and how to maximize deductions before then.
That’s all well and good. Solid businesses run like a clock: When it strikes six, owners do this; when it strikes nine or 12, they do that. Owners get into a certain tick-tock rhythm. The problem comes when the tick and the tock become the clock.
Let me explain.
Do you ever look beyond the next quarter or next season when it comes to your business? Do you think about what your business could grow into in five years? Or 10? Do you turn those thoughts into action steps to steer in that direction? If so, congratulations. You’re ahead of a lot of business owners.
If not, you might be caught in the tick and the tock of your business. You look at the long hand and the short hand, and you might see the time, but may not know whether it’s day or night.
Zoom out for a minute and think about the future of your business. What does it look like? Do you have growth goals? What do they look like? Are they realistic? Are they ambitious enough?
Some folks enter contracting with purpose. It was an investment with clear plans and goals. They may even have a business plan that maps out those goals. But a lot of drilling contractors inherit their business from a dad or uncle. They take over when the previous generation tires out and just keep going as before. But the industry this generation works in isn’t the one their dad or uncle worked in. It’s a mature industry. You may have to drive a lot farther or offer different services to make the same revenue, and you definitely have to hustle harder to grow.
That’s where planning comes in. As a business owner, I recommend spending about a day a month — or at least a day every quarter — thinking ahead. I’m not talking aimless daydreaming here. Think hard about the future of your business and identify the steps you need to take to get there. Let me suggest a two-pronged approach to that thinking.
First, consider things close to home. What does your business look like in five years? Think in terms of revenue goals, and how to get there. Do you want 10 percent growth in gross revenues each year? Based on current invoicing, what does that look like on a month to month and quarter to quarter basis? Do you have to add equipment, staff or services during that time to meet those goals? Plan for those things.
Second, think beyond your business. What does your sector of the drilling industry look like in five years? Do you expect the type of drilling you do to grow or be flat? Where do you expect growth? Do you have the right equipment and crews to make a play in the areas in which you see growth?
The important thing is to ask the big questions and think the big thoughts when it comes to your business, at least once in a while. But, like I said earlier, if you don’t turn those big thoughts into actionable steps, you’re only daydreaming. You may look at the clock, but you’ll be stuck in the tick and the tock.
What do you think? What does planning for your business look like? Do you have a five-year plan? A 10-year plan? Let me know. Send an email to firstname.lastname@example.org.
Stay safe out there, drillers.