By March, planning for the year ahead should have been already done and accomplished earlier than this time.
However if you still can’t finalise your business plan for the year ahead, then the following list of simple tips might be of significant to you and important to be considered.
Review your history
Before you plan for the future it is important to look back first of what happened in your past. If your goals last year did not realise and materialized, then find out why it did not realise. In other words, by reviewing your history and experiences, you must learn from your mistakes to avoid committing a mistake for the second time.
When you incurred operating losses because of a mistake in setting the right selling prices, then learned from it and didn’t make the same mistake twice. On the other hand, if your targets in the previous year have been achieved in 2020, then you may find ways on how these successes can be maintained or can be improved for the next year.
Analyse popular trends
Analysing trends is a useful strategy in making your business plan effective. Trend analysis refers to the concept of collecting information and attempting to spot a pattern, or trend, in the information. For planning purposes, trends try to predict the future by following a pattern. Actually, trend analysis uses your historical data.
For example, by plotting and understanding your sales and or your gross profit ratio over years, you may spot a pattern that will help you predict the outcome in the succeeding year. More specifically, a series of gross sales over the prior years which increase ten percent every year is probable that it will also increase by near ten percent in the next year.
This technique is effective, however there are still other factors that we should consider like global economics, fortuitous events or political crisis.
Consider your obligations and resources
An attainable goal when planning your small business is one that is based on your capacity and capability. Before you enter into another business battle, you should first determine all the resources that you can utilize to achieve your targets.
This is to make sure that you will not be keeping idle assets or resources in your office or in your warehouse. If you want to increase your revenue, then lease out your idle building, office space, or machineries and equipment. Furthermore, you may also encourage and utilize the hidden potentials and skills of your personnel.
If you have already determined your hidden assets, you must not also forget to determine your obligations or liabilities. To attain success, you should not only determine your strengths however also your weaknesses. Your company’s obligations must be considered in planning for the next year. These obligations are limitations that we should fully understand to avoid negative net worth, deficits and even bankruptcy.
Mind your goals and objectives
After doing the previous tips, you may now set your goals. A good objective is one that is specific, measurable, achievable, relevant and trackable (S.M.A.R.T).
Your objective must be precise; can be achieved by procedures based on time and amounts; must be reasonable and attainable; must be meaningful and significant; and must be recordable for monitoring progress.
Allocate and assign your resources
Do not rush when planning your small business! You have 12 months and 365 days for the year 2021. Your goals and procedures should be divided according to time (daily, weekly, monthly, quarterly, etc.).
Likewise, you should also wisely divide your business tasks according to the number and capability of your personnel. Remember, one great man said, “divide and conquer”.
Create your procedures
Now that you have set your goals and objectives, the question is – how can you achieve them? As any good business coach will tell you, an objective must be paired with a procedure. A procedure is a specified series of actions, tasks, steps, decisions, calculations, processes and or operations which have to be executed in the same manner in order to obtain a specific objective.
When you wish to achieve a high profit, you must create an effective procedure to reach that goal. An effective procedure should also be specific, measurable, attainable, relevant and trackable like your goal.
Set your standards
Setting standards when planning your small business is one way to monitor the effectiveness and efficiency of your business plan. Standards are the “what should be” outcome or results of your business in the future. These can be set of amounts like standard amounts of sales, cost, or expenses for a month.
These can also be set of times or periods like the number of days a receivable is collected; or a merchandise inventory is stored in a warehouse or sold to customers. By setting and comparing standards to actual results, we can be able to understand how our business is going, through analysis of variances.
Variances can be favourable or unfavourable. A higher actual revenue against standard revenue is favourable while a higher actual cost or expense over actual is unfavourable.
Make contingency plans
Do not forget to make a contingency or an emergency plan. This should cure, restore or even become the alternative when your business plan unexpectedly goes the other way.
You may also like online whiteboard
Starting and planning your small business is one of the most exciting and scary things one can do, however once it is established, you will love the flexibility and freedom. Good luck in creating the future for your business and your family during 2021 and beyond!