New Year New: Business Plan
Business planning for 2021 is more difficult as we cannot predict the date of a return to normality or what will happen with Brexit just yet, but there are some practical steps you can take to minimise potential disruption to your business:
- Review your Budgets and set realistic and achievable targets for 2021.
- Get your employees involved in a discussion of likely trading conditions and get their input on reducing costs and maintaining revenues.
- Review and flow chart the main processes in your business (e.g. Sales processing, order fulfilment, shipping etc.) and challenge the need for each step.
- Encourage team members to suggest ways to streamline and simplify processes (e.g. sit down and brainstorm about efficiencies and cost reduction).
- Put extra effort into making sure your relationships with your customers are solid.
- Review your list of products and services and eliminate those that are unprofitable or not core products/services.
- Review efficiency of business processes and consider alternatives such as outsourcing certain activities locally or overseas.
- Agree extended payment terms (if applicable) with all suppliers in advance.
- Pull everyone together and explain the business strategy and get their buy-in.
- Remember to spend some quality time with the people that matter to you, especially family and friends!
- Use the holiday period as an opportunity to reflect on the exceptional challenges you have faced as a result of Covid-19 over the last 12 months. What were your most significant accomplishments? Have you encountered any setbacks or disappointments? Consider what you have learned from your experiences to improve your prospects for 2021.
- Send notes to colleagues, customers and contacts to thank them for their support during such a difficult year.
- Your final task is to set yourself and the business some specific goals for 2021. Make sure to keep them visible and share them.
Please talk to us about cash flow planning for the next six months, we can help with a template so you can do this yourself or work together to produce estimates for a variety of scenarios.
Some of the advantages of having a Business Plan are:
- To review and set the direction of the business - see the bigger picture and use the plan to connect the different parts of the business into one strategic goal
- Helps identify common goals amongst several directors (if applicable) – it is important to align personal goals with business goals. The business should be giving you what you want
- Helps identify and prioritise your key goals – you can’t do everything so need to allocate time, effort and resources strategically
- Helps create strategies to achieve your goals
- Helps identify what you will need to achieve your goals in terms of resource and targets
- Helps to set timeframes for achieving your goals to monitor this going forward
- Helps to develop a tool to communicate your business goals and vision with your team – when the vision of the business owner and team are aligned, the business is far more likely to flourish
- Enable you to divide your goals into short term and long term - quick wins vs. key projects
- Helps to develop a template to review actual performance against targets and provide accountability
- Helps to create a platform to develop financial forecasts
- It can be used as a basis to set team members’ individual goals / targets
When we run business planning sessions with clients, it allows the business owners to take time out of the hustle and bustle of the business and in a half-day session cover off, the key issues covered include:
- Discussing and setting both personal and business goals for the next 12 months
- Discussing and agreeing on an action plan with strategies to support achievement of goals
- Identifying Gross Revenue Targets and Key Performance Indicators
- Identifying opportunities and vulnerabilities in your business that need to be managed
- Establishing a 90 Day Action Plan to address immediate critical issues
The Business Plan does not have to be a 1 inch thick document. In fact, condensing it down into the one / two pages is perfect.
So let 2021 be the year you finally commit to writing the business plan – and of course if you need assistance with any of this just give us a call.
If you have any questions or need any further advice, please don't hesitate to get in touch with us today