So what is the secret to running a successful business? According to the talent management company Ochre House, it’s PLANNING.
No business owner has achieved success by accident. Instead they have had clear goals, and plans in place that ensured they would achieve those goals.
It may be a time consuming process, time you would rather spend in going out to secure new business or to design new products and services, but without a comprehensive plan in place your business is likely to fail.
Not only does a plan help to keep your business on track, estimate the turnover you should be achieving and the speed at which you want to grow, but having a good business plan is vital if you need to secure a loan from your bank or if you are looking to attract investors.
No matter how many years you have been running your business, you will always need a good plan in place. Below are some suggestions to help you plan different stages of your business.
Year 1
In your first year of trading your main priority will be to get your business up and running. Financially, you will aim to breakeven, or perhaps even make a (small) profit.
At this time you will also be concentrating on promoting your business, so that potential customers know you exist and what you can offer. You should start establishing a customer base as well, building business relationships that will hopefully last for years to come.
For most new business owners their first year involves a lot of hard work. You are laying the foundations of your business so you will need to put in long hours, sometimes working seven days a week, to ensure your business is strong enough to last.
Year 2
This is the year you should be aiming to make a profit.
During your first year of trading you should have started to establish a customer base, now is the time to consolidate this. Strengthen your relationship with existing customers, while at the same time network for new ones.
Year 1 would have involved a lot of trial and error, but now most your systems and services should be running smoothly, however expect a few more problems and mistakes to happen at this time.
Once you have an idea of the size of profit you will make, plan to invest some of the money back into the business to help with future growth.
Think of Year 2 as a time to consolidate your business, make a profit and look to the future.
Year 5
By now your business should be established within your marketplace. You should have a number of regular customers, so you will be able to forecast potential earnings.
Many within your industry will be aware of your company now and you will have probably needed to recruit a number of talented employees to grow your business.
Financially you should be making a good annual profit, which ideally will have grown year-on-year. You will have likely needed to invest some of this profit back into your business to support its growth.
With all this success behind you, look at Year 5 as a review year.
This is a time to look back and assess what mistakes have been made, what has been learn’t and how you can use this to continue the success of your business.
Now is the time to decide how you want to grow (remembering that for most successful growth is steady and manageable), what you want to achieve and in which direction you want to take your company.
Year 10
Congratulations – running a business for ten years is no easy feat.
Now is a time of celebration. You have proven that your business is here for the long-run and has not ended up in the graveyard of failed start-ups.
This is also a time for future plans. If your business is going to continue to succeed it needs to keep up with industry changes, new technology, and new competitors.
After ten years in business you will now have a clear idea of what works and what doesn’t, as well as what your customers want from your services and products.
Use all the knowledge and experience you have gained over the last ten years to plan the next ten years of your business’ success.