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.
Fiona Anson is Co-Founder of HireMeUp and Partner of Propel Business Coaching which provides business planning among many other services for SMEs.
Connect with Fiona:
Email: fiona@propelbusinesscoaching.com
Website: propelbusinesscoaching.com
Blog: propelit.wordpress.com
Twitter: @propelcoachnet
LinkedIn: View the Propel Business Coaching Public Profile
