If you own a small to medium business, or intend to own and run one soon, you will benefit from having a business plan to put the necessary actions in place to get your business on track to success. While a business plan can look different to every business owner, there are universal steps and factors you will need to consider to create a plan that’s right for you and your business.
The BDO Taranaki team put together three universal business planning essentials for SMBs, outlined below.
Layout short and long-term goals
In general, a plan is created to achieve a goal. So, to begin creating your business plan, think about your business, family, and lifestyle. Within those separate areas, consider where you want to be in the short and long term and incorporate those goals as part of your business plan. These goals should be specific and time-sensitive.
Let’s say you want to double your overall business revenue within a year. To achieve this goal, you will need to make a business plan that incorporates financial forecasting so you have a better understanding of what drives profit so you can take steps to focus on the areas that will enhance your business’ profitability. When it comes to long-term family and lifestyle goals, you may want to run your business from home so you can focus on enriching your personal home life. To achieve this goal, you will need to be realistic about how you will balance the personal and business day and it may require having the right people in place who can keep your business running at a high level even when you’re not around. This brings us to our next point.
Entrust people to own and help achieve those goals
As entrepreneurs at heart, it’s common for SMB owners to wear many hats at once, especially at the beginning of their business journeys. As a business owner, you may be running your business, managing your accounts, and leading your team—all at the same time. As you grow it is likely you will need support from those who specialise in the various aspects of your business to be able to take it to new heights. This may involve employing the right people, our utilising the skills and experience your advisors and specialists can provide.
Each of your goals needs to have someone that will really own and manage it to achieve success. For example, if your goal is to create a cohesive brand and streamline your marketing efforts, but this isn’t an area you are familiar with, then you may want to entrust a branding and marketing expert that’s determined to help you achieve it. If you are managing the goals yourself, set a detailed plan and timeline and monitor how you are going – if you struggle with this then maybe enlist the support of someone to help keep you on track and keep you accountable.
Set key financial and non-financial metrics
Once you’ve set your goals and determined who will be key in achieving them, it’s time to set financial and non-financial metrics within those goals. These are generally known as Key Performance Indicators or KPIs. Below are some examples of financial metrics:
- operating costs
- cost of goods sold
Examples of non-financial metrics:
- conversion rates
- customer retention and churn
- customer experience
- market share
You will need to assess your set metrics regularly against your performance. After all, you can’t manage what you can’t measure. Keeping an eye on whether you’re hitting your KPIs keeps you and your team accountable, and ensures that your goals are always top of mind.
BDO Taranaki: Backing the success of New Zealand SMBs
The BDO Taranaki team rely on local knowledge, expertise, and experience to help clients of all sizes achieve their goals. If you’re a local business owner and need help creating a business plan or planning business growth, our leading business advisers can help. Get in touch with BDO NZ today.