Neglected Business Plan Tweaks
Experts recommend Business Plans be reviewed at least annually but in our current climate I recommend more regular reviews.
A staggering 4 out of 5 businesses do not have a plan and whilst some entrepreneurs deliberately choose not to eyeball the viability of their venture, I suggest that most businesses should. And what about scalability? Some business owners aren’t interested in it and perhaps for valid reasons e.g. they are not interested in market share growth or the resale of their business but I suggest it is better to have options in the future e.g. setting yourself up for a retirement with cashflow or a cash injection or having something to pass down to another generation.
Here are some tweaks to consider in your planning and scalability future.
1. Who is your Target Market?
This is the market you can be a hero to.
2. Is it a scalable market?
If your market is small or extremely limited scalability could be extremely difficult.
3. Are your products and services nice-to-haves or must-haves?
A must-haves provider will find scalability easier and it will take less investment. Can you identify the urgent must-have needs of your target market?
4. Is your service offering scalable?
If your business is largely dependent on your daily contribution and doesn’t have the resources to replace you when you are absent from it or it is time for you to step into a new role in the business scalability will be exceedingly difficult.
If your offering is customisation heavy it may be advantageous to look at adding commodity services and products to improve your scalability and if you can do this standardisation and systemisation are essential to developing a cookie cutter aspect to your business model.
Remember there is a scalability spectrum, highly scalable at one end and not scalable at the other and most of our businesses sit somewhere in the middle.
5. Have you done the math?
Depending on your definition of profitability the standard is somewhere between day 1 and year 3 of operation to reach ‘profitability’. Do the figures stack up in your business plan to achieve this and are they scalable i.e., your growth rate is greater than the increase in your fixed cost?
Lastly I offer a warning. Initial business growth and popularity are not necessarily indicators to scale up. Tread with caution and seek professional guidance before you take this next step. Let us know that if you would like us to help you.