How to hatch a plan for your business
It is never too late to create a business plan for your small business. Some simple business planning can go a long way to grow your business and agree on priorities for the year ahead. Equally, it is invaluable if you are going to launch a new business to bring clarity and focus.
A business plan will give direction, structure and save time in the long run. As Benjamin Franklin said "For every minute spent organising, an hour is earned".
Here are my 7 top tips for making this an effective and rewarding process.
1. Start with a SWOT analysis
A SWOT analysis is a compilation of your company's strengths, weaknesses, opportunities and threats. The strengths and weaknesses refer to internal factors, which are the resources and experience readily available to you, whilst the opportunities and threats are external factors so typically things you and your business can’t control.
The SWOT Analysis was created 60 years ago by Albert Humphrey to identify why corporate planning consistently failed. Since its creation, SWOT has become one of the most useful tools for business owners to start and grow their companies.
Once you've completed your SWOT, take a break and come back to it and review again – you often have a few more thoughts. Even better, ask your colleagues, partners or customers on what they think your business is good at and an area where you can improve. If you are a well-established business, you could send out a formal health check survey to your customers to ask for their feedback.
2. Define your business objectives
The start of the planning process should always start with defining your business objectives. Ensure these are quantifiable. Most people have heard of SMART objectives. They really do help and I always use this method. For example, by simply stating ‘growing the business’ is a vague objective. However, if you rework this to ‘by increasing revenue in the health market by 50% this year and acquiring 5 new customers’, it becomes more meaningful and accountable.
3. Set your financial forecast for the year
Linked to your business objectives, set some financial targets for the year. A simple spreadsheet breaking down your monthly income projections taking into account seasonality, peak/quiet periods is an invaluable exercise.
It will help you manage cash flow and ensure you are investing resources where you really need to and acquiring new and profitable customers. Once you’ve done this, split out by customer and product or service.
4. Define your brand positioning
This is a really important one and often gets overlooked. What is your overarching brand or business proposition – what do you want to be known for? Try and sum this up in seven words leading with the customer benefit.
For some guidance on developing your brand positioning, read my brand positioning blog.
5. Set out your marketing plan
Although this should be a deep dive into your customer and market based on real insights, a 2-3 page succinct, well thought out plan can still be as useful.
There are 2 key areas to tackle: your target market and the promotional plan.
First review and list out your core competitors. What are their strengths and weaknesses and what are your main observations or takeaways? If you need some guidance, read my blog ‘Do you know your competitors’ for some help.
Then look at your target market. Paint a detailed picture of your typical customer by putting together a persona. Try and stay clear from demographics and instead think about their motivations and barriers. What are the characteristics and the size of the market? For some tips, check out my ‘Audience persona’ blog.
Once you’ve done this, you’ll need to tackle the 4 Ps, your product, price, place and promotion.
Product: You need to decide what is your product or service strategy. Here is a diagram to help.
There are 4 main types of product strategy - market penetration, product development, market development or diversification.
Price: look at your pricing policy. Take each product in turn and ensure you know all your costs involved - both direct and indirect costs.
Place: look at how you will get your product to market. Where and how will your sales be generated? What proportion will be sold online or will you sell exclusively online?
Promotion: which channels will you use to promote your business. Look at the channels your competitors use and do some quick research to see where your customers hang out. This could be a mix of digital marketing, direct mail and traditional advertising. You need to reach them at the right time and in the right place to ensure you are not wasting valuable resources.
6. Work out your operational plan
Don't forget to jot down the resources and infrastructure needed to run your business. Consider the manpower you need to make it happen. Will you need to employ anyone or will you outsource. Also look at the premises/office and storage space needed, ongoing IT support and management information required. They all need to be accounted for and thought through.
7. Set metrics
Taking into account your business objectives, sales forecast and marketing plan, set some detailed metrics for the year. These can be split into sales, marketing and operations.
Sales metrics may include acquisition costs, renewal rates and the lifetime value of a customer.
Marketing metrics could comprise of the costs per lead, targets for your website and social media, as well as customer satisfaction.
Operational metric examples include staff retention and internal response times. Have a look at my blog for my sales and marketing glossary which lists key areas and useful terms you should be looking at.
Download free templates
There are a lot of free business plan guides you can download. I like this one from the Princes Trust and Start Up Donut.
Remember that business planning needs to be a continuous process, not a one-off exercise. It is also worth sharing the plan with your staff. This will not only help to motivate them, but will ensure you are all aligned. You will all know where you are heading and what you want the business to achieve.
And for more business planning and marketing tips!
For more tips on all things marketing, head to my blog the Sharp end and subscribe to my blog. Or if you would like to take advantage of my 30-minute free consultation to discuss your marketing needs, then please contact me and I will see if I can help.
Feel free to browse through my case studies to see how I've worked with start up businesses and more well established businesses. Have a look at how I helped launch an online service brand for the construction industry and how I assisted with business planning with a publishing business.
Good luck!
Photo credit
Background photo created by freepik - www.freepik.com