So, it is February and you haven’t done a business plan for the year. The thought of it makes you feel sick or want to die of boredom.
You are avoiding your business coach, or some other annoying person, who is imploring you to do one.
Why is this so?
By the way, if you are not in business, think of a business plan as an annual plan, personal growth plan, career plan. Whichever. It is highly relevant to do one.
Most business plan templates will have you answering: What is your vision? What is your mission? What is your long/medium/short term strategy?
Don’t start there.
Those questions are too hard to answer. We might get to them later.
Let’s start on a firmer footing and do a bottom up approach.
The things we do for love
What are your products or services? What do you sell? Write them down. (Most of us in the SME world will have between 2-10 things written down). If you haven’t done a service catalogue before, you might want to expand the level of detail on your services. If your answer to this is “Well I do a bit of everything”, then don’t proceed any further until you can answer this question.
Next, for each of your products/services, what are you goals for this product in 2023? Do you want to grow the product range, or phase it out? By what percentage? For example, one of my products is CRM implementations for clients. My goal is to do 2 minimum per month and I want to hire someone who will help me do it. That’s it. Don’t aggregate to the organisation as a whole, just think of each product. It is valid to say, I have no goals for this product, I just want it to stay as is.
Is anyone alive out there?
Next, what is your market for this product? Who wants it? Who is buying it now and who potentially could buy it? How is this changing in 2023? You may need to think out of the box for this one. The classic example is Apple in the Jobs Period (Mark 2). Apple didn’t sell to people who wanted computers, but to people who wanted well designed, nice looking equipment.
Next, and most importantly, define each of your products in the value it provides the customer, the person who has bought it, or is thinking of buying it. Most of us can define what we sell, but what we don’t think of what value it gives the customer. As an example, I never understood the value of a bookkeeper. I thought it was so easy just doing it myself. Then my Accountant encouraged me to use one. I said why? She said because I will save so much time (and money) doing your annual tax return, and fixing up your mistakes. Boom! There was value. A client of mine sells and installs security alarms. The value they bring is in avoiding the enormous emotional, (and possibly financial) stress of someone breaking into your home or office, not in the alarm product itself.
By now, you’ve almost nailed it.
Most companies do SWOT analysis on the whole company as a way to form strategy. This can often lead to broad and bland ideas and statements that don’t connect or inspire. As part of this year’s business plan, do a SWOT on each of your products and services. What are the current strengths of your product, and where is it falling down? What can you see happening in 2023 that will spur growth, or send sales into a mighty tailspin? Another client of mine does credit card, payment compliance for hotels. A great opportunity this year is the return of global travel. A massive threat is a new strain of Covid, and government’s attitudes to shutting the travel gate as quick as a Cheetah.
Money too tight to mention
Of course, no plan is complete without mentioning money! Outline your expectations of revenue for each product – by month, by quarter and annually. What gross and net profit are you expecting for each product? What pricing strategy will you need? Your accountants and financial people can help you with your lagging indicators (i.e. what has happened already) but your business plan needs to focus on leading indicators – what is going to happen.
It is a simple analogy – a good sales process will open the door and help customer’s step through it, but marketing will bring customers to that door. Having a well thought out marketing plan is essential for your business this year. What “channels” are you using for marketing? Is it time to stop relying on the old ways and start embracing some digital marketing such as LinkedIn, Instagram and Facebook for instance. Does your website need a lift? Is it time to go back to trade shows or conferences that you have been willingly or unwillingly missing the last few years? Do you need to get back to those networking breakfasts or lunches?
There will be some things that are not tied to a product or service that you also may have to document. But essentially, if you follow the above steps, and take a bottom-up approach, you should flush out all you need to do to have a successful year. Start it tomorrow. And don’t be too hard on that annoying person telling you to do a business plan – it will do you good.