Importance of mapping out future of your business
Business Buzz is a monthly column presented by the Bermuda Small Business Development Corporation. Every month, read about entrepreneurship, obtain business management tips, and find out what's going on in the small business sector. T
his is the final part of the three part article discussing managing your business in a slow economy. In the introduction to this series of articles, we identified that utilizing a strategic plan to help guide you through tough times is the best way to weather an economic storm. We call this strategic plan the “Blueprint”.
The three major components of your Blueprint include:
1. Cash Management Plan
2. Costs Reduction Plan
3. Future Plan
In part one of this series, we discussed the Cash Management Plan that allows you to look at cash flow projections, accounts receivables, inventory, accounts payable and bank financing. In part two we focused on the Cost Reduction Plan which involves your staff, discretionary and non-discretionary costs, and capital expenditures. In this article we will discuss the last component of the Blueprint, your Future Plan.
3. Future Plan: This plan allows you to focus on the future of your company by reworking your business plan, creating and identifying new opportunities, establishing strategic alliances and streamlining your operations.
Pull out your business plan, dust off any cobwebs and review it. Determine what has changed since you first wrote it. Look at your expectations and compare them against what you know to be factual. Amend the plan taking into consideration the factual information. Research new ideas that you think could potentially enhance the plan. You can enlist the assistance of local organisations like BSBDC to help you update your plan.
While reviewing your plan is the first step, you should also be seeking ways to create or pursue new opportunities. Make sure you are aware of any opportunities that may be available via radio, newspaper, TV or online. For example, if you are a retailer, you may consider purchasing supplies locally versus overseas. There may be opportunities for cross marketing services, for example, your children's store may be able to partner with a fun castle owner to provide his clients with discounts and vice versa. The key is to keep your ears and eyes open for opportunities so that you are in a position to take advantage of them.
A part of being open to ideas is establishing strategic alliances. Investorwords.com defines a strategic alliance as an agreement between two or more individuals or entities stating that the involved parties will act in a certain way in order to achieve a common goal. Strategic alliances usually make sense when the parties involved have complementary strengths (www.investorwords.com).
For example you may decide to partner with another retailer to save on shipping and duty when purchasing your goods. Another alliance would be bartering services. If you are an accountant, you may agree to prepare a retailer's financials in exchange for goods. Outsourcing jobs is another form of strategic alliance. It may be worth it for you to pay a specialist $75 an hour to complete your financials instead of you labouring through the process at $150 an hour in this instance we are talking about the relative value of your time.
Future planning is also about streamlining your operations. Identify your core business objectives and focus on them. By doing this you can eliminate duplication of efforts and capitalise on the parts of the business that are most profitable.
For example, in the instance of a landscaping business, if you determine that you make $200 a month cutting grass, but you could make $400 a month fertilising grass, then it would be more profitable for you to focus on selling your fertiliser. A simple analysis like this can help you save the necessary cash while managing in an economic downturn.
Developing your Blueprint using the plans discussed over these past three months can help you determine where to focus and guide you through the implementation process. Although it may be difficult, we encourage you to stay the course because to delay is to create more opportunities for your competitors.
So the question now is: When will you create your Blueprint?
Jamillah Lodge is a Business Development Officer for Bermuda Small Business Development Corporation. She specialises in providing aspiring and existing entrepreneurs with business development advice and loan guarantee assistance. In addition, she manages the marketing and communications plan for the Corporation and oversees the development of a mentorship and youth entrepreneurship programme. She has a degree in Business Administration with a concentration in Marketing. The opinions expressed in this article are those of the writer and should serve a general guide and should not be considered as replacement advice from a lawyer, accountant or other professional service provider. Readers should consult with the appropriate professionals as necessary.
If you have questions about starting a business in Bermuda or suggestions for articles, contact BSBDC: E-mail the BSBDC at info[AT]bsbdc.bm or call 292-5570.