NORTHERN BUSINESS REVIEW
The answer is when it is a business or financial plan.
Sometimes it’s hard to run a small business. Where are all the good people to be found? Why are they so expensive when you do find them? Who to trust? Why aren’t you making any money again this month? How on earth have you just lost that key customer?
A business plan, complete with sales projections and growth plans, is probably something you wrote in order to raise some bank money and you’ve not necessarily looked at it since.
A financial plan is something you might have created to pitch to investors somewhere along the way. Maybe you’ve looked at and acted on it in small ways since.
Chances are that neither these plans, nor any others that you’ve created, are live working documents, because they are written looking forwards and they were mostly created to fulfil a particular need at a particular moment in time. Their value usually does not extend very far beyond meeting that need.
As a small business owner you need to think differently about your plans by creating and committing to a different sort of plan, a strategic, lived and acted-upon plan which will form the heart of your thinking. This plan must help you to:
- Define your most valuable customers
- Map sales by your products and services
- Align forecasts to both existing and new customers
- Establish real sales targets
- Work out exactly what activities, skills and systems you need.
Most small business owners fall into one of a few traps when it comes to business planning.
- They don’t plan at all
- They don’t know how to plan, so their plan does not cover the questions and actions that will improve their chances to succeed.
- They plan but do not go back weekly, monthly, quarterly to check that what they are doing is in line with achieving their plans.
One of the easiest ways to make sure that you do not fall into these traps is to get a trusted advisor into your business management habits. This could be a friend or family member, but they are usually not completely honest because they believe it will spare your feelings.
The better way is to join a network of like-minded individuals, such as the Fourways Community Chamber (see them on Facebook) or mentoring groups, or to engage a business consultant or coach. These advisors and networking groups should be selected on their ability to bring the right questions to the discussion, and their willingness to be honest with you to make sure you stay on track.