It is the end of the year again, and you are thinking of what is going to happen with your business next year. You probably have an idea about where you want your business to go, but you are not 100% sure of the steps to take to get there. Most importantly, what are the financial metrics that will get you to where you want to go, and what business activities do you need to focus on to achieve the desired business outcomes. No doubt, a business planning, and budgeting process will help you get the clarity that you want.
Here are the top five steps that you need to focus on when you are going through this painful annual process:
- Internalize First. Even if you have a fantastic idea, you need to make sure that you have carefully designed all the stages you’ll need to go through to transform your idea into an actual business. So, draw out your organizational structure, focusing on your most senior team first, and then start trickling down your organization to the salespeople, etc… then start drawing out what your operation is going to look like and how you are going to get and serve your first few customers. Think about how you are going to be protecting yourself from potential lawsuits, and how you are going to outmaneuver your competition, etc… What about your cash flow the KPIs you need to focus on, and activities you need to build into your company that will have a direct impact on minimizing your expenses and increasing your sales revenue.
- Do your homework. If you are a startup, needless to say, you should have probably researched everything you can about the business you are intending to start, before you get started. If you are an operational company, do the same. When companies have been in business for a couple of years business owners presume that the market is still the same. Sometimes, year on year, little nuances and shifts in the market will start surface that eventual will change it. Don’t take my word for it. Ask Kodak. Your business plan will start to make better sense, as you uncover critical information. Most importantly, don’t forget about your competition.
- Talk to your Customers. Probably the key to putting together a bulletproof business plan is talking to your customers. If you don’t have any yet, talk to potential ones. Have open conversations, discuss their needs and pain points and their frustrations around the service and product you are about to offer. Is your product or service one they want or need? Is your customer base likely to grow or shrink with time? Ask them why they may buy your product, and what would they really be willing to pay for it.
- Solicit reactions. Talk to friends, relatives, colleagues, potential investors or even bankers. Once you start hearing the same criticisms, answers, and questions over and over again you will know that you have almost all the feedback people can throw at you. This should give you enough information to help you tweak your business plan and even your solution design in the right direction.
- Ask for professional help. Hire someone to help you, guide you or even outsource to, the areas about your business plan that you are not strong with. For most people, this tends to be the numbers side, and the sales and marketing side. Most business owners are technically strong in the product/service side of their business. That is probably why they got into that business in the first place. But the Marketing, Sales, and Finance areas, and getting those right, are usually not everyone’s walk in the park. Doing this should help you get additional, unbiased and professional feedback on your plan.
The business planning process can be exciting and painful at the same time. But once you have it done right, you should get a business plan that will guide your business to success.
Written by Hiram Aziz, Managing Partner at Ekuiplus, a top-ranked financial business services firm that enables business owners to make better business decisions. email@example.com, +971.4.3699670. www.ekuiplus.com