You've made the decision to go ahead and go through the process of formulating your new business plan. You ring your small business accountant and advisor to tell them that you would like to start as soon as possible. When you do though, Verne Harnish in his book Mastering The Rockefeller Habits points out that you need to very early on consider some key areas and ask yourself some very hard questions. The reality is that if you don't, no amount of business planning is ever going to work effectively and you could be just completely wasting your time.
So, what as a matter of priority should you consider is the most important focus to have given your current situation?
Figure 1: Working together to get a business plan starts with asking the hard questions first.
Priority #1 Business Is Not Big Enough
Sometimes no matter what you do, competition may negate your ability to play on the same level playing field whether it be due to pricing power through economies of scale or otherwise. If your point of difference is not strong enough then you may just need to find a way to get bigger. This could be through a merger or looking at a strategic acquisition.
Does your business need to get bigger and if so, how do you propose to achieve that?
Priority #2 Business Lacks A Key Player
When you start your enterprise, you will find yourself mostly being an all-rounder. You are the visionary with the ideas, the finance department, the managing director and the key person to talk to for sales not to mention HR.
There will come a time when you need a key player to take over some of these roles so you can get back to working on the business not in the business. Systems will help you relinquish some of the business's reliance on you.
Does your business need one or two key players and if so, which roles do they need to take and how will this free you up to make sure the business is on the right strategic business direction?
Figure 2: Do you need a new player to tackle issues you spend time on daily when you could be spending time being more strategic?
Priority #3 The Economic Engine Is Broken
It's hard to admit it, but are you in the right game to make money or is it time to leave and do something else. If technology has made your business redundant, could you be flogging a dead horse?
If things are tough, can you fight your way out of it or is it time to get out now?
Priority #4 Key Business Component Controlled By Someone Else
If a competitor has taken control of a key area of your business (such as an exclusive piece of software or patent or distribution rights), how do you propose to counter this?
What areas of your business supply need to be tightened and if you've lost them what is your Plan B?
Priority #5 You Need A Bigger War Chest
Maybe you can see that you need a cash injection to get the business more competitive or more prominent with its marketing or it could be a new piece of equipment. If this is the case should you be as a matter of urgency looking for:
- bank finance; or
- injecting your own capital?
Priority #6 Need To Scale Back
In certain life cycles of a business, it can mean that the hard decision to scale back so that you can reach a break even point and stop the bleeding is the reluctant but necessary step to take. This can mean swallowing a bit of pride but if this is a decision you need to make in order to survive and then have another crack it at then so be it. Get help from your small business accountants Sydney & Dubbo to work out your break even point and redo your three way budgets which include cash flow forecasts.
Once you get back on track, slowly rebuild so that you can relaunch and take on the market with the right foundations.
Figure 3: Do you need to scale back and reduce expenses that could come back to bite you financially if you don't?
Getting down and making the decision to think out your business plan is a great start!
Just make sure that you work out which of the above points relate to your circumstances and then focus hard on how you will overcome the current adversity.
Your business plan success will depend on it!