When a business is thriving – or struggling to cope with new threats such as coronavirus – it can leave little time for planning ahead. But spend all your time thinking about the short term and the future will catch you unawares.
If we are to believe Warren Buffett, the best time to be cautious is when everyone else is being greedy and the best time to be greedy is when others are being cautious. There is no better climate for fear than a global pandemic, so now is the perfect time to make a plan about where you want your business to be and how you are going to get it there.
Most business owners talk enthusiastically about their ideas, but have you written them down? Are your goals something concrete and easily understood by the people who work for you? Research shows that companies with a written business plan are more successful. People who write out a plan are more likely to stick to it and writing goals down forces you to think about them more carefully, which will help you avoid rash decisions.
A written plan does not mean inflexibility, however. For example, while there has been a lot of speculation as to how coronavirus will affect society and businesses there is still a lot of uncertainty and a strong business plan will allow for changes.
For instance, will there be greater demand amongst your customers to have goods delivered? Will your staff need to work remotely more often? Will all your suppliers survive or will you have to find new suppliers and develop new relationships?
It does not matter how long you have been in business – every enterprise from start-ups to long-established businesses needs a plan, especially if they have been struggling before lockdown. It is time to take a deep breath and look at what has been achieved, what changes you may need to make and prepare for them now.
While most people view a business plan as a path to profitability, it can also be about developing brands, accessing funding and nurturing growth. A plan will help you forecast cash flow and prepare for downturns as well as good times. Cash flow should be looked at weekly and any problems dealt with quickly if a business is to stay healthy.
Be realistic about how much growth will cost. It is easy enough to work out the cost of hiring more people or moving to a bigger space, but make sure to check that your suppliers can handle larger orders without increasing prices.
You need to consider yourself and your own ambitions as part of a business plan. If your business is to have the best chance of success, you need to figure out how you will achieve your personal goals and what you need to improve on to help the business thrive.
These are worrying times and sadly some businesses will not survive. But new ventures will find there is a lot of goodwill toward them in the market. Get your costs right, create a sensible business plan and you will be in a good position to capitalise on that goodwill.