“You keep talking about business planning, Julia. How does that help my 20 year old business? I outgrew my business plan YEARS ago!”
Business planning and a business plan are two very different things. The business plan is the formal document that should provide the reader with pertinent information about how your business operates.
Business planning and a business plan are two very different things. A business plan is a formal document that should provide the reader with pertinent information about how a business operates.
Business planning is the process by which you define what your business will accomplish in the future. Business planning should be done each year. We promote completing this process by Thanksgiving each year so that you are ready to roll January 1! This means you would start the process September or October, depending on the size and scope of your business.
It does not matter how old a company is when it comes to planning. We have all heard the saying “Failing to Plan is Planning to Fail”! I love this because what you say to yourself and/or your employees is you are planning for success and not failure to meet your goals. Planning is the most important first step you take for the New Year. It assures you outline goals that are reasonable and measurable. A goal is never attainable if you never look at it again. Monitoring your goals keep you on track and focused on that success. You may have risks associated with reaching your goals for the New Year. Identifying those risks provides you with that “Plan B” and keeps you in control.
Business planning is your most important tool going into a New Year and an exercise you must do, each year, to define where you are going and how you will know you got there!
What do I plan for?
- All six business functions! Operations, Marketing and Communications, Sales, Administration, Human Resources, and Finance and Accounting
- Budgets and Projects
- How you will manage your plan….yes, plan for that too!
How will planning help my bottom line?
- Set measurable goals. Written and monitored goals result in a higher rate of success!
- Keep your focus on goals
- Monitoring will identify trends
- Know when to cut back on expenses
Where do I start?
- Run a report on the previous 12 months revenue and expenses.
- Do a variance report, written.
- Make sure you are honest with yourself and paint a real picture of this year.
- Decide what your profit margin should be. Yours not your industry.
- Make a list of all your services and add/delete as necessary.
- Make a list of any large purchases/programs that will have a financial impact.
- Make sure you are setting prices/fees to include profit and overhead.
- Develop a sales plan for the New Year.
- Record expenses for the New Year.
- Complete a budget.
- Make sure you are realistic and have measurable goals.
- Decide how/when for monitoring procedures.
- Plan for review and adjustments as the year progresses.
How do I know my plan is working?
Increased profit margins! You will see progress each month if you follow your plan. You will also feel more in control of your business and the products and services you offer. The first time is always the hardest. Think of your plan as a roadmap and plan your destination. Each month as you review where you are you will see the destination is getting closer and closer. Enjoy the ride!