“If you fail to plan, you are planning to fail!” – Benjamin Franklin.
Starting a business is a lot of work. Your start-up year is key because you need to make sure that you have everything you need to start a business.
And if you already have a business, you need to focus on adding information to your business plan that moves you closer to the goals you’re trying to accomplish.
Business plans are not “nice to have.” They’re a necessity.
With a solid plan, you can avoid being one of the 48.4% of companies that fail in the first five years of operation. But with a vision business plan, you’ll plan your first few years of operation, your goals and how to achieve them.
Your plan will guide you through the ups and downs to increase your odds of success.
Design a Visionary Business Plan That Brings Your Goals to Life
Your idea for a business comes with inherent goals: independence, monetary gains, growth, etc. Before getting into the meat of your plan, think of your dream scenario. Start with the end in mind.
Want to hit $3 million in revenue?
- How will you get there?
- What will your sales team look like?
- Will you introduce new products and services?
- How will you market your products/services?
- What does your infrastructure need to look like?
You can then break down your long-term objectives further, followed by your short-term, six-month-or-less goals.
Goals that are longer than six months are often pushed back because you’ll think, “I have time, so that can wait until next week.”
Even your short-term goals have small milestones to reach, so be sure to add them to your plans.
Goals will drive your business plan, which you can now begin to structure.
Structure Your Business Plan to Reflect Your Goals
Lofty goals require structuring your foundation properly, starting with your plans for pricing.
Pricing Strategy
Price your products or services too low and profit margins suffer. Too high, and you’ll struggle to make sales. “Walmart” approaches might work in the short-term, but if you’re competitors are larger than you, there’s only so long that you can compete before you need to switch gears.
Realign your thought processes to focus on long-term growth driven by your value proposition and pricing strategy.
Start with your budget to better understand your cost of:
- Production
- Goods and services
- Overhead
Your pricing strategy must leave your business in a position to make sales and have enough money left over to grow operations.
We recommend:
- Performing competitor analysis
- Learning what others are charging
- Figuring out how you can differentiate yourself to maximize your pricing
Your pricing will help you drive sales, but you don’t want to cut yourself short in the long term.
Plan Out Marketing That Truly Connects With Customers
Marketing will play a foundational role in the success of your business. You need to attract new customers or clients. But how will you do that?
Consider:
- Which strategies will be most effective to generate sales
- Who your audience is and where you can reach them with your marketing materials
- Who might be a good referral partner for your company
Your marketing strategy should also focus on key performance indicators (KPIs), such as:
- Sales growth
- Revenue per client
- Customer growth
- Client retention
- Conversion rate
- Gross profit
- Return on investment
Also, consider marketing-specific KPIs like click-through rates for PPC ads and open rates for email to make sure your marketing efforts are paying off.
Fuel Your Sales With a Clear, Strong Strategy
What will your sales strategy be? You might have a great plan to get leads, but you’ll need to convert them. Ask yourself:
- How many leads will I need to reach my sales goals?
- How many consistent clients will you need?
- How many proposals do I need to send?
- Are there any upselling opportunities that will increase customer value?
Understanding how many clients or sales you need to reach your goals is crucial. Let’s say that your goal is to hit $100,000 in revenue and you sell widgets at $100 each. To hit your target, you’ll need to close 1,000 sales (unless you upsell or offer bundled products).
Now that you know what figures you have to reach, you can track your KPIs and your progress.
Get Your Operations in Place Before You Launch
Before you launch, take the time to get your operations in place and invest in the equipment you’ll need.
Consider:
- Technology upgrades you may need
- Whether you need to hire new people
- Whether you need any additional equipment to fulfill production
If you’re already in operation, review your processes and systems. Consider whether you’ll need to invest in new solutions or upgrade your current tech stack for:
- Operations
- Inventory
- Invoicing
- Bill payments
- Logistics
- Customer management
While you’re focused on operations, determine who will be responsible for completing what tasks.
Do you plan to:
- Outsource production?
- Hire a marketing team?
- Bring on a payroll specialist?
Plan Your Finances Today to Avoid Trouble Tomorrow
Use your marketing and sales strategies and operational plans to map out your finances. You’ll need to make assumptions and estimates, but in the end, you’ll have more clarity about your financing needs.
Planning your finances will help you understand whether your business will be profitable. It’s better to find out that your venture won’t be viable now before you invest a significant
amount of your time and money into your idea. If you find that your business isn’t profitable, you can always revisit your plan and make adjustments.
Revisit Your Plan Regularly
Business plans and goals aren’t a set-it-and-forget-it thing. They should be revisited often (weekly is best) to track your progress.
Revise your plan as needed whenever you find weaknesses and commit to Kaizen, a practice that aims to:
- Improve productivity
- Eliminate waste
- Achieve sustainable improvements
It’s all about making small changes that snowball into massive results over time.
A sound business plan will serve as a blueprint for success that will guide you in tough times. We all go through ups and downs as business owners. But your plan can help you navigate these difficult periods and come out the other side stronger than before.
Do you want help creating a plan? We can help. Get in touch with us to learn more about our advisory services or schedule an appointment.