“How do you find the time to manage all of this social media stuff?” That’s one of the most common questions I’m asked whenever I present. And sometimes, I get the sense that people are hoping that it’s so complicated and time-consuming that they’ll have a great excuse NOT to do it. Not to learn [...]
A business plan is a working document
Every business person knows that every business needs a plan. However, too many companies spend a lot of time and money putting together a business plan that then sits on a shelf and is never seen again. What's the point of that?
A business plan should be a working document that you revisit at least once a year - preferably twice - and that outlines all the actions you need to take to move the business towards its goals.
The components of a business plan - the marketing plan, the operations plan and the financial plan (or cash flow) - should be updated monthly. Let's deal with each update in turn.
1. Marketing plan
Review the marketing strategies implemented during the previous month and check the measurement of each to see if they achieved their goals. Did you get more sales from each? How many more? At what value? Does this new level of sales allow you to achieve the year's sales targets? If so, slot these new marketing activities into the business plan to show when they should be repeated. If not, adapt the marketing plan to encompass new marketing activities that will help you achieve your sales targets.
2. Operations plan
Review the resources you have and the way the business operates. Is the business running efficiently? Did you have any issues or challenges with delivery or service? If so, what new resources or systems need to be put in place to ensure that the business is able to deliver its products or services in an efficient way to enable the sales targets to be met?
3. Financial plan
This is the most crucial of all. Your financial plan, or cash flow, should set out monthly, if not weekly, what funds are expected in, what will go out and what will be left. It should be reviewed at the end of each period to discern the differences between the expected result and the actual result. If you've fallen short of expectations, you can think about how to change that.
Were the sales up or down? If down, why were they down? And what can you do to lift them? What costs will be involved in doing this? And what other operational or marketing issues will need to be actioned? Add these to your operations and marketing plans. Then look at expenses. Were expenses up or down? If up, why - and is this a permanent change? If so, do sales need to lift to accommodate them?
Reviewing and revising plans keeps your business on course
As you can see, provoking answers to all of these questions helps you come up with strategies to make your business perform better. It's not easy, I know, but you will see results if you stick to this format because you will be driving your business forward.
Of course, you might need to update your business plan for reasons other than review. Obtaining capital, either through venture capital partners or with bank finance, requires you to redo your business plan. Changes in the market, the introduction of new legislation, the introduction of new technology or processes and movement to new product or service ranges also require a new approach.