Business planning is an important piece of advice that we could give any business, old or new. Even the most efficiently run business should periodically review performance, and how to best move forward into the future. The big mistake that many fall victims to is treating the business plan as an annual review. We should be continually making short-term plans, as well as looking to the horizon to plan for the longer-term.
Assess Current & Historic Performance
The first thing to consider is where the business is now and how it got there? If we are in a good place, with a healthy bank balance, full customer list, and an excellent reputation, great. But we still should assess how we got there to repeat the positive behaviors and eliminate any negatives to further increase profitability. If performance is poor then this process becomes even more important. How long have we been underperforming, and how much of an immediate risk does this pose?
Look at Potential Immediate Changes
As we just mentioned, sometimes swift action is required in business. Technically speaking reacting is not planning. It is more immediate, but we must identify when this is necessary and do it properly. Maybe there has been a change in the industry, this last year, we have seen a global pandemic, so many of us have direct and recent experience in this area. In the normal scheme of things, we may have a problem with our card payment processing service. We would want to look at alternative payment schemes quickly in this scenario. You could easily set up a PayPal account, although the fees are high for a casual account. Another option would be to accept alternative currencies, such as Bitcoin.
Medium Term Identify New Products & Services
Once we get beyond dealing with any immediate issues, we can start looking at real business planning. Medium-term planning involves 1-3 years. We need to identify new opportunities and discard ones that are not working. We spoke previously of accepting Bitcoin as a short-term measure. What if we considered it as a more permanent option for our customers alongside traditional payment methods? We may need to provide customers a bit of info, such as where can I buy Bitcoin with PayPal. Look at where most of our income is coming from, and more importantly, which areas are profitable, and which are not.
Long-Term Structural Changes
The last thing we need to be aware of is how we structure our business for the long-term. Long-term planning encompasses the 5-10 year period. If we lease premises, a typical lease lasts about this term. We need to know where we are with our business. Are we thinking of retirement any time soon? Or perhaps a new challenge? Ensure you know where you want to end up and routinely check progress to identify how well we are following this plan.
This article has been contributed on behalf of Paxful. However, the information provided herein is not and is not intended to be, investment, financial, or other advice.