Do you plan to fail? My guess is no. That is what we do when we fail to plan. Small businesses fail for many reasons, but most often it’s because they didn’t plan. With the new year upon us, many of us are writing New Years’ Resolutions, but if you have a small company I would urge you to go beyond a simple resolution!
If you don’t know where you are going, any road will take you there. Unfortunately, you may not like the destination. How do you avoid this? Have a plan! There are many books on writing a business plan, but here are a few starting points:
Have a vision. Most of you probably have a vision, which was why you started the company in the first place; it’s time to put it down on paper. Why does your company exist? What problem are you trying to solve by your existence? It’s where you want your company to go. For instance, “To become the number one quick-service restaurant in America.”
Have a mission. Your mission statement tells the world what you are out to do and how you are going to do it. Dave Ramsey’s mission statement is
The Lampo Group, Inc. is providing biblically based, common-sense education and empowerment which gives HOPE to everyone from the financially secure to the financially distressed.
Know your market. It’s important to understand your customer. Why do they buy your product? Why are they going to keep buying your product? How is your market segmented? It’s important to look at gender, age, economic status, education and other demographics in order to position your company to stay competitive. If you don’t understand your customer you won’t know why they like you and why they would want to continue buying from you.
Have a marketing plan. Another piece to understand is how you are going to get your product out to the world. Not thinking about your marketing plan is a mistake. While you may have business coming in now, there is no guarantee this will continue. Make a name for your company! When you market though, make sure you are giving people information relevant to them. It doesn’t have to be just about your company. If you blog, create YouTube videos, post articles on social media sites, etc., provide your potential customers with, not only content about your company, but about other things that relate their interests.
Understand your financials. I’m not asking you to be a CPA or a financial guru, but learn some basic finance so you understand how your company is doing. What’s the difference between gross and net profit? How much profit margin are you making per product? What’s the difference between variable and fixed costs? Be familiar with the terminology and make sure you are reviewing your financials monthly.
Create metrics. Develop what metrics to use to determine if you are successful and then measure against those. You can use industry metrics, as well as create metrics that are relevant to you. Make sure these metrics really tie back to how successful your company is. How many blog hits you get a month may not relate back to your success unless you can directly tie it to sales, advertising, etc.
Start out the next year with a plan! Don’t let your company become the next statistic. Understand where your company is headed and how you are going to get it there.
Jana Axline is president and leadership coach at Axline Solutions. Through her leadership musings she hopes to inspire audiences to grow as leaders and ultimately achieve who they were created to be. For more information visit Axline Solutions.
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