This section of the book assumes that the business plan you have prepared has now successfully achieved the purpose for which it was designed. This could have been to raise additional finance, attract an investor, or simply organise your ideas to see if your venture is a viable proposition. Whatever your reasons for preparing a business plan, this chapter is intended to help you ensure your business remains both profitable and successful.
Monitoring Your Business
Following the launch of your new venture you will risk being so preoccupied with the day to day running of your business that you may easily overlook the fundamentals which will make your business successful. It is important periodically to take time out to monitor how well your business is performing. Any potential problems can then be identified early on and preventive action taken to rectify matters. The penalties for failing to do this can be severe.
A small gradual loss of business may not be noticeable on a day to day basis but when you start comparing weekly and monthly figures then tailing off can be clearly seen. Any loss must be quickly identified and tackled to stop it increasing further. If clients are no longer buying your products or using your service, then find out why.
A busy business person will probably be so engrossed in their own work that they may not even have noticed the arrival of a new competitor or a fall in the standard of their work. If you are a sole trader then you will probably be constantly fighting against the clock to get your work done and your money in the bank, but time spent monitoring your progress is invaluable. A partnership or limited company will be better able to assess its situation as many jobs can be delegated giving you time to concentrate on your progress.
Who To Talk To
Your accountant or bank manager are examples of people to discuss your business with. They tend to have impartial views and a wealth of experience behind them. A problem you are facing today could be resolved after speaking with them tomorrow. In addition, your local Enterprise Agency or Business Link have trained personnel to help you with any problems as they arise. If they are not able to assist you directly, they will be able to recommend sources of further help. However, sometimes just talking through a problem is often enough to help you see the solution for yourself.
Using Your Business Plan
Try not to fall into the same trap as many other businesses by disregarding your business plan as soon as you are up and running. One of the most important, yet frequently overlooked reasons why you compiled a business plan in the first place was to use it to continually monitor how your business is performing. Many businesses feel that the plan has served its purpose as soon as the loan has been approved or the doors to the office are open. On the contrary, it merely marks the beginning.
Your First Two Years
For at least the first two years it is a good idea to sit down at least once a month either on your own, with your bank manager or accountant and use your business plan to analyse how well your business is doing. This will help you spot any problems long before they arise and take the necessary actions to stop them developing any further. For example, a steady decline in profits or cashflow will not always be apparent during the early stages of your venture whilst you are concentrating on the day to day running of your business but your sales revenue and cashflow forecasts will soon highlight any shortfalls.
How Well Is Your Business Performing?
Use your business plan to monitor your progress; don’t hide behind your business trying to convince everyone, including yourself, that everything is just fine. This will help you to face up to any problems you may be experiencing. It is far better to address any problems at an early stage and work towards solving them, rather than trying to cover them up; the latter will only lead to ever increasing debt and even bankruptcy.
Obviously you want your business venture to succeed because you have invested so much time, energy and capital getting it from the drawing board and into reality. However, there may come a time when you will have to face up to the fact that your new business venture is not working. Using your business plan to continually analyse your position will enable you to try something else before you lose too much.
On a more positive note, using your business plan to assess your current position will soon show if you are doing better than you expected. If this is the case you will be able to budget for further growth. Success leads to more success.