Under normal circumstances, finding the time to plan ahead is one of the biggest challenges for small business owners. Doing that legwork now could help you avoid costly mistakes down the line.
The legendary investor Warren Buffett once said that to be successful you should be fearful when others are greedy and greedy only when others are fearful. There is certainly plenty of fear around at the moment, so why not spend some time asking yourself where you want to go with your business and give some thought to how you might get there.
You probably already have a plan in your head, but make sure you put it in writing. Firstly, this means you are more likely to stick to it and secondly, writing it down will force you to think it through again before you make any major decisions. There is also plenty of research to suggest that companies with a written business plan are more successful.
Of course, this doesn’t mean you have to stick to the original plan come what may. There has been much talk about how society and business will change as a result of the coronavirus, so it is important to factor possible changes into any forecasts.
For instance, will your customers be more inclined to have goods delivered rather than collect them? Will staff expect more flexibility around working from home? Will you have to find new suppliers?
Business plans are not just for start-ups either. Even established businesses can benefit from a plan that looks at what has been achieved and what changes might be required, especially if you were struggling before lockdown.
In an ideal world a business plan is a roadmap to profitability, although in the early stages it may be more about developing the brand, maximising growth and securing funding. Once you have made your first month’s sales you should be forecasting cash flow and preparing the business for peaks and troughs. Ideally you should monitor cash flow on a weekly basis – if there is a problem, leaving it until the end of the month might be too late.
Be honest about the cost of growing the business. You should be able to work out the additional cost of recruiting more staff or moving to larger premises, but what about your suppliers – could they handle larger orders without increasing their prices?
It is also important that take time to consider your own ambitions when creating a business plan. Being an entrepreneur might not sound like a career, but it is so you need to consider how you will achieve your personal objectives and the areas you need to improve to ensure your business has the best chance of success.
With so many businesses likely to go to the wall as a result of the current restrictions there will be a lot of goodwill towards new ventures over the coming months. A sensible, realistically costed business plan will leave you well placed to capitalise on the likely post-lockdown surge.
You can download a copy of the Business Plan Guide HERE