Time For A New Biz Plan?
 By Patrick L. Wynne

When you ask small-business owners whether they have a business plan, many will point to their head and say “It’s all in here.”

But there’s no substitute for a written business plan, especially in these uncertain times when sales and revenues are likely declining. If you’ve never created a business plan or haven’t updated your plan recently, there’s no better time to do so than right now.

First, block out some time to focus on the task. Whether you’re creating a new plan from scratch or updating a plan, you need to set aside a full day or two of uninterrupted time, preferably away from your regular office. Next, gather the materials you’ll need. This includes all financial records, bank statements, customer and supplier lists, industry reports and data, etc.

Start by analyzing where your company has been in the past, where it is now and where you’d like it to be in one year, three years and five years. This analysis will help form the framework for your planning process.

Pay particular attention to the following sections of your plan:

Your industry
What is the general state of your industry right now? Has it been hit hard by the recession or is it making it through relatively unscathed?

Most companies in the financial services industry, for example, are experiencing downturns, while industries like health care, education and security are often considered recession-proof.

Knowing how your industry is fairing and how the economic changes may impact your industry will help you plan for any adjustments that might be necessary.

Your marketing
You should continually evaluate your marketing plans to determine if they’re producing the desired results. You shouldn’t spend a dollar on a marketing initiative without a way to determine its return on investment (ROI).

Look at the marketing you’ve done in the past for your small business. Did it result in new leads or new customers? Did the marketing effort pay for itself by delivering more sales?

If your marketing isn’t paying off, now’s the time to implement a new plan.

Your finances
Producing regular financial statements should be a top priority in these shaky economic times. You should look at and understand your:

• Cash flow statement
• Balance sheet
• Profit and loss (P&L) statement

Managing a business without these financial reports is like driving a car blindfolded: You can’t see where your business is headed financially or the potential potholes and roadblocks in your way.

To help you create the financial statements you need, turn to QuickBooks financial software. More than 2.5 million businesses use QuickBooks, making it the most widely used small-business accounting software. As an AFS Member, you can save 20 percent on QuickBooks and get free shipping.

Your competition
Often, moves by your competition will dictate your own company’s strategy. Pour over the collateral material, press releases, marketing and advertising, and Web sites of your key competitors to stay on top of what they’re doing and see how it may affect you.

Your customers
Are you gaining customers? Losing customers? Is the type of customer you serve changing?

By identifying your key market, you can create a marketing plan to reach those customers. And you can segment your customers into niche markets, which will give you the opportunity to target your marketing and advertising to those customers.

(Posted February 2009)

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