5 Questions You Should Ask Before Drafting Your 2020 Business Plan
Every successful entrepreneur started out with a strong plan, and the fact is the planning doesn’t stop just because you’re up and running smoothly. Making an annual plan for your small business will help you stay organized and prepare your business for a successful new year.
“A business without a plan is a business in free fall,” writes serial entrepreneur Brian Lim in a blog for business.com.
The founder and CEO of iHeartRaves, EmazingLights and INTO THE AM, adds, “Benjamin Franklin said it best: ‘Failing to plan is planning to fail.’”
The What and When
Ideally you should start drafting your business plan for next year in October. But the key is to make one – whenever your start date, just have a plan ready to roll before the first of the year.
It doesn’t have to be a dissertation. Make your business plan simple, advises Glenn Smith, an executive coach based in Houston.
“Don’t overcomplicate the plan, the process, or turn your strategy into the Magna Carta,” the CEO of Glenn Smith Executive Coaching writes on his website. He recommends a plan that covers marketing, finances or your budget, and operational improvements.
How To Start the Process
Creating your business plan for the next year will require some reflecting on your part. An analysis of where you’ve been makes for a good guide for the future as well as some brainstorming. By doing this, you can then develop well thought-out goals for your success in the new year.
Here are 5 questions to get the process started for next year’s business plan:
What were your lessons? This is the “learn from your failures” part of the process. Look at the past year with an eye toward any mistakes or missteps. What could you have done differently for a more positive outcome?
These aren’t necessarily just major crises but things you think could have turned out differently with a little tweaking.
If you added products or services last year that weren’t as successful as you expected, for example, determine why, so you can turn it into a “lesson.” Or you might recall operational or financial weaknesses that you can “fix,” such as software, employee or cash flow issues.
What are your opportunities ahead? Outline the opportunities you envision for your business in the new year. Then identify ways to take advantage of them.
For example, you might see an opportunity to reach new target audiences – list the steps that will lead you to them and what you could do to attract their business.
Other opportunities to explore might come in the form of relationships with vendors, how to express appreciation (and generate loyalty) from existing customers or other ways to grow your business, such as new technology or marketing strategy.
What are the possible obstacles? You’ll want to look ahead with a little research, from expected trends in your industry to regulation and tax changes that will affect your type of company or products. Then, you can incorporate ways to account for these changes in your business plan.
Other possible obstacles might be new competitors. Are there any new businesses or competing products coming online next year? What about expected interest rate hikes or new tariffs? Are these areas that could affect your small business?
What are you hoping to accomplish? Take a good look at where you want to be in 12 to 15 months. Use your answers to create some specific goals for your small business and outline steps to make them a reality.
“Think about sales. Think about profit. Think about your geographical footprint,” writes Louis Mosca, executive vice president and CEO of American Management Services, in a blog for Forbes.
This is where you would include an eye toward growth areas. Are you looking to increase your market share in your area or expand on the services you provide?
What about resources? Do you have the resources and access to the resources your business might need in the future? Meaning, the capital needed to hit the ground running come Jan. 1 and beyond?
Examine the financial year ahead in terms of known and possible scenarios. Whether that means countering fluctuating income in off months, accessing additional capital needed for equipment, or payments to vendors or employees during peak production months.
Resource-wise, what about technology? Do you plan to add software or add a contract worker to meet the goals you’ve outlined for next year?