PLANNING FOR BUSINESS SUCCESS
When you’re running a business, it’s easy to get bogged down in day-to-day problems and forget the bigger picture. However, successful businesses invest time to create and manage budgets, prepare and review business plans and regularly monitor finance and performance.
Structured planning can make all the difference to the growth of your business. It will enable you to concentrate resources on improving profits, reducing costs and increasing returns on investment.
In fact, even without a formal process, many businesses carry out the majority of the activities associated with business planning, such as thinking about growth areas, competitors, cash flow and profit.
Converting this into a cohesive process to manage your business’ development doesn’t have to be difficult or time-consuming. The most important thing is that plans are made, they are dynamic and are communicated to everyone involved.
The key benefit of business planning is that it allows you to create a focus for the direction of your business and provides targets that will help your business grow. It will also give you the opportunity to stand back and review your performance and the factors affecting your business. Business planning can give you:
- a greater ability to make continuous improvements and anticipate problems
- sound financial information on which to base decisions
- improved clarity and focus
- a greater confidence in your decision-making
WHAT TO INCLUDE IN YOUR BUSINESS PLAN
The main aim of your annual business plan is to set out the strategy and action plan for your business. This should include a clear financial picture of where you stand - and expect to stand - over the coming year. Your annual business plan should include:
- an outline of changes that you want to make to your business
- potential changes to your market, customers, and competition
- your objectives and goals for the year
- your key performance indicators
- any issues or problems
- any operational changes
- information about your management and people
- your financial performance and forecasts
- details of investment in the business
Business planning is most effective when it’s an ongoing process. This allows you to act quickly where necessary, rather than simply reacting to events after they’ve happened.
A TYPICAL BUSINESS PLANNING CYCLE
- Review your current performance against last year/current year targets.
- Work out your opportunities and threats.
- Analyze your successes and failures during the previous year.
- Look at your key objectives for the coming year and change or re-establish your longer-term planning.
- Identify and refine the resource implications of your review and build a budget.
- Define the new financial year’s profit-and-loss and balance-sheet targets.
- Conclude the plan.
- Review it regularly - for example, on a monthly basis - by monitoring performance, reviewing progress and achieving objectives.
- Go back to 1.
BENEFITS OF A BUSINESS BUDGET
There are a number of benefits of drawing up a business budget, including being better able to:
- manage your money effectively
- allocate appropriate resources to projects
- monitor performance
- meet your objectives
- improve decision-making
- identify problems before they occur - such as the need to raise finance or cash flow difficulties
- plan for the future
- increase staff motivation
The benefits of proper planning & budgeting are imperative to operating any successful business. Even with all the information above, it can still be a daunting task.
We’re here to help! Give us a call today to discuss how we can help you plan and budget for your business. Give me a call today or click here!