You know how to run your business and you have a firm understanding of what your customers and clients need. And if you’re planning for small business success, you probably appreciate that success requires a strong business plan. It’s here that many small business owners may run into questions: What is business planning? And what makes a great business plan?
Fortunately, you’re not alone in asking these questions. And there is a lot you can do to help your business thrive. From improving your energy efficiency to breaking down your budget, there are many ideas for a business plan you can use to guide you to growth and success.
Let’s define what business planning is all about: a business plan is a road map for your business’s success. It outlines business goals and your next steps to attain those goals, most often in the form of year-end planning.
Year-end planning for businesses is as much about looking back as it is about looking forward, and that’s where using a year-end checklist can help. During year-end planning, a business examines the successes and setbacks of the previous year while making a plan that builds on existing strengths and addresses areas of concern. You already know that there’s a lot to plan for, so using a small business year-end checklist will allow you to keep track.
Steps you need to take during year-end planning for businesses include the following:
What makes a great business plan? In part, it’s the business plan’s ability to guide you through upcoming risks, challenges and opportunities. Planning for small business success means you’ve pinpointed where to focus your attention during the coming year.
“… Companies that plan grow 30 percent faster than companies that do not.”
Business plans identify opportunities for growth and highlight problems that require correction. As a strategy for business, planning has a positive effect on small business success. According to a study published in the Journal of Management Studies, companies that plan grow 30 percent faster than companies that do not.
Now that you’ve planned your strategy, who will read your business plan? Annual business plans are commonly used by managers as handy reference sources when considering yearly goals, creating budgets or deciding upon marketing strategies.
You can ask employees to read your business plan to help guide their expectations and objectives. Business plans designed to raise funds or interest financial partners might appear more formal but use much of the same information.
Of all the small business plan tips, the most important is to plan ahead. Your plan should provide a glimpse of the business’s future, both in terms of market growth and sustainability. The following business planning tips are a guide to helping you generate ideas for a business plan.
What makes a great business plan depends largely on your company’s goals. A well-thought-out strategy offers a game plan for both short- and long-term goals as you move forward. It helps staff understand those goals and helps mold their behavior and focus.
Plans may also convey important goals to potential business partners. The U.S. Small Business Association (SBA) recommends that a business plan discusses strategy and tactics, as well as financial projections.
Examining current trends and market shifts is a vital part of building a business plan that helps you stay competitive in your industry. Small business plan tips recommend keeping your customers’ tastes in mind. As customers shift toward sustainable businesses, for instance, you may be able to improve your image by going paperless or following other environmentally-focused tips. For business planning, sustainable business practices can save you—and your customers—in the long run.
Writing a business plan is an excellent time for conducting some market research. An understanding of your competitors’ strategies can help you discover important trends in your industry. Be sure to only work with realistic industry comparisons, and use the information to refine and diversify your product while homing in on your target audience.
Keeping an eye on your expenditures is one of the most basic yet important small business plan tips. High energy costs may suggest that you may need to improve the energy efficiency of your building. Completing an energy audit will reveal the changes needed to lower small business energy costs, and business owners can even partner with energy start-ups to monitor and reduce energy use.
The path to business success is strewn with challenges and pitfalls, some of which can devastate a small business’s finances. Planning for small business success can allow you to predict potential challenges both in the immediate future and down the road and to help you mitigate such problems.
Year-end planning offers a chance to make financial projections for the coming year. Use the latest and most accurate financial information when making projections. Not only will projections help identify growth opportunities, but they also help you identify areas where you’ve allocated too many funds—or not enough.
This is also a great time to look for small business cost-cutting ideas, particularly ways to reduce your fixed costs.
Be conservative about next year’s business projections, and you should always make lower estimates when making financial projections. If your projections exceed your expectations, you can reinvest the extra funds into the business later in the year. That doesn’t hold true if you’ve overestimated.
When planning your yearly goals, be realistic about your time and resources: you can only work toward a limited number of goals every year. For a small business, working on no more than three goals a year is an attainable task—setting too many annual goals will only overtax you and your employees.
A strong management team goes a long way toward making your yearly business plan a reality by unifying business goals and empowering employees. Look for ways to improve communication between management and employees, either through workshops, informal meetings or other company-wide initiatives.
Taking the time to focus on your employees is one of the tips for business planning that often pays dividends. Identify your employees’ present and future needs, and consider which employees need additional training to either perform better in their current positions or in preparation for additional responsibilities or promotions. Generating employee engagement ideas can have a positive result on productivity, morale and even energy savings.
If you don’t know where to start for your business plan, Constellation can help. Our business development managers can help you find an energy plan that makes sense for your business, and can help you accomplish your specific energy goals.
Now that you know what business planning is and how to go about it, you are ready to guide your business to success. By using these business planning tips, you can create a strong, workable business plan that will help your enterprise thrive and grow.
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