Building your small business into a viable competitor in the marketplace takes skill and dedication. Having a plan for growth--a business plan--will help you focus your efforts. But remember that a business plan is not a stagnant thing. As your business grows and the world around your business changes, you should modify your business plan. Here are some basic steps for doing that:
- Redefine your business and its ultimate objectives in light of the current business climate. Have significant changes taken place in your industry or in the economy since you first wrote the plan (inflation, recession, changing interest rates)? If so, that could be a signal that reevaluation and redefinition is needed.
- Communicate your goals to key employees and advisors such as your banker or accountant whose help you need to realize your objectives. Use their feedback to update or change parts of your business plan.
- Formulate the most likely picture of your company's future using the available data (financial records, newspapers, magazines, government reports, surveys, your own observations and those of your colleagues). This is your business forecast. One likely outcome of this process is that you'll identify trends that may affect demand for your product or service or point to product improvements or even new areas of business. Incorporate these anticipated changes into your business plan.
- Assess your resources for achieving these newly defined objectives. Take stock of your assets -- those that show up on a balance sheet and those that don't.
- Do you have the money, inventory and equipment required to achieve your objectives?
- Do you have the technical knowledge, staff and commitment to execute those objectives?
- If not, will you be able to obtain the needed resources?
- Set intermediate goals and a schedule for accomplishing objectives. Outlining a chain of events will help you measure your progress toward your goal.
By taking the time to define your objectives and mapping out a strategy for achieving them, you will be in a better position to take advantage of opportunities as they arise. Also, rather than being forced to react to change, you will be better prepared to anticipate change and respond in the best manner.
Sales and Marketing
Making potential customers aware of your product or service and giving them easy access to it are key to your success. To ensure that your small business is fully realizing its sales potential and not missing out on a good opportunity, look both to the past and the future. Looking to the past helps you determine your business strengths and weaknesses. Looking to the future lets you anticipate changes in customer demand on which you can capitalize.
One of the greatest needs of small business owners today is for accurate information on which to base marketing decisions. Answers to these types of questions can help you profit from new business opportunities:
- Who are your customers?
- Where are they?
- Why do they buy?
- What do they buy?
- Is the demand for your product rising or falling?
- Who is your competition?
- What effect does the economy have on your business?
- What new customers and markets can you reach?
What small business owners often fail to realize is that most of the needed information is already in their possession or can be readily obtained. Business records, salespeople, customers, suppliers, trade associations, government and the media can provide mountains of important information.
Business Records. In addition to monitoring your business's income statement and balance sheet, check on sales receipts and expenses by product line. This not only permits you to determine your sales level, but also lets you look for trends. Do some products move quickly, others not at all? Are certain colors or styles more in demand than they were last year? Are selling costs for a particular item rising faster than the profits it generates? Use this information to project sales, plan inventory and estimate profits.
Salespeople. Along with your sales records, your salespeople are excellent sources of marketing information. They probably have more direct contact with customers on a regular basis than anyone else in your company. From their vantage point, salespeople identify customer needs and see emerging trends in the business.
Customers. In addition to your customers' buying patterns, you want to know how satisfied they are with your product and also determine their future needs. Past behavior is not necessarily the surest way to predict future behavior. Asking customers what you want to know through surveys or questionnaires is one way to gather information.
Suppliers. Don't hesitate to talk to your suppliers about market changes or developments. A good supplier often will do more than just fill your orders on time. Suppliers should keep an eye on their industry so they can help business owners make smart purchasing decisions.
Trade Associations. Becoming involved with a trade association can give you access to marketing information in a variety of areas related to your business. Trade associations often provide forecasts of demand levels and industry trends. They also may do cost studies and related research that can help you assess your place in the market. Participating in these groups is an excellent way to meet people in your industry, potential customers and other business contacts.
Government. Many government agencies can supply you with market research data at the federal, state and local levels for little or no cost. The Department of Commerce, Federal Trade Commission, Internal Revenue Service (IRS) and Small Business Administration (SBA) are just a few of the government agencies that track business information you can request. These agencies produce reports on all aspects of the economy, including population statistics, sales trends, building activity, etc.
The Media. Keeping up with today's world helps you spot the trends of tomorrow. Unfortunately, successful small business owners often become so involved in their day-to-day operations that they block out the outside world. Don't let that happen to you. Stay current with the issues of the day. You may find information to help you resolve a current problem or point your business in a new direction.
