When was the last time you checked performance against your business plan?
The business plan needs to be under continual review to make sure you are successfully implementing each planned stage. It won't be any use to you unless you use it.
By writing a business plan you've taken the time to plan in detail what your business goals and objectives are - it's a living, working document, not something to be filed away and then dusted off for review in a couple of years time.
This concentrated thinking, discussion and debate is the key to the formulation of a workable and achievable business plan. And as long as actual performance is monitored against it, the plan should significantly assist in the long-term survival of the business.
Ideally you should review performance on a regular monthly basis, or at the very least on a quarterly basis. Ask the fundamental questions:
- Where are we?
- Are we heading in the right direction?
- Will we achieve the goals and objectives of our business plan?
- Should we review pricing structures?
- What has been the effect of the consumer price index increase?
- What has been the effect of price rises in our particular business?
- Should we raise our prices?
- Should the gross profit percentage be higher?
- Have we got empathy with customers?
On an annual basis you need to compare actual financial performance to the budgets and cash flow forecast. Ask:
- How did we perform?
- What went wrong?
- Have we learnt from the mistakes?
- Did we exceed budget expectations anywhere? Why?
- Can we capitalise on these improvements?
A valuable assessment is to compare your business figures to industry statistics (please ask us if you need help obtaining this information).
You'll also want to know: What is the general business climate in your area? Is it conducive to your type of business? Should you be expanding, drawing back or diversifying? What is the status of your investment in stock?
Don't forget that the business review should also include an appraisal of what has been happening within your team. You need to look at:
- Training and development
- Employment agreements
- Wage/salary reviews.
Use your business plan as a day-by-day, week-by-week, month-by-month reference point to compare where your business is against what you planned it to be. If there are any deviations, immediately investigate them and try to take corrective action.
We can assist you to develop your business plan - check out our range of business consulting services and contact us today.