The following article appeared in the February issue of Business Franchise and was provided by Hitachi Capital Franchise Finance.
The start of the calendar year, in particular, is the time when many business owners reflect upon their business ambitions and goals.
But how could you turn those dreams into reality? We’d suggest your process be methodical and thoroughly planned, while honestly reviewing your financial viability.
‘Failing to plan is planning to fail’
Some people do set up businesses, or run their existing businesses, without a proper business plan. However, many of these fail within the first few years. Don’t allow your failure to plan get in the way of your business ambitions.
So, what should you do?
Set your SMART objectives
First of all, you need to set your SMART Business Objectives.
Specific: Ensuring your objectives are focused on what you intend on achieving.
Measurable: See how well you are doing and make management decisions that will get you back on course if necessary.
Achievable and Realistic: By all means, show ambition. However, explore all angles and make sure it will actually be possible to achieve your goals.
Time-based: So that you and your team have a focused time limit to work towards.
Understanding your Market and Competition
Next, you need to understand your Market (both local and national) and your Competition within that market place.
Depending on your product or service, you may have identified a few key customers already – but you should know who your competitors are:
Who else is offering the same or similar solutions to your prospective customers?
How are they doing that, and what are your competitive advantages over those businesses?
While it’s tempting to believe you have a unique solution to a problem, it’s unlikely. A competitor matrix, highlighting your USPs and how your proposition differentiates itself from other businesses could be a great way to review your business model.
Your Operating Strategy and Marketing Plan
Your Operating Strategy is how your business works; the logistics behind your product or service, ultimately determining where you position yourself in the desired market.
This is to be considered alongside the Marketing Plan. The best possible marketing strategies are those that test and learn as a target market responds and the proposition evolves. You should have a clear idea of your market and your pricing strategies but you need to constantly monitor and adapt these as you gain market feedback.
Assessing your resources
You will need to undertake an assessment of the physical and human resources required. This may include
any property, equipment, machinery and the team you will need to achieve your goals. Are your current
team qualified to do the job, or will they need extra training or will you need to hire additional team
Financial Projections and Cash Flow Forecasts
All of the above needs to be costed into the financial part of your plan. A monthly profit and loss projection
will track your progress and ensure its worth pursuing the dream, while the monthly cash flow forecast will
help you to identify whether you can actually afford to do it.
Your projected balance sheet will show you what the business is going to look like in monetary terms in the
future, how strong it could be and the degree of solvency that will hopefully give you a safety net if things
take a little longer than expected.
Good luck and we hope the above guidance helps you achieve your goals!
Disclaimer: Please note that this article is provided for information purposes only and not as advice or
recommendations. Before deciding to undertake any course of action you may wish to seek independent