29.12.2022
ENTREPRENEURSHIP: MY BUSINESS PLAN - WHEN, HOW AND WHY TO UPDATE IT?
Every successful business needs a well thought out business plan. This year is almost over and it's time to quickly check if and what you can change to increase the efficiency of your business and end the year with a sense of satisfaction.
Fact: Businesses that build a business plan at the very start have a 7% higher chance of growth than those that do not rely on one. (Francis J. Greene & Hopp, 2017).
Why do I need to analyze my business plan?
The answer here is simple – because everything changes. You are a different person, your team has evolved, so has the business and industry you work in. These factors give rise to the danger that the goals set at the beginning of the year or when starting the business are no longer relevant.
Here are examples:
Maybe you started with a small online store and a basic service plan in order to validate your idea without risking a large amount. At that point, you've bet your store on low traffic expectations and ignored the need for more than 5 mailboxes because that was the capacity of your team.
Already in the first months, however, the idea proved to be successful, and the product was in demand. You increase your advertising efforts and drive more traffic to the site. Respectively, your team is growing and you need an additional number of professional emails. It's time to move on to the next level with more resources and options to meet your needs.
Similar is the situation where you start with a shared hosting plan, but as your business grows, you feel the need to have your own server space provided by the ManagedVPS service.
Or maybe you started ambitiously, presenting a rich portfolio of products, but sales never reached a level you were satisfied with. A few months in a row filled with financial worries and searching for alternative methods of promotion can be quite frustrating. Even if they make you ask yourself questions like whether you did the right thing at all, is your strategy reasonable, is your site good, etc.
Don't be afraid. By taking the time to rethink the direction of your business development, you can identify gaps at the right time and look for a reliable solution to increase your successes.
How often should I update my business plan?
Many experts say it's a good idea to rethink your business goals at least once a year. We share their opinion, but add that the frequency depends on several important factors:
Your progress so far. Think about how much of your previously set goals you were able to accomplish and over what period of time. When replanning, it is not right to force frequent changes just to note that they are there. Rather, they should be tailored to your gaps and progress to date.
Maybe you thought it would only take a month or two to promote your social media page, but half a year later you're still trying to build an engaged following. This should not discourage you. In the beginning, you hardly had a realistic estimate. Extend the deadline, but don't neglect these channels. Look for alternative quick methods of promotion while you improve yourself.
The development of the industry. Don't be like the fish condemned to not be able to ride a bike, but adapt to the pace of development of the sphere in which you are positioned. Among some businesses, no changes have been implemented in the last 50 years. In others like technology, innovations come daily.
Be flexible and adjust your goals relative to your competitors and customers as their needs change.
It's helpful to create a routine and set aside a few hours each month to read and watch different studies and best practices from businesses similar to yours. This will help you in making correct and timely decisions.
Imagine you are selling homemade honey. It is good to mix the sources of information. Subscribe to a blog, for example, to keep your site and advertising strategy always up to date. However, do not lag behind with the information on improving the technique of keeping the hives, extracting honey and storing it. Quickly apply what you've learned by adjusting your performance.
The new trends. As industries change, so do consumers, generations, laws. From time to time, look at the situation in scale. That way, you'll get out of the details you work with on a daily basis and open your eyes to the big picture. This approach is very useful in setting long-term goals and objectives.
How can I improve my goal setting?
So far we've left quite a bit of food for thought on the plate of your mind, haven't we? Let's get down to practice. Whether you're happy or unhappy with what you've accomplished this year, here's a strategy to help you do even better with goal setting for the next year.
The strategy in English is called SMART and is an abbreviation of the first letters of its main ingredients. Let's see the ingredients of this proven recipe that will help you mix up the most delicious cocktail with goals.
Specific. The more specific and clear your goals are, the easier it will be to achieve them. A subjective and vaguely formulated goal like "I want my business to be the best in the world" sounds enticing, but it doesn't work. Instead, write down the steps you need to take to make your business the best it can be.
Measurable. How will you know you've achieved your goal if you haven't established clear metrics? Let's say you want to increase visits to your online store by the end of the year. This is a clear goal, but to make it measurable, add a number or percentage increase.
"I want to increase visitors to my online store by 20%" is a specific and measurable goal. You can find out how successful it is in just a few clicks using Google Analytics, for example, by tracking the number of visitors over the past 6 months and using that as a starting point.
Achievable. Find out if the goal of increasing visitors to your online store by 20% is achievable by analyzing the market and competitors and by listing the tactics you will implement. What advertising channels will you use? Can you increase your budget to find new people? Can you offer a new feature/addition/benefit to your products or services to attract new users?
If the answers are rather negative, then consider lowering the target or other alternative methods. Strive for a balance between high motivation and challenges. An unattainable but too high target would disappoint you, just as one too easily attainable would make you unnecessarily conceited.
Relevant. And we mentioned above, don't be the fish who suffers because he can't ride a bike. Always match your goals to the situation you are in and your capacity. Ask yourself if with a 20% increase in site visitors, which would potentially lead to more orders, you will be able to serve them well. Better fewer but satisfied customers than very disappointed ones.
Time-bound. The deadline should not be seen as a limitation, on the contrary, it is your guide. Goals left without a deadline often fade over time, and it's far easier to make excuses for not accomplishing them.
Run your entire business plan through this kind of criteria filter to check your clock and validate that you're actually moving in the desired direction. If not, make the necessary changes and move forward boldly.
