Business plans help business owners project revenue and growth, allow for future expenses associated with an assortment of potential future costs, and help them to stay on track for growth targets. Business plans help new businesses find success and successfully businesses reach the next level. Unfortunately, many small business owners have either never created a business plan or have not updated that plan for years. This can make it hard to see where the business is going and can make it difficult to track growth trends.
The main reason small business owners do not have or update business plans is they simply do not know how to create an effective plan, and as such do not understand or see the value in creating said plan. Fortunately, creating a business plan is not as complex as many think, and can be done without much difficulty for most small business owners. You start by assessing your business, today. Where are you in sales, year-over-year growth, margins, etc.? Next, consider your current target markets. Finally, determine your current goals and objectives for the current year.
Once you have this framework, it is time to start considering where your business will go. What are your projected sales for next year, the year after, and so on? Generally, you want to look out five years or more to see the trends. Next, think about the additional markets which you would like to enter. This could be additional demographics, additional regions, or a deeper focus on a current target market. Then, consider additional products or services which you plan to implement. Think about the costs to add them, the training required, the costs to market them, and the expected revenues which will come from them. Finally, consider any large projects on the horizon. This can be acquiring a facility, hiring additional staff, purchasing equipment, or even increasing the marketing budget. It can be anything which will require additional cash.
Now, you need to put this information together in such a manner that you can track your successes. If you plan to see a five percent growth in sales over the next two years, track it. Review your business plan at least quarterly, and make sure you are staying on track. If you aren’t, determine why and adjust your plan going forward. A small miss in sales today can lead to devastating results in three or five years – but by staying on top of your business plan, you will be able to account for it early and correct.
Business planning is not difficult if you approach it the right way. By following the steps laid out earlier, you will be able to create a fully functioning business plan in a short time which will help you to keep your business on track and help ensure long term success.