Business Tip - Business Planning

IS YOUR COMPANY PREPARED FOR THE YEARS TO COME BY HAVING A BUSINESS PLAN IN PLACE?

Every small business will inevitably face challenges and obstacles throughout the course of its existence.  In that regard, it is often those companies who have a plan in place that are able to persevere through these pitfalls, whereas those companies who don’t have a plan in place are often overcome by the same problems and difficulties.  A common proverb states: “If you fail to plan, you are planning to fail.”  A key component to the success of any business is having a comprehensive business plan in place to plan for any potential threats, and to outline a strategy for the success of the company moving forward.

Through the creation of a written business plan, key personnel within the company are given the opportunity to put specific ideas and thoughts down in writing regarding the future direction of the company in order to position your firm for future growth.  Having a business plan will help you make better decisions because it causes you to focus on specific goals and targets, rather than chasing every opportunity that you are presented with (specifically those that aren’t feasible).  Since a business plan is a vital component of your businesses’ success, I wanted to highlight a few elements that it should contain:

Financial Goals: Many owners do not have the financial goals for their company in terms of revenue and profit identified and as such, they have no way to measure the effectiveness or their employees, and whether or not the company is achieving success.  Every business should have their financial goals for the next five years written down.  Using your financial goals as a finish line, you can begin planning for the financial resources, the personnel resources, the partnerships, etc. you will need in
order to achieve these goals.  Once you have your financial goals identified, you can begin to project your company’s expenses to ensure that you remain within your budget to hit these goals.

Mission Statement/Vision Statement/Company Values:  I believe that every company should have a mission statement, a vision statement, and a list of company values.  Your company’s mission statement outlines the purpose of your company (why the business was started).  Your company’s vision statement outlines your dream
for where you want your business to be (where your business is going).  Finally, your company values outline those principles that you want to govern how you conduct business (how you are going to get there).

SWOT Analysis (Strengths, Weaknesses, Opportunities, Threats):  Conducting a SWOT analysis on your company enables you to analyze your company’s strengths and how to exploit them; it causes you to analyze your company’s weaknesses and how to improve upon them, it causes you to analyze upcoming opportunities (new funding, etc.) and how you can take advantage of them, and finally it causes you to analyze the threats on the horizon (sequestration, recession, etc.) and
how you can plan for them (causing you to be proactive instead of being reactive).

Marketing Plan:  Each firm should have an outlined marketing plan identifying their target market segments (i.e. local/state/federal agencies, commercial/private clients, etc.), and the specific steps that you are going to implement in order to promote your company within each segment (i.e. obtaining applicable certifications, sending capabilities statements to their POC to request a meeting, attending networking events, etc.)

Succession Plan:  Most companies have at least one or two key personnel within the company who are critical to the success of the firm. In most cases many small businesses have not planned for the likelihood that this person (or these persons) are absent from the company, causing the operation of the business to suffer tremendously.   In that regard, it would be wise to begin succession planning, which is the process of grooming, mentoring, and training other individuals to step up in the place of your key personnel should they be absent, enabling your company’s operations to not miss a beat should something happen to an important employee.

Action Items:  At the conclusion of your business plan, I recommend that you outline between 10-20 specific action items that are represent the specific steps that you are going to implement in order to achieve your financial goals (i.e. hire a new
employee, obtain the 8(a) certification, obtain a GSA Schedule, apply for a line of credit, etc.), along with identifying the projected completion date for each action item (to hold yourself accountable to its completion).

Once you have your business plan developed, don’t stash it away in your file cabinet to collect dust.  I recommend that you have a weekly 1 hour meeting with your team where you discuss the strategy and the goals outlined in your business plan, and update it as necessary so that it always remains current (are you doing this?).

If needed, Sams Contracting Consulting and Training can assist your organization with the development or update of your company’s business plan to help you position your company for future growth, which can also be used to apply for a loan or line of credit!