There is a lot to be gained from business planning but many businesses will search for a million reasons to avoid it. However large or small your business is, planning for the future is critical to its success.
Apart from the obvious benefits of setting your stall out for the year ahead, creating an annual strategy will motivate, inspire and focus you on what needs to be done and when.
The Department of Trade and Industry estimates that at least 10,000 businesses fail in the UK each year and many are doomed due to poor planning. So what is the first step you need to take to ensure that your business does not become one of these statistics?
Plan Plan Plan!
When considering the content for your business plan, reflect on the following practical tips to ensure your business starts the year positively and achieves record results.
If you have been in business for over a year, the first step is to review your performance for the previous year’s trading.
What did you do well? What mistakes did you make? Were your financial projections comparable to the figures you actually achieved? These questions will help you to identify the problems in the business whilst also allowing you to build on positive results.
The next step, or the first step for new businesses, is to set objectives for the year ahead. First and foremost you should consider business objectives in the plan but try to also contemplate your personal objectives and build these into overall objectives.
For instance, if you want to sell the business in 10 years, how will your business performance this year take you one step closer. If it helps motivation, display a picture of a dream holiday on the wall to keep you motivated throughout the winter months.
Make sure the objectives are SMART (Specific, Measurable, Achievable, Relevant, Time-Framed). A common mistake made in the planning process is setting unrealistic objectives. The whole team will become demotivated and unfocused if goals are out of reach.
Have a plan B. Reviewing the success of the business throughout the year is paramount. Don’t be afraid to change your strategy if it isn’t working. This is often difficult to do but it is better to do it in the middle of the year than regret it at the end.
Even if you’re not a natural number cruncher, make sure your projections add up and ask for help from an accountant or financial planner if necessary. Do your objectives match your financial capabilities? There is little point in setting objectives to advertise in a national newspaper if you don’t have the revenue to support it.
These other ByteStart guides will help you tackle the numbers;
- How to choose the best online accounting software for your business
- Why you need a cash flow forecast and how to produce one for your small business
- Cashflow Forecasting – top tips to produce a better cash flow forecast
Revisit credit terms with suppliers, look into grant finance that might be available in your area and don’t be afraid of overdrafts or loans if you have calculated the financial feasibility of such a strategy.
Be an explorer
Find out what your competitors are doing and why. There may be a new competitor in the marketplace that you know nothing about. Conducting research on competitors can be a rewarding exercise and will encourage confidence by identifying your business strengths as well as inspiring you to create new concepts.
Also consider what your customers think of you. Search for feedback and use this information to your advantage – you may be doing the right thing without even knowing it, or think you are doing it right when the customer is actually dissatisfied.
Look into potential new markets by reviewing the local environment. This may be as simple as offering discounts to business customers in the local business park.
Even if the business is a success, it is important to investigate opportunities as the political or economical environment can affect your current market place at any time and you may need to move quickly into a new target market.
Look into secondary research on the industry from organisations such as Keynote of Mintel. You can use these findings as a basis for your own growth and the full report will provide further ideas for business development.
Be a motivator
If you have staff, think about how you can involve them in the planning process to ensure they are aware of their importance in the team. Ensure their personal development plan is realistic and achievable and most of all, say ‘thank you’ for their hard work last year.
If staff are empowered, they will take on the responsibility of ensuring objectives are met so ask for their opinion on how to move the business forward and they will be more motivated to reach the targets set.
Network, network, network. Joining networking groups can be one of the most effective marketing tools for businesses of any type. In addition, remember that networking is not all about referrals from business people – tell everyone you come into contact with what you do and encourage them to give you referrals by giving them an incentive.
Do a marketing plan. It’s easy to spend money on marketing; to get sold something inappropriate by a pushy salesperson. If you do have an advertising budget look carefully at the reader profile and make sure it fits appropriately with your customer profile.
Invest time in encouraging the media to provide free publicity for your business. Take a topical issue and relate it to your business. Editors will often have an extra space to fill in their publication, and will happily insert your story if it is interesting and relevant to their readers.
Form affiliations with like-minded businesses – reaching your target market though partnerships with other businesses is valuable for all parties concerned and your preferred partner will supply warm leads within your target market. This strategy can be achieved via referrals, web links, joint promotions or preferred partner agreements.
List your business on online directories, and others allow businesses to submit a basic listing at no cost.
Keep in touch with all of your customers. Create a strategy which focuses on communicating with all customers, not just the best ones. By sending a promotional voucher to a one off customer, you are reminding them about the experience and encouraging them to return.
Turning single purchase customers into loyal, regular customers is a simple and effective strategy.
For more marketing tips and ideas, read;
- Being successful online – A Digital marketing guide for small business owners
- How to develop a strong USP and how to use it to attract more customers
- 7 Brilliant branding tips for start-ups
- The 10 business development truths that will give you an edge over your competitors
Be an evaluator
Finally and most importantly, the business planning process should take place throughout the year, not just annually.
You should constantly review all the elements to ensure that firstly, you measure whether objectives are being met and secondly, you are in a position to re-evaluate the strategy if it is ineffective.
So don’t put it off any longer, the exercise will certainly put you in the right spirits for the year ahead and you may even enjoy it! Good Luck!
About the author
This guide has been written for ByteStart by Kate Beever, an experienced Business Consultant and Entrepreneur specialising in business planning advice to new and established, growing businesses. Kate is the founder of GetSet for Business, a not-for-profit organisation that inspires young people to learn about enterprise and self employment.
More tips on business planning
For more help on business planning, read these other popular ByteStart guides;
- Your business plan only needs these 4 things if you don’t need to raise money
- Top 10 business planning tips for start-ups
- Why it’s important you plan your exit strategy before you start your business
- Writing a business plan to raise money from business angels
- How to deliver a successful business pitch
For lots more great advice and help on successfully starting a new business make sure you read these ByteStart guides;
- 10 advantages running your business as a limited company has over being a sole trader
- How peer-to-peer lending offers start-ups and small businesses a new funding option
- How to choose the best online accounting software for your business
- The 3 issues you’ll need to overcome if you want your start-up to reach £1m turnover
- 10 ways small business owners can pay less tax
- The start-up survival guide – 6 practical tips to help you get through the early years