Are you making plans again?
As restrictions have lifted over the past few weeks, many of us have rejoiced in being able to make plans again! Whether it’s lunch with friends, a drink in your local or a day out with family, after months of Netflix on the sofa, it feels novel to put appointments in the diary.
With planning back on the agenda, it makes sense that we should look at the topic of business planning. Whilst there’s no guarantee of staying out of lockdowns or restrictions, if you’ve been in limbo mode, now is the time to put pen to paper (or fingers to keyboard) and set out the future for your business.
So how should you approach business planning, how often and what should you include?
Set out – and stay on – the right path
Prior to starting a business, one of the main pieces of advice that’s given is to create a business plan. There’s no doubt that taking the time to consider things like how you will go about finding customers, your pricing structure, who will take what roles and responsibilities and the details of how you will operate stands you in good stead.
But too few business owners take the time to revisit and review their business plan as time goes on, instead acting ‘on the fly’. We recommend spending some time on at least an annual basis to take stock and revise your business plan.
Things don’t always work out the way you plan, especially with global health pandemics thrown into the mix, but by having a plan, you can at least feel prepared for what the future holds and have confidence that your plan is sound, all other things being equal.
Don’t make bad decisions
No amount of planning will eliminate that chance of making bad decisions. Unfortunately, all business owners make them at some point – even the Richard Bransons of this world will admit to that! But by having a business plan in place, you can reduce the chances of ploughing ahead into decisions that may not be the right ones for you or your business. For example, if you have a target type of customer in your business plan, you may stop to think twice about taking on a customer that you may not be able to service so easily or profitably. Or if you have set out the roles that each team member will have, including yourself, it may stop the lines being blurred and some people taking on an uneven share of responsibility.
Put finances first
Most people are in business to make money, but surprisingly few business owners actually know the true state of their finances – especially their profitability – at any given point.
The old saying ‘sales is vanity, profit is sanity’ is true here. Being busy is not the same as being profitable. By reviewing your business plan periodically alongside your accounts, you can take the opportunity to work out the most lucrative clients or areas of the business, taking steps to increase profitability where necessary.
The pandemic has also taught us that cash is king – so by making plans to keep a certain level of cash in the business at any given time and spreading planned expenditure into stages throughout the year, you can increase the likelihood of having cash available should you need it for emergencies.
It’s great that so many of our clients are back to being busy – and with our help and good planning, we can be safe in the knowledge that they will also be profitable.
Get in touch with our Business Consultants to find out more about how we can help businesses put plans in place to be better, stronger and more profitable versions of themselves.