In thinking long term, you have to maintain a business plan that identifies your business goals while defining a road map to the next stages of your business. Business planning is essential to your business growth. You should regularly review your business plan to ensure it continues to meet the changing market environment.
Prepare a business plan for growth
The blueprint for today's small business owner is still a business plan. There are several reasons why you have to ensure your plan is up to date:
Your strategic plan needs to be realistic and achievable.
If you will need outside investment to bolster your operations, most potential investors will require that you show them your business plan to help them decide if and how to fund your business.
A good business plan helps you allocate resources appropriately, whether you are reinvesting your profits or using a bank loan for expansion.
A dynamic plan can help you monitor whether you are on track and achieving your business objectives. It gives a clear indication of where you are now and what needs to be prioritized to maintain the desired growth direction so that you meet certain key targets.
You should state the time frame on your plan, typically the next 12 to 24 months. The document should ordinarily include elements about what your business does, the direction you want it to go, and your strategy for sales to achieve your desired growth. Consider the following when drafting your plan:
Marketing objectives. You should have a clear picture of your anticipated customer base's size at the end of the period. Define a marketing strategy that enables you gain the extra customers.
Operation and management. This component should describe how your business functions on a continuing basis by highlighting your logistics such as where your business is based, the premises and equipment needed, who your suppliers are, management responsibilities, specific tasks assigned to each department within the company, and capital and expense requirements for business operations.
Financial information. The three financial statements that are integral to your business plan — the income statement, cash flow statement, and balance sheet — will provide forecasts for sales, profit and loss, and cash flow, as well as audited accounts.
Further, your business plan should include a summary of your business objectives, including targets and dates. Include an exit plan if yours is an owner-managed business — this may include planning the timing of your departure due to circumstances such as sale of business, family succession, or closure.
Strategic planning
Whereas your business plan will concentrate on establishing short- or mid-term goals and defining the necessary steps to achieve them, a strategic plan will focus on your business' mid- to long-term goals and explaining the basic strategies for achieving them.
For a small business, the focus will typically be on a particular product, service, or program. You will need to set your overall business goals and develop a plan to achieve them. If you need help getting started, companies like Wise Business Plans can help. Strategic planning typically involves three key elements:
Where your business is now. This encompasses reviewing and understanding your internal operations, what drives your profitability, and how you compare with the competition.
Where you want to take the business. Set out your top-level objectives for the next five or ten years: vision, mission, values, techniques, and goals. Determine what you want to be the main focus of your business and your competitive advantage.
What you need to do to get there. Determine how you will deliver on your strategic objectives. Do you need to make changes, and what is the best way to implement those changes?
Aim to balance the vision for your business against the practical realities of your present position as well as resource changes such as increased capital investment. Your strategic plan needs to be realistic and achievable.
Set goals and objectives
Goals establish where you want to take your business and will usually tell you when you get there. Carefully defining your goals will likely ensure you do the right things and achieve what you needed to accomplish in the first place. Objectives specify what must be done, and when. They are the specific steps your business needs to take so that you reach each of your goals.
Long-term goals should have a degree of measurability. They should be directional, reasonable, inspiring, visible, and eventual — meaning to be fulfilled at a future date. Short-term objectives lend more precision to your overall business planning activities. They are specific, measurable, attainable, and rewarding.
With these tips, you should be well on your way to creating a successful plan for your small business.
