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Plan and keep planning!
Business planning should be a central concern for firms of
any size or age. A well-prepared plan gives the small business
person a road map to success. It also provides focus to emphasize
the critical few choices that generate the strongest return
on investment.
The adage is so well worn that it almost seems trite. The
truth, however, is that some statements never go out of style.
. . failing to plan is planning to fail. Small businesses
are often more adept at seizing opportunities than at planning
for them. Said another way, small businesses too often tend
to fire before they aim.
Business planning should be a central concern for firms of
any size or age. A well-prepared plan gives the small business
person a road map to success. It also provides focus to emphasize
the critical few choices that generate the strongest return
on investment.
Business plans need not be "pie in the sky" or "time
drains" although small business owners often see them
this way. The best plans are grounded in recent experience
and clear thought. They are concise, actionable and measurable.
They have the following elements:
- Business Review: The first step in a business plan
is to review the firm's performance over the past year or so,
identifying the sales and profit status, key accomplishments
and key opportunities for improvement. If the business is brand
new, it is advisable to assess the competition to learn from
their successes and failures.
- Current Year Objectives: Business objectives should be
focused on sales and profit desires. If the business is established,
objectives should take historical performance into account.
If not, objectives should be conservative it is the rare new business
that starts making money the minute its doors open. All objectives
should be written so that it is easy to gauge progress over
time.
- Core Strategies: Once the business review and current
objectives are in place, it is much easier to determine the core
strategies that should guide the business in its current year.
Think of strategies as "what to do" and tactics as "how
to do it." Sample strategies might include the development
of a broader network of productive affiliations with vendors
or suppliers and the reallocation of human resources to optimize
the use of time and talent.
- Marketing and Sales Tactics: In small businesses, sales
and marketing are usually so closely linked that it makes
sense to combine them in a plan. Marketing tactics should be activities
that will help generate awareness, understanding and conviction
for products or services; sales tactics should be activities
that will help generate relationships and agreements with
prospects.
- Financial Tactics: In a small business, steady cash flow
is often just as critical as overall sales and profits. Helpful
financial tactics could be activities as diverse as cutting
overhead by establishing a home office rather than a rented one, instituting
profit sharing to encourage every employee to look out for
the bottom line, or paying a supplier early in exchange for discounted
prices.
- Operational Tactics: Productive operations are often one
of the hallmarks of small businesses that eventually "make
it big." Operational tactics should be activities that
make a company's production process more effective or efficient.
They could be anything from purchasing computer equipment
that lets you e-mail with clients, to streamlining a production
process for minimal labor hours, to investing in an answering
service.
So you see your business plan is your business; the two are
indistinguishable. Do not treat your business plan as a separate
job; your business plan is your business.
So plan and keep planning!
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