Planning is a key element to running a successful business. To get where you want to go, you’ll need a business plan. Use the previous 5 exercises to help you write your plan.
Most businesses don’t have any kind of plan. So, start with a simple plan that pinpoints what you want to achieve. Here’s an example:
- In five years’ time, I want the business to be worth £5 million
- To achieve this, it must make annual profits of at least £1.5 million
- To achieve this, it must have sales of £10 million
- I need to increase my sales by, on average, £1 million a year
- To do this, I will need to:
- Increase my customer base by 15%
- Increase the number of times my customers buy from me by 20%
- Raise prices by 10% Having developed a basic plan, it’s time to identify the constraints you think may get in the way of successful implementation.
Consider the following:
1. Inside the business, what are the principal constraints on our growth? Some possibilities:
- Lack of capital (financing)
- Lack of credit from suppliers
- Too many customers owing you money
- Underperforming owners/attitude issues
- Underperforming staff/attitude issues
- Internal conflicts
- Lack of direction
- Outdated technology
- Lack of marketing
- Missing skills
- Retirement and succession issues
- Undesirable customers
- Excessive payroll
- High occupancy costs
2. Outside the business, what are the principal constraints on our growth?
- The economy
- Energy prices
- Shipping costs
What you should find is that you can’t do much about the outside constraints but you can do a lot about internal constraints.