Thinking ahead
We have all heard the phrase ‘the only constant in life is change’ and this also applies to business. In fact, there is an argument to be made that the best time to plan ahead is when everything seems fine because you are not burdened by immediate concerns.
When planning for the long term you need to consider the predictability of customer demand, the economic circumstances you will be operating in, availability of staff and access to finance. As discussed in previous blogs your intentions for the business are also relevant – if you started out with a view to selling up in the next few years your objectives will be different from someone who is in it for the long haul.
No time to wait
It is not easy to make time to plan for the future when you are working long hours just dealing with the day-to-day demands of running the business. However, a business that is just trundling along leaves itself open to being overtaken by more progressive competitors.
As a small business your ability to make changes may also be limited by your dependence on a limited number of large customers. When you are a small part of a large supply chain and a major customer asks you to jump, your response will probably be ‘how high?’
However, many large companies are in the midst of transformation programmes that will have a major impact on their supply chains and what they want their suppliers to do for them. By taking the time to find out more about these programmes you may discover that the changes required will yield long term benefits that outweigh any initial disruption.
What’s the plan man?
The first step in long term business planning is to understand your priorities. When resources are scarce it is vital that improvements are targeted at those areas that will make the most difference, so ask yourself what matters most to your customers. From there it is possible to develop a strategy that will ensure the business focuses on the right areas to increase sales and profitability.
Factors that get in the way of long term planning include understanding and managing your supply chain and finding people with the right skills and experience.
It may also be helpful to take time away from the business to network and think about other things, or even just to clear your mind.
Don’t sell yourself short
A common explanation for why small businesses don’t look too far ahead is that they lack the positivity and belief in their product or service to succeed. The best way to overcome this lack of confidence is to remind yourself how you got to this point.
This is just one of the reasons why financial planning is a key element of long term business planning. Costings should be critically analysed at each stage of the process, which is where the insights derived from a cloud-based accounting solution such as Big Red Cloud can be invaluable.
Don’t convince yourself that you haven’t got time to plan for the future. Like money, time is there to be managed and used effectively.
