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In the year, your business will either gain market share or lose it, and the odds overwhelmingly favour the business owners who plan for the year, says Veroshen Naidoo, regional investment manager at Business Partners Limited. If you don’t plan you will almost certainly lose market share to businesses that do plan. The first three months is an ideal time for many business owners to compile a formal plan for the year, says Veroshen. The following principles of business planning hold for any business at any time of the year:


  1. Make it formal


A year plan for your business is not a light day-dreaming exercise. It should be a rigorous process in which you purposefully sit down with your staff and advisers to thrash out a detailed plan. The result is a full set of financial projections, a clearly formulated strategy, action plans for every section of your business, including sales, marketing, operations, IT and admin, and targets for your key personnel.


  • Do it yourself


Despite the widespread misconception, a business plan is not something that you get your accountant to compile when you want to raise finance. It is a continuous action plan devised by you, the main decision maker of the business. Even if you delegate the writing of the actual numbers and words to someone else, you must consider every line of the plan.


  • Pull in help if you need to


Sometimes you must spend a little money to make money. If you’ve never done an annual planning exercise for your business and you are unsure of how to proceed, it is advisable to enrol in a short business-planning course, hire a business adviser, or, if your accountant or auditor also consults, pay them to facilitate the process. There are many professionals out there who can help, given that they understand that you are hiring them not to write a business plan, but to help you compile your own business plan yourself. 


  • Start by looking back


Even though your business plan is a forward-looking process, you must base it on what has happened in the past to ensure that it remains realistic. Gather as much data about what has happened in the last twelve months in your business, including your financial statements, management accounts and operational reports. Take the time to look through them carefully for what worked and what went wrong.


  • Look far afield


Spend a little more time to look at the broadest picture possible, starting with global forces and macro-economic trends that could potentially impact your business. It will help you make informed decisions about important factors such as interest rates, inflation rates and fuel prices, the global trends in the demand for your goods and services, as well as new technology, new laws, and negative factors such as load shedding.  


  • Carefully look at your industry


Stay up to date with the important trends in your industry and evaluate how your competitors are reacting to them to win market share from them.


  • Review your suppliers


A good relationship with a supplier is not something that should be taken lightly, but neither is it cast in stone. Scan the market for alternatives, and if you decide to stick with the same suppliers, work up a plan on how to regularly strengthen the relationship.


  • Look inside your business


Do you have the resources available for the year ahead, including staff, equipment, and raw materials? How much do you have to budget to get them to the right level?


  • Consider IT


Information technology (IT) is still evolving fast and changing the world at a breakneck speed. So even if you might consider it as being part of the broader global trends or the general resources in your business, it would be beneficial to include in your year plan a specific strategy on how you plan to keep your business up to date with IT. 


  1. Cash flow is king


A proper plan will show you when you are at risk of running out of cash because of slow sales, slow payments, or fast growth, and whether you should start planning to raise funds.


  1. Review your plan monthly


A proper plan is one that is constantly updated with the latest figures and trends in and outside of your business. Set up the monthly reports from the different sections of your business – sales, marketing, operations, and admin – to address the budgets, targets and performance indicators as mapped out in your plan. If you do it this way, your next annual planning exercise becomes a breeze, and you will almost certainly keep on winning market share. 

KEYWORDS: Veroshen Naidoo, business plan, business planning course, business owners, market share,

About the Author: Veroshen Naidoo

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Veroshen Naidoo is the Regional Investment Manager in our East Coast region. Veroshen is our go-to-spokesperson for all things business finance, support and growth.