7 things that indicate that your company needs a new business plan

Katie Mitchell

Oct 6, 2020

"Goal": Developing a business plan is essential for the proper functioning of the company. If you do it following these tips, you could put your business at the top of the market.

 

The business plan is a document in which the business's objectives are expressed and the planning necessary to achieve them. Although it is generally thought that only new companies require it, the truth is that there are many situations in which an individual activity needs to change course. And there again, it is essential to have previously developed this summary. In this free essay, we want to talk to you about creating it correctly and teaching you to detect the indicators that it is time to restructure it in your case.

 

All companies must create a strategic plan, a business plan to plan how they will operate, and possible strategies to develop. This document is not only for new companies or future projects; it must also be carried out in the entities that are already in operation. In this way, they can set objectives to be met and set the time and define the key indicators to measure those business goals.

 

When to make a business plan in your SME

 

It is advisable to make a business plan at the beginning of any activity when it is detected that the market changes have been such that the company needs a significant restructuring.

 

At least once a year in all companies, this document should be reviewed, establishing new objectives, guidelines, or changing those that have not evolved as planned.

 

How to approach a business plan

 

The first step is to analyze all the ideas that arise and the company's problems or has been through. At this point, the most important thing is to explain the needs of the project clearly.

 

This part is fundamental, but should not be postponed. It must be done as soon as possible to implement the plan to improve the company.

 

Problems when implementing a business plan

 

When implementing the plan, certain aspects must be taken into account, and all the details must be clearly defined so that the proposed objectives are met.

 

  • Time of year. Businesses vary and suffer significantly from seasonality.
  • Location. The situation of the company, where the headquarters are, and the subsidiaries, if any.
  • Analysis of macro variables. These will tell you the best time to launch and implement the plan.
  • Analysis of micro variables. Study and analyze the competition, clients, and suppliers.

 

Step by step of a business plan

 

Although every company is a world, and there are no magic rules, there are specific guidelines to consider when developing a business plan. In the case of SMEs, we could summarise them in these eight steps:

 

  1. Introduction. Talk about your company, its history, type of business, and structure. This part is essential if you think about potential investors to give a general and summarised overview of what your company is.
  2. Business. Describe your business, your proposal, the mission of the company. Make a brief description of the objectives and the markets you want to address.
  3. At this point, you must deal with four fundamental aspects: competition, customers, market, and sales estimate. Analyze and describe these points to set out the objectives in a realistic way and implement actions to meet them.
  4. Product. Please talk about your product or service, the way it is produced, and the facilities you have. It could also be valued in the market according to the competition and the target you are addressing.
  5. Strategy. Once you have analyzed the product and seen its strengths and weaknesses, the next step is to set out the sales strategy based on the market and the competition.
  6. Management. Describe the directors of your company. Talk about their experience and training so that the potential investor will see that you have a prepared and capable team capable of making the business succeed.
  7. Finance. Study the money you need or will need and, very importantly, where you will get it from. It is necessary to analyze the cash flow, its results, and the annual balance sheet.
  8. Financing. It has a lot to do with the previous point. It describes what the sources of funding for the company and the potential investors will be.

 

The 7 signs of companies where something is wrong

 

It is not easy for an entrepreneur to realize that his business is not working as it should. And this can eventually lead to specific problems and consequences such as the closure of the company. If you observe these seven signs in your company, be aware of them, and resolve any possible conflicts.

 

  1. Employee stagnation. This was common a few years ago. Employees could spend 20 or 30 years in the same position. But now companies want to move forward and be at the cutting edge, so they must motivate their employees with possible promotions. Only in this way will they give 100% of their talent.
  2. Rotation. If a company's workforce changes a lot over a year, something is wrong. If your employees do not stay with you, something is wrong and must be resolved as soon as possible.
  3. Innovation. The lack of it is a sign that employees are unmotivated. Therefore they will not have the initiative or good ideas to improve the operation of the company. It may also be due to a problem with management that cannot understand market demand and the importance of applying technological advances.
  4. Always on. This is a problem that is occurring now and increasingly often. Being connected 24 hours a day is not healthy. Not for the employee, not for the middle management, not for the managers. Setting fixed hours, setting weekly targets, and meeting them by increasing productivity without increasing the time needed is the key to improvement in this respect.
  5. Competition. Be aware of market movements. Observe new trends and the entry of new competitors. You cannot forget these two factors, and you must implement new techniques and technology always to be ahead of the competition and lead the market.
  6. Revenue. This is the symptom that everybody notices. When a company's income starts to drop, something is not working well. Increased costs or decreased sales can cause it. If this happens, you must act quickly and solve the problem before you have to close down.
  7. Inventory. If you see that the product's stock or the raw material is accumulating on your warehouse's shelves, something serious is happening, and sales have indeed fallen. The best thing you can do is talk to your customers to determine why you are in this situation. That way, you can correct the mistakes.

 

The 4Ps of marketing in the relaunch of your SME

 

A good business plan cannot be without a marketing strategy since communication with potential customers is essential. You must establish the means and critical points to develop so that your advertising and messages impact your target. This has a lot to do with the 4Ps of marketing that we explain below.

Product

 

The product is the service or good that the company offers. Strategies can be created around this, and some examples are

 

  • Talking about new features
  • Adding value to the product with unique attributes
  • Expand or launch a new line
  • Create a new brand. This can be done without taking the existing brand or work off the market; both can coexist
  • Include new services

 

Price

 

The price is defined as the money value assigned to the product when launched on the market. These are some of the strategies that can be created around price.

 

  • Introducing a new product into the market with a low price
  • Launching a product with a high price
  • Reducing the cost of products
  • Lowering costs more than the competition
  • Promotions
  • Coupons or discount vouchers
  • Gifts with the purchase of a branded product
  • Special prices

 

Placement or distribution

 

Distribution is where the product will be sold. This choice must be made exhaustively to place your goods close to your target. The strategies around this P of marketing are:

 

  • Selling products in online shops
  • Place your merchandise in every shop you can imagine
  • Choose only suitable sales points for your product
  • Choose a single point of sale, very exclusive to sell your service
  • Intermediaries to place the product in their shops of confidence
  • Establish alliances with other businesses to sell your products simultaneously, in packs
  • Mark correctly how to get to your establishment and have a map of the location always visible on the web

 

Promotion

 

With the promotion, you manage to make yourself known, make yourself visible to your potential customers, and persuade and induce them to buy the product. The following strategies can be applied in the case of promotion.

 

  • Advertise in newspapers, magazines, on the Internet or public transport in your city
  • Please send emails to your potential customers to let them know about you and to those who are already customers to offer them promotions or to improve the product
  • Fairs, participate in fairs to see what the competition is doing and present yourself to your target
  • If your company distributes food items, create tasting booths
  • Create synergies with another company, so that your products complement each other
  • Label company vehicles with contact information
  • Raffles and contests to attract more customers and build customer loyalty
  • Guerrilla Marketing, surprise your target audience with fun street actions

 

The business plan is a document that encompasses many issues, many points, and concrete strategies for the company to meet the objectives set. As we mentioned at the beginning of the article, one must be reworked every year, and it is best to deal with experts in the field.

 

In this way, all the points and aspects necessary for your company to take off and become the market leader will be included, always being present as an alternative when your consumers need your products or services.

 

 

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Katie Mitchell

Writer

Katie Mitchell

I'm professionally involved in writing business plans and articles on the Internet.