They say an idea is all you need to start a business, but to get it on the right track from the start and generate future profit and cash flows, you need sound business planning. This does not just apply to a business starting up. Business planning is critical for all businesses.
We wanted to share with you 6 major business planning mistakes that can be avoided.
1. Not having the right numbers
Not having the right numbers when it comes to the expected revenue and expenses for your business can mislead you in terms of what funding you may require to operate your business. It will also not provide insight into likely profit or loss and will not allow you to understand what your breakeven point is (just to name a few). None or inaccurate figures could lead to incorrect decisions being made which may lead to costly mistakes or worse, the need to cease the business.
Let us work with you to prepare accurate forecasting that looks to help you understand and analyse your business.
2. Attracting the wrong target audience
You also need to be very clear who your target audience is. Having this clarity will ensure that your marketing and advertising spend is directed to where you are most likely to get results.
You should consider what your online and digital media presence will be. How do you reach your target audience? What is your message? What is your call to action?
3. Not listening to your customer
What some business owners fail to understand is the importance of communication with their customers. They make the mistake of not understanding the needs and wants of their existing and potential customers.
To avoid this, you could conduct your own customer centric research and possibly look to use focus groups. Test your theories and be prepared to adapt and change as required.
4. Not conducting your industry research
Your own effort and research matters a whole lot! By understanding your industry and your potential competitors, you will be able to use this information in the development of your product or service and how it may be marketed to your target audience.
5. Being unrealistic
As a business owner, it is important to make fair and reasonable assessments of some of the components in your business plan. This could be your expected revenue, the current need/demand for your product or service, the cash flow the business will need, or the belief that business is easy.
Part of our role when working with clients is to ensure that reasonable assumptions are being applied when making decisions.
6. No execution plan
Believing that the preparation of a business plan is all that you need to do without understanding how to execute it can be an easy trap to fall into. In order to work and live into your business plan, you need a structured approach where it is broken down into realistic and achievable targets that you understand, can measure and that you know how to action. Having accountability around these is critical.
At enablebusiness we work with a number of clients annually on their business plans. Once they have been through a business planning process and have developed their plan, we guide them by breaking their business plan into achievable goals. We meet on a regular basis to discuss progress towards the goals set and of course we keep you accountable to what you said you were going to do.