For me small business planning centers around some very basic questions and I always aim to answer those first:
- How much is my business going to cost to set-up?
- What are the monthly running costs of my start-up?
- Is anyone willing to buy what I have to sell?
- What other problems or challenges does my business face?
- What are my best selling points or strength?
You may thing that these are all very basic questions and you would be right – but can you really answer them for your small business? I think I would find it difficult at times too. So I have devised this very basic business planning system I would like to share with you:
- Cash-flow Planning
- SWOT – Strength, Weakness, Opportunities and Threats Analysis
- Mission & Goals Statement
Let us have a look at each one of these components individually – first up cash-flow planning – without money it is difficult to run a business. You may see that as a problem, I view that as an opportunity in as much that it forces you to sell your service or product, before you do anything else.
You could of cause do a market study and analysis, spend “lots” of money in the process and have very little extra useful information at the end of the process. While if someone buys your service or product you know it sells – without spending a penny. Enter your sales into a cash-flow and you can easily work out how much cost your small business can take. I’m passionate about “bootstrapping your small business” from day one.
This in turn will help you to focus on saving money wherever you can, since you will only make very little money in the beginning. You will understand that payment terms you offer to your clients or payment terms you receive from your suppliers can greatly help with your cash-flow, I have written about cash-flow planning before.
Secondly I like to do a SWOT analysis so I can focus myself and others in my business to stay “on message” and understand the vision for the business better. Even if you have no staff to begin with, it will help you to make the right decisions and stay focused.
Strength and Weaknesses are “internal” factors where you need to be honest with yourself and write down what you do well and what you do badly – writing it down is almost therapeutic – enabling you base future decisions on these facts, building on your strength, while avoiding your weak spots.
Opportunities and Threats are all about “external” factors and deal with issues like your unique differentiators for your products and services in the market place, as well as your competitors, red-tape, funding issues, etc. Again just writing them down will move you forward.
Last but not least I find it helpful to have a “Mission Statement” for my business, what do I want to achieve, so my customers, partners and others understand what my business is all about.
The “Goals Statement” is more personal, I write down why I run my small business or why I want to start a business.
As with all plans it is of the utmost importance to revisit your business plan as often as once a month or at times when you do not know which decision to take – go to your goals list, it will help you to focus on the way forward.
Doing basic business planning like that will help you to run and grow your business, and it can be fun too. Remember it is cheaper to test your plans on paper then for real with your own money.
I wish you and your small business or start-up business, like SOHO-, SME, SMB-, Micro-, Lifestyle-, Home-, DIY-, Hobby-, Boomer- or Personal business, like professional, contractors, freelancer, self-employed, sole-trader and virtual assistants “Happy Planning and Success”! ST.