December is National Write a Business Plan Month! Every business owner needs a plan — whether you’re in startup mode, seeking financing or preparing for another year at the helm of a growing business.
Of course, there’s no better time to draw attention to business planning than on the cusp of a new year. We’re all guilty of putting off tasks such as planning, but knuckling down in December can really give your business an advantage over your competitors by putting you in a stronger position to get the financing you need or launch a big marketing campaign come January 1.
If you’re like most, planning is a burden and a chore that’s hard to prioritize. Here are seven tips to kick-start the process:
Focus on What You Do Best
One of the easiest ways to get started with the planning process and make it work for you is to think about what you do best. What differentiates your business from the competition? What do you enjoy doing? What would you like to do more of? Are there other markets you could go after? Then think about what are you not doing enough of.
In other words, put together a SWOT analysis. This exercise can help you focus your ideas and inform your plans.
Do a Sales Forecast
Nothing kick-starts a small business owner into planning mode better than doing a sales forecast.
Whether it’s a healthy forecast or not, the process of thinking about your pipeline, prices, costs, revenue per unit/sale, is a natural segue into thinking about what has to happen to help you achieve your goals.
As the year progresses, review your forecast against actuals, and adjust your plans accordingly to help you stay on track.
Talk to Your Customers
Customers are a great source of planning inspiration. It doesn’t matter whether you run a landscaping business or software company, your customers’ needs and challenges can help inform your service or product strategy. Ask to hear about the negatives, too — your plans should also include a focus on performance improvement.
Launching a New Product?
If you plan on bringing a new product or service to market, be sure to validate your new idea before starting on a plan. The purpose of this exercise is to better qualify your idea, confirm market need and test.
- Identify the need your product or service will address.
- Do your market research. Talk to customers and prospects. Do they have a need for your idea? Are there certain features that they like or want more than others? Is the market large enough?
- Just as they do on Shark Tank, help customers or investors get a feel for your product by putting together a prototype or a trial run of your service. This will help gauge whether the feature/functionality really does have appeal.
Tackle Your Plans in Manageable Chunks
Business planning isn’t the chore many think it is. Plans don’t have to be encyclopedic. While you may have grand ideas for your business, the devil is in the details, so it makes sense to approach business planning in bite-size portions. For example, if your goal is to grow sales by 20 percent, think about what it will take to get you there.
You’ll need a marketing plan, but you’ll also need a plan for ramping up operations and a hiring plan to staff your expanding business. What about your IT infrastructure? Will you need to purchase new equipment? Then you’ll need an IT plan and budget.
As your business grows, consider your business structure and insurance needs. Should you incorporate your business and/or adjust your insurance policy to mitigate the increased risk and liability that expansion can bring?
By tackling each of these areas directly, with the big picture in mind, planning gets a lot easier.
Once you’ve looked at all areas of your business, set goals and deadlines around your plans.
For example, if you’re looking to move out of your home office, plan your timeline and the key steps along the way to achieving your goal. What needs to happen by when? Think about the assumptions and variables that come into play — whether it’s the cash flow to pay for rent on a leased space or getting new daycare arrangements for your kids and pets. Consider how these factors will impact your timeline and budget.
As you’re planning, don’t forget your taxes. The small business tax landscape changes each year, so put time aside now for a consultation with your tax advisor. This is also the time to make sure you’re taking or have taken full advantage of tax deductions.
In addition, rewind and use this time to learn lessons from your earlier filings. Did you struggle to keep up with estimated payments? Do you need to find ways to better maximize cash flow so this doesn’t happen again? Would a review of your business structure help your tax position going forward?
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