Changing your business plan to respond to market demands can be time consuming and expensive. However, the proven of these changes is sometimes exactly what you need to give your small business an operational turnaround. These are three key indicators that it’s time to change your business plan.
Your startup is stagnant
Every entrepreneur wants the opportunity to grow. Startup growth provides resources for further expansion, beating the competition, improving quality, and increasing efficiency. Unfortunately, most small businesses can’t afford to invest additional resources in advertising. They might consider transferring employees to new positions, such as sales, customer service, etc. The results of transferring them to new positions could be extremely positive. Employees get the opportunity to learn new skills, showcase new talents, and learn about other areas of work.
Growth may also require the introduction of new products or services, especially if they complement existing offerings. This is a great way to re-engage both previous and new customers. So, if your growth has stalled, what you’re offering may no longer be enough. And if you’re not sure what to change, listen to your customer’s feedback. It will tell you.
Why is it important to have a business plan?
To shape the future
A business plan is not only needed to secure funds during the start-up phase, but it will help you run your business as efficiently as possible. By putting your thoughts down on paper, you can understand your business as best you can and see what actions need to be taken to improve your business. A business plan can be a detailed alternative scenario for the future and we can derive the goals we want to achieve and the resources we need to achieve them from the business plan.
Understanding your business and market a little better and planning how best to work in that environment will be vital to your long-term success.
Achieve growth and secure funding
Most businesses face investment decisions during the course of their operations. Often, capital expenditures cannot be funded from free cash flow, so the company must seek outside funding. But despite the fact that the funding market is very competitive, all potential lenders require a company’s financial statements with profit and loss statements along with a current business plan. Financial statements help investors understand the past, while a business plan helps them see what the company plans to do in the future.
If you are looking to invest in your business, it is important to clearly describe the opportunity because investors will want to know:
Why would it be better to invest in your business than to leave the money in a bank account or invest in another business?
If you are seeking funds from banks: why would banks lend you money to finance your business, your investments?
A well-written business plan can help you make these points to potential investors and give them confidence in yourself and the thoroughness with which you have presented the future development of your company and business. The most important part for them will be clear evidence of the company’s future ability to generate enough cash to cover debts, and the company’s ability to operate efficiently.
Develop communication and action in the company
A business plan helps companies assess future opportunities and commit to a specific course of action. By putting the business plan on paper, all other options are effectively marginalized and the company is directed to focus on the most important activities. A business plan can allocate specific business steps to specific people, making it easier to manage and monitor progress.
Cash flow management
Careful cash flow management is a basic requirement for all businesses. The reason is very simple. Many businesses fail not because they are unusable, but because they have ultimately become insolvent (i.e. unable to pay their debts as they fall due). Although the break-even point – where total revenues equal total costs – is very important for a start-up, it becomes less and less important once a business becomes profitable.
Cash flow management becomes essential as companies continue to invest where there are significant financial inflows. These opportunities need to be evaluated to avoid seasonal fluctuations in the business. It should be kept in mind that if you sell your product or service for cash, you will receive revenue immediately. However, if you sell on credit, you will only receive the money in the future, and therefore, you may have to pay some of your expenses before you receive this income. This will put additional strain on the solvency of the business. Therefore, a well-structured business plan will help you manage your pre-financing requirements.
If you have a business plan and you are stagnant then look at what circumstances have changed and simply adjust it. Update.
Customer needs have changed
Each business plan includes information about the target market: demographics, interests, needs. However, these interests, along with market needs, may change. If you are an IT company, it is almost certain that the development of technology will change the way customers communicate with your services. If you are in the hospitality industry, what is a hit on the scene today may be an outdated whim tomorrow.
Stay up to date with returns, customer calls and the like. This will best show you if there are changes in customer needs. Talk to your customers to make sure they really get what they want.
You don’t have full-time people
In the beginning, you may not need – or may not be able to afford – full-time employment to perform certain functions. Many in this situation turn to the so-called. freelancers. They are simply great for fulfilling certain tasks, especially if they require expertise or some specific knowledge.
But the problem with freelancers is that they can only perform those specific tasks. They cannot take on any other role. Because they are not part of your company, they cannot learn and develop with your company. At some point, therefore, you should hire someone for a permanent, full-time job. Although they may not initially possess all the necessary skills, with a little effort and time invested that will change. Especially if you hire a person eager to learn.
When you decide to implement these small changes in your business plan, you will create an outstanding foundation on which your company will be able to grow.
Times are constantly changing and so are the needs of your customer needs, InvoiceCrowd offers you a wide range of solutions to help you create the best business plan for you so you do not lose customers, time and money.