Your business plan plays a vital part in getting business success. Furthermore it not only helps you navigate an uncertain business landscape it can help reduce the risk of it all going wrong.
First of all planning is a mindset approach to your business. It captures in words and numbers the results of clear thinking and likely outcomes of your business journey.
Above all planning shows that you have considered the risks in your business journey. It shows how you are going to deal with these risks and achieve your aspirations.
5 points to get it right:
Business vision & values
Most noteworthy map out your business vision, values and mission statement. The framework of your business is shaped by your business vision and values.
Certainly your vision statement is a high-level statement from which strategic objectives and targets are then derived. Likewise it typically defines your businesses aspirations in areas like customer service, engagement with staff, external stakeholders and social responsibility. Values are those things that we believe to be important. Which we expect to be met and respected.
Hence your mission statement is your calling card to the outside world. It states the main direction and purpose of your business. Likewise it is the foundation for the process of your Business plan. It determines the standards at which your business aspires, to be now and in the future. Certainly a mission statement is not a bland promotional tool; make it simple, concise and memorable.
Similarly figure out your critical success factors and objectives
Every business has Critical Success Factors (CSFs). Consequently CSFs are the cause of your success. They highlight those areas you need to perform best in if you are to achieve overall success. They also help achieve your SMART objectives.
CSFs for a retailer would typically be having the right product mix, availability, pricing and effective marketing. As a result attracting more customers.
Objectives are normally described as SMART:
Example Objectives could be:
Growing turnover by 10% next year
Break-even sales £5,000 per month
Most importantly, do your research before finalising your marketing plan,
What are current and future needs of your client? Look at trends, customer pain points, potential products and services.
Likewise identify who your competitors are. Similarly assess their strengths and weaknesses. Identify any potential duplication of services, and “collaborations”.
First of all this will include your marketing objectives, product and service offerings. Similarly pricing strategies, promotion, time scale and what resources are needed to make it work.
Hence every plan needs to be translated into what that means in financial terms. Because those financial outcomes are typically expressed through three key statements. Above all these measure financial performance, strength, and liquidity.
The three statements are profit and loss statement; balance sheet and cash flow. When preparing these you need to stress test them. Furthermore subject them to what-if scenarios also sensitivity analysis.
Implement your business plan:
Putting the plan into practice. Checking and react to it’s progress.
Your business plan
Above all this shows how you will meet your business plan objectives. Furthermore, time scales involved, who does what and any identified risks. As a result you will be able to manage those risks.
To sum up, you cannot manage what you cannot measure. Therefore you need clues/milestones to identify if you are progressing on your journey. Measure what is important, for example Key Performance Indicators (KPIs).
Finally measure and manage your performance to get it right. Hence judge how the plan is going. As a result KPIs should normally be a blend of numbers (quantitative) and non-numbers (qualitative). Consequently targets can be set and progress measured against these. Therefore any variations against these, prompts investigation. As a result you can take action to rectify the situation.
Contact us if you want to know more about understanding your business plan. For more business and finance , news, advice and tips, don’t forget to watch our weekly broadcasts, listen to our weekly podcast I Hate Numbers.